C.C. Ahmedabad Vs Electro Polytex (CESTAT Ahmedabad)
CESTAT Ahmedabad held that despite of various opportunities as department failed to furnish basic documents like SCN and RUDs including relevant correspondence, the value declared by the imports/ respondents is upheld.
Facts- The present appeals by the Department have been filed against order of Commissioner (Appeals) relating to issue of valuation of goods. Notably, the value declared by the Respondents upheld and reversed the order of adjudicating authority through his order.
Conclusion- Held that the appeal has been filed by the department after review and authorization by Committee of Commissioners, but even the basic documents like SCN and RUDs including the relevant correspondence has not been put on record. In the absence of such documents having not been made available by the department despite opportunities given, we are constrained to agree with the findings of Learned Commissioner (Appeals) and hold the same as correct based upon evidence on record.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals by the Department have been filed against order of Commissioner (Appeals) relating to issue of valuation of goods. He upheld the value declared by the three Respondents and reversed the order of adjudicating authority through his order. The relevant portion of findings of the Commissioner (Appeals) are as follows:
“6.7 As per the said rule 9, under residual method, the value is required to be determined using reasonable means consistent with the principles and general provisions of these rules and on the basis of data available in India. The adjudicating authority has not put on record where any such data for the contemporaneous import goods was available on otherwise to determine the value of the impugned goods in such circumstances. This aspect has been observed earlier in this order. It is evident that the said residual method further provides that the value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade, when the seller or buyer has no interest in the business of other and price is the sole consideration for the sale or offer for sale. There has not been any attempt to look at any contemporaneous import as per record placed before me. I have also examined sub-rule [2], which provides for certain basis which are not to be applied under the provisions of rule 9 for determination of value. Having specific analysis of clauses (el) and (v) of sub-rule 2 of Rule 9. I find that though there is no specific exclusion for price of goods for export to India’, the settled legal position, as discussed, supra, is unambiguous to hold that export value of another country cannot be adopted as direct basis for determination of value under residual method. I find from the records that the adjudicating authority has directly and hastily relied on the quotations as found from the personal computer or laptop to determine the value of the impugned goods and thus rejected the declared value and re-determined the value on the basis of the same evidences which cannot be countenanced. Ideally, he should have inquired into contemporaneous import of identical or similar goods, which. I find, has not been attempted, In light of the discussions hereinabove. I hold that determination of valuation on basis of the type of evidences placed on record cannot be sustained and therefore the quoted value as well as value declared to Hong Kong Customs by the supplier cannot be used to reject and redetermine value under CVR, 1988 as well as CVR 2007 in the circumstances any evidence of flow back of the transactions, could have fortified case of respondent, but the same is not available. Hence the declared value cannot be rejected and thus the same will have to be accepted. In view of the discussions made, supra. Hold that the adjudicating authority has erred in rejecting and then enhancing the transaction value on the basis of Caveat Free documents and copy of offer letter / proforma invoice extracted from the laptop/personal computer of the appellants.
7. Having held that the declared values in respective assessment are required to be accepted. I hold that the allegation and decision regarding undervaluation hos crumbled and so has, as an obvious corollary, the decisions adjudging actions under section 11 of the Customs Act 1962. Further consequence that follows a that since there is no case for misdeclaration and confiscation: no penalty is imposable under section 112 and section 114A of the Act on appellant No. 1. From the above, it further follows that the penalties imposed on the appellant No. 2 and 3 are also not sustainable and are liable to be set aside. I am not delving into the other arguments of the appellants on the question of penalty.
8. I set aside the impugned orders and allow the three appeals, with consequential relief, if any.”
(Emphasis supplied)
1.1. These appeals were taken up for hearing and it was found that the relevant SCN along with relied upon documents including correspondence with Hong Kong- Customs, on the basis of the department’s case have not been placed on record. Accordingly, vide order sheet dated 29.05.2023 as well as order sheet dated 04.07.2023, following orders were passed:
