Rejection Of Value Declared On Bill Of Entry Is A Serious Act, Should Be Supported By Evidence: CESTAT

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that rejection of value declared on a bill of entry is a serious action that should be supported by compelling provision, evidence, and justifiable reasons.

The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the transaction value of the appellant has been rejected merely on the ground that similar goods have been imported at higher value at various other custom stations without providing any evidence in support of their claim and failing to examine the applicability of Rule 12 of the Customs Valuation Rules.

The appellant/assessee is in the trading of electronic goods, including branded and non-bbranded flash memory cards, which were imported during 2008–09 and 2009–10 at Air Cargo, Ahmedabad, and after being duly examined by the proper officer for their description and assessment, were allowed to be cleared upon payment of duty assessed. The consignment was imported by M/s. KJ Imports and Exports of Ahmedabad from Hong Kong via Mumbai, and the goods were seized in Mumbai, alleging undervaluation. Based on this seizure in Mumbai, an investigation was undertaken in Ahmedabad for past imports undertaken by the said importer. Based on a comparison of the value of imported Flash memory cards at various other customs stations, it was alleged that the value declared by the appellant was grossly undervalued.

The original adjudicating authority rejected the value declared by the appellant and re-determined the value of goods as per NIDB data under the Rules of Customs Valuation Rules, 2007 and assessed bills of entry.

The assessee challenged the assessment before the Commissioner (Appeals). However, the Commissioner (Appeals) upheld the order of the original adjudicating authority.

The assessee contended that both lower authorities have upheld re-determination of the value of goods merely based on comparison of data for imported goods at other ports as per Rule 5. For the valuation of goods as contemporaneous imports, the authorities have considered the bill of entry accruing to March, May, and June 2009 with the country of origin as Taiwan and China. The bill of entry filed by the assessee was in July 2009, and subsequently no country of origin was shown for the assessee.

The tribunal noted that to re-assess value under Rule 5, it is important to establish that the goods were similar. The appellants have disputed that though the contemporaneous import goods were relied upon, both the adjudicating authorities failed to establish that the goods of contemporaneous imports are similar to the goods of the assessee.

The CESTAT observed that no effort was made by the adjudicating authority to ascertain the quality, quantity, and characteristics of the goods of contemporaneous import; the authorities have failed to carry out any tests to ascertain whether the goods of contemporaneous import are similar under what circumstances. Only reports from NIDB have been relied upon. No assessment with regards to comparable quantity and quality of the goods has been established by the department when re-assessing the value of the said goods. The data relied upon by the department does not wholly correspond to the time at which the investigation was conducted, and different parameters ought to have been considered while adjudicating serious allegations.

Counsel For Appellant: Vikash Mehat

Counsel For Respondent: Prashant Tripathi

Case Title: Deeplalit Enterprise P. Ltd. Versus C.C.-Ahmedabad

Case No.: CUSTOMS Appeal No. 11063 of 2016- DB

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