Customs, Excise and Gold Tribunal - Delhi
Mohan Sales (India) vs Commissioner Of Customs, Icd on 1 September, 2003
Equivalent citations: 2004(91)ECC682, 2004(163)ELT330(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. These appeals challenge assessment of imported goods to Customs duty after enhancing their declared value. The factual particulars of declared value, enhanced assessable value etc. are available in the table reproduced below :
"SI. No. Appeal No. & Date Bill of Entry No. & Date Description of imported Goods Declared Value Unit per piece Assessed Value Unit per piece Assessed Value of Goods (Rs.)
1. ICD/26/02 13-5-02 336856 18-3-02 Blank Video Tapes US$0.78 (MRP Rs.75/-) US$1.00 (MRP Rs. 100/-) 23,92,917/-
2. ICD/40/02 9-7-02 338790 10-5-02 Blank Video Tapes US$0.78 (MRP Rs. 75/-, 0.60 (MRP Rs. 65/-, 0.85 (MRP Rs. 85/-) US $ 1.00 (MRP Rs. 100/- 1.00 (MRP Rs. 100/- 1.40 (MRP Rs. 140/-) 23,01,022/-
3. ICD/51/02 9-8-2002 154903 20-6-02 Blank Video Tapes US $ 0.78 (MRP Rs. 75/-) 0.85 (MRP Rs. 85/-) 1.50 (MRP Rs. 150/-) 0.78 (MRP Rs. 75/-) US $ 0.95 (MRP Rs. 100/-) 1.10 (MRP Rs. 110/-) 1.50 (MRP Rs. 175/-) 1.00 (MRP Rs. 100/-) 22,94,927/-
4. ICD/56/01 5-7-01 2240235 17-4-01 Blank Video Tapes US $ 0.75 (MRP Rs. 75/-) US $ 1.29 (MRP Rs. 110/-) 25,24,442/-
5. ICD/72/02 9-12-02 155782 18-9-02 Blank Video Tapes US $ 0.78 (MRP Rs. 75/- 0.78 (MRP Rs. 75/-) US $ 0.80 (MRP Rs. 80/-) 0.80 (MRP Rs. 80/-) 18,54,350/-
6. 1CD/89/01 4-12-01 331386 12-10-01 Blank Audio Tape SG $ 0.20 (MRP Rs. 15/-) SG S 0.365 (MRP Rs. 26/-) 3.13,603/-
7. 1CD/61 /02 16-9-02 001285 5-8-02 Toys & Binoculars 21 varieties Loadedby 50% 3,96,053/-
8. ICD/40A/01 00369 9-4-01 Toys & Binoculars Assorted varieties Loaded by 20% 4,86,764/-
9. 1CD/74/01 30-8-01 00904 20-7-01 Toys & Binoculars Assorted varieties Loaded by 20% 6.40.834/-
10. ICD/90/01 4-12-02 1376 10-10-01 Toys & Binoculars Assorted varieties Loaded by 20% 5,91,288/-
11. ICD/07/02 25-2-02 00008 1-1-02 Toys HKS3.25 Loaded by 26% 2,87,984/-
12. ICD/08/02 25-2-02 333524 11-12-01 Maxell AAA Size Dry SG $ 0.07 (MRP Rs. 5/-) SG $ 0.10 (MRP Rs. 7/-) 2,67,246/-
Battery
13. ICD/88/01 4-12-01 331955 Maxell AAA Size Dry Battery SG $ 0.07 (MRP Rs. 5/-
SG $ 0.10 (MRP Rs.7/-
2,79,972/-
ICD/180/01 20-10-01 328783 20-7-01 Maxell AAA Size Dry Battery SG $ 0.07 (MRP Rs. 5/-
Loaded by 10% (MRP Rs. 7/-
1,61,451/-
15. ICD/71/02 9-12-02 2067 18-11-02 Tweeter/ Speaker Loaded by 20% 5,50,4 14/-
16. ICD/103/02 14-3-02 335152 24-1-02 Compo-nents for VCD Players Un-branded Mechanism Un-branded PCB I IK $35.10 HK $ 44.79 9.77.380/-"
UK $51. 00 HK $ 60.11
2. The imported goods in question are mostly consumer goods like blank video tapes, dry battery. Most of these imported goods were required to be marked with Maximum Retail Price (MRP) in terms of Notification No. 44 (R-2000) dated 24-11-2000 of the Director General of Foreign Trade. Therefore, those pieces had been affixed with stickers showing their MRP. While increasing the declared value for the purpose of assessing the goods to duty on ad valorem basis, the Customs Assessing Authority also enhanced (sympathetically) the declared MRP.
3. The appellants have challenged the orders of the assessing authority on the ground that valuation and assessment undertaken are entirely contrary to the legal provisions relating to valuation of imported goods and the decision of the Apex Court. It is their contention that the values declared by them were the transaction values at which the goods had been purchased from abroad and in terms of Rule 4 of Customs Valuation Rules, the transaction values are required to be accepted for the purpose of assessment of goods to duty. The appellants have also the grievance that rejection of transaction value has been done without indication of the reason for it and enhancement of assessable value has been done without indicating what is the basis. Further, the normal procedure of issuing Show-Cause Notice, disclosing the basis for the enhanced value to the importer etc. have also not been followed. They have also submitted that the Commissioner (Appeals) was entirely in error in holding that the appellants had agreed to the enhanced valuation and to that extent the order was a consent order or that the importer had voluntarily accepted the correctness of the loaded value.
4. We have perused the records and have heard the learned D.R. A perusal of the records of the case makes it clear that transaction values have been rejected and the goods assessed at enhanced value. No reason for the rejection of the transaction value or enhancement of value has been indicated by the assessing authority. It is well settled that transaction values constitute assessable value under the Customs Act. If the goods have to be assessed at a different value, the transaction value has to be rejected first based on the legally permissible grounds as indicated in the Valuation Rules. The assessee should also be put on notice that their transaction value is being rejected for the stated reasons and goods are proposed to be assessed at a higher value. The circumstances that permitted such rejection and the alternative basis for fixing assessable value are specified in the Valuation Rules themselves. No such legally permissible steps are found to be taken in the present case. The assessing authority has not passed any order indicating the reason for rejecting the transaction value or fixing the value at higher level. The Commissioner (Appeals) also has not indicated any reason warranting assessment at higher value except to state that "Since the value of the goods declared by the appellant appeared to be on lower side, these Bills of Entry were assessed finally after loading the value as per the prevalent international market price, market enquiry etc." The order does not at all indicate the particulars of any market enquiry or any transaction at the enhanced price in "international market place". No care has been taken to ascertain the relevant particulars and to incorporate them in the order. The orders are clearly unsustainable since they lack any basis. The impugned orders are, therefore, set aside and the appeals are allowed.