CESTAT Delhi quashes demand as Revenue fails to prove undervaluation of goods to reject invoice transaction value

Commissioner Vs V. K. Metcast Pvt. Ltd. (CESTAT Delhi)

FACTS – The respondent/importer had filed three bills of entry dated 27.01.2021 for clearance of imported goods ‘Zinc Scrap, Saves/Scope’ which were imported from M/s Olympic Metal, Miami, USA. As the Department noticed that the declared value of the goods was lower than the contemporaneous import of similar goods and that the sale involved an abnormal discount and abnormal rejection from ordinary competitive prices, a query was raised from the importer to provide material/evidence to justify the declared value in terms of Section 17(3) of the Customs Act, 1962.

The assessing officer vide rejected the declared value under Rule 12(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred as CVR, 2007) on the ground that the declared value of impugned goods was lower than the value of similar goods being cleared as per the details of bills of entry given. Being aggrieved, by the said order, the importer filed appeal.

CONCLUSION- The case of Mirah Exports (P) Ltd. v. C.C., 1998 (98) E.L.T. 3 (S.C.) was referred which says that the burden of proving a charge of undervaluation lies upon the Revenue and Revenue has to produce the necessary evidence to prove the said charge. Ordinarily the Court should proceed on the basis of the apparent tenor of the agreement reflects the real state of affairs and what is to be examined is whether the Revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price.

The opportunities were given to the Revenue to adduce the evidence to prove that the invoice price was not the correct sale price. Further, there is no indication as to when the contract for those imports was entered into. Therefore, it was held that Revenue has not succeeded in showing that the price shown in the invoices does not reflect the true sale price.

In the light of the statutory provisions under Section 14 of the Customs Act, 1962, Rule 3 and 4 of CVR, 2007 and the observations made in the various case laws, it was safely concluded that the revenue erred in rejecting the invoice price. Revenue is unable to provide any clinching evidence to prove undervaluation by the importer so as to reject the transaction value given in the invoice. The impugned order, is therefore affirmed and the present appeal filed by the Department was dismissed and the consequential relief, if any in favour of the respondent was allowed.

FULL TEXT OF THE CESTAT DELHI ORDER

1. This is an appeal filed by the Revenue challenging the Order-in-appeal No. 120(SM)/CUS/JPR/2022 Dated 29.07.2022 whereby the appeal filed by the respondent/importer was allowed and the Order-in-original was set aside.

2. The facts of the present case in short are that the respondent/importer had filed three bills of entry dated 27.01.2021 for clearance of imported goods ^‗Zinc Scrap, Saves/Scope‘ which were imported from M/s Olympic Metal, Miami, USA. As the Department noticed that the declared value of the goods was lower than the contemporaneous import of similar goods and that the sale involved an abnormal discount and abnormal rejection from ordinary competitive prices, a query was raised from the importer to provide material/evidence to justify the declared value in terms of Section 17(3) of the Customs Act, 1962. In response, the importer submitted his reply, however, the same was not accepted. The assessing officer vide Order-in-original dated 17.02.2021 rejected the declared value under Rule 12(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred as CVR, 2007) on the ground that the declared value of impugned goods, i.e., Rs. 107/- per kg. was lower than the value of similar goods being cleared at Rs. 157/- to Rs. 169/- per kg. as per the details of bills of entry given in Table ‘B’.

3. Being aggrieved, by the said order, the importer filed appeal which find favour with the Commissioner (Appeals). Referring to the provisions of Section 14 and 17 of the Customs Act, 1962 and Rule 12 of CVR Rules, 2007 and also various decisions on the subject, he concluded that the assessing officer failed to elaborate as to how the bills of entries referred for enhancement are comparable with the goods imported through disputed bills of entries and in view thereof held that the rejection of transaction value is unsustainable. The revenue has filed the present appeal before this Tribunal challenging the said order.

4. The question that arises for my consideration is whether the assessing officer has rightly rejected the declared value/ transaction value and whether the Revenue has discharged his obligation to prove undervaluation.

5. I have heard the learned Authorised Representative forthe Revenue and also the learned Counsel for therespondent/importer and perused the records of the case.

6. The revenue referred to other bill of entries and submitted that it is a case of undervaluation by the importer and therefore declared value has been rightly rejected by the assessing On the other hand, the learned counsel for the importer has submitted that the imports relied on by revenue are not at all identical goods to the goods in question in the absence of any evidence in that regard, also for the reason that the imported goods being scrap was not homogeneous commodity and therefore cannot be compared. In support of his submission he referred to the decision of the Apex Court in Century Metal Recycling Pvt. Ltd., 2019 (367) ELT 3. He also submitted that transaction value cannot be discarded as the revenue has failed to produce any evidence to prove undervaluation as mandated under the rules.

7. The provisions of Section 14 of the Customs Act, 1962 and the Rules made thereunder for determination of value of imported goods have been interpreted and settled in various decisions by the Higher Courts as well as by this Tribunal. Before examining the issue, it is relevant to extract the provisions of Section 14 of the Customs Act and the relevant rules of CVR, 2007:-

Section 14 of Valuation of goods.-

(1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf:

Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf:

Provided further that the rules made in this behalf may provide for,^—

(i) the circumstances in which the buyer and the seller shall be deemed to be related;

(ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case;

(iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section:

Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50.

(2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value.

Explanation. ^—For the purposes of this section^—

(a) ‘rate of exchange’ means the rate of exchange^—

(i) determined by the Board, or

(ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;

(b) ‘foreign currency’ and ‘Indian currency‘ have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).]

Rule 2(g)

(g) “transaction value” means the value referred to in sub-section (1) of section 14 of the Customs Act, 1962;

Rule 3 and 4

3. Determination of the method of valuation.-

(1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10;

(2) Value of imported goods under sub-rule (1) shall be accepted: Provided that –

(a) there are no restrictions as to the disposition or use of the goods by
the buyer other than restrictions which –

(i) are imposed or required by law or by the public authorities in India; or

(ii) limit the geographical area in which the goods may be resold; or

(iii) do not substantially affect the value of the goods;

(b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued;

(c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and

(d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below.

(3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price.

(b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time.

(i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India;

(ii) the deductive value for identical goods or similar goods;

(iii) the computed value for identical goods or similar goods:

Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of rule 10 and cost incurred by the seller in sales in which he and the buyer are not related;

(c) substitute values shall not be established under the provisions of
clause (b) of this sub-rule.

(4) if the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9.

4. Transaction value of identical goods. –

(1) (a) Subject to the provisions of rule 3, the value of imported goods shall be the transaction value of identical goods sold for export to India and imported at or about the same time as the goods being valued;

Provided that such transaction value shall not be the value of the goods provisionally assessed under section 18 of the Customs Act, 1962.

(b) In applying this rule, the transaction value of identical goods in a sale at the same commercial level and in substantially the same quantity as the goods being valued shall be used to determine the value of imported goods.

(c) Where no sale referred to in clause (b) of sub-rule (1), is found, the transaction value of identical goods sold at a different commercial level or in different quantities or both, adjusted to take account of the difference attributable to commercial level or to the quantity or both, shall be used, provided that such adjustments shall be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustments, whether such adjustment leads to an increase or decrease in the value.

(2) Where the costs and charges referred to in sub-rule (2) of rule 10 of these rules are included in the transaction value of identical goods, an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport.

(3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods.”

8. The first step in considering the issue of rejection of the declared value and undervaluation is whether the Revenue has produced cogent reasons for disallowing or rejecting the transaction value. In the present case, the Revenue has given instances of contemporaneous import by giving the details of bills of entry as noted by the adjudicating authority, which is quoted below:-

Perusal of the above chart do not show that the imports are of identical goods on same commercial level and transaction. Relying on the decision of this Tribunal in the case of SPL Enterprises vs. Commissioner of Customs, New Delhi – 2018 (363) ELT 881 (Tri. Del.), it is not clear from the aforesaid details given in the table as to how the said bill of entries were compared with the present bill of entries. As noted in the said decision, for arriving at the contemporaneous value, the level of transaction should be contemporaneous in all respects. Such comparison should take into account the country of origin, quantity imported, terms of such import and period of import etc.

9. From the records of the case and the findings recorded by the adjudicating authority, it clearly appears that there is no evidence that the bill of entries relied on by the revenue as contemporaneous imports were of similar goods at same commercial level and in substantially the same quantity and had their origin from the same country. If undervaluation is alleged by the revenue then it is incumbent upon them to conduct detailed enquiries so as to collect substantive material and evidence to prove undervaluation. The next step is to determine the nature of the goods which are the subject matter of the contemporaneous imports as to whether they are identical goods or similar goods as defined under Rule 2(d) & 2(f) respectively. The definition of ^‗identical goods‘ in rule 2(d) & definition of ^‗similar goods‘ in rule 2(f) are as follows:-

^“(d) “identical goods” means imported goods –

(i) which are same in all respects, including physical characteristics, quality and reputation as the goods being valued except for minor differences in appearance that do not affect the value of the goods;

(ii) produced in the country in which the goods being valued were produced; and

(iii) produced by the same person who produced the goods, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods;

— —- —-

(f) “similar goods” means imported goods – (i) which although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality, reputation and the existence of trade mark; (ii) produced in the country in which the goods being valued were produced; and (iii) produced by the same person who produced the goods being valued, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods; (g) “transaction value” means the value referred to in sub-section (1) of section 14 of the Customs Act, 1962;^‖

The said two provisions have been considered in a recent decision of the Tribunal in the case of Haripriya Traders vs. Commissioner of Customs, Cochin (2023) 5 CENTEX 209, where the test of ^‗quality assessment‘ was referred for ascertaining the nature of goods under comparison. The observations made in para 4.7 are as under:-

“4.7 A plain reading of the definition of the term “similar goods” makes it clear that the goods being compared must have like characteristics and like component material, which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality and reputation. This ipso facto makes quality assessment compulsory to ascertain the comparable and interchangeable nature of goods under comparison. In the absence of any material to prove its legal comparison, its contemporaneous nature fails, resulting in non-adoptability of Rule 5. We find that in the instant case, Revenue has not come with any evidence, either in the nature of any reports or documents to meet the standards prescribed under Rule 5 supra. Therefore we are unable to uphold the orders passed by the Original Authority as well as Appellate Authority. Before concluding, we may observe that the both Original order and Appellate Orders places no reliance on Rule 4, even though it applied mutatis mutandis to Rule 5. Even in the absence of such reference, we find that Rule 4 (1) (b), (c), 4(2) and 4(3) also speaks about applicability of this rule in cases of identical goods in a sale/or not and its cost component, at the same commercial level and in substantially the same quantity. We have already discussed in the foregoing paragraphs and found that identical nature of the goods, compared in this case, are not proved in the manner established under law and therefore applicability of this rule and sub rule mutatis mutandis to Rule 5 also fails.”

Applying the ratio of the aforesaid decision, I find that no such case have been pleaded by the revenue and hence no reliance can be placed on contemporaneous imports by merely providing the copies of some bill of entries.

10. I find that the adjudicating authority noted in its order that as per NIDB import data, there are no identical goods available for determination of value as per Rule 4 of CVR, 2007. In view of such findings, I am of the opinion that the transaction value has to be adopted as the correct value and rejection thereof is contradictory and unsustainable. The Commissioner (Appeals) has referred to the decision of the Apex Court in Century Metal Recycling Pvt. Ltd., vs. Union of India (supra) in the impugned order, quoting the following para:-

“23. We would now refer to the findings of the order-in-original in the present case which observes that the appellants had declared value of the aluminium scrap as Rs. 81.31 per kg, albeit the contemporaneous import data in the form of different bills of entry had indicated aluminium scrap values between Rs. 83.26 to Rs. 120.97 per kg. The said portion of the order refers to at least four bills of entries declaring assessable value of less than Rs. 85 per kg. Interestingly, the order in original also records that the imported goods being aluminium scrap was not a homogeneous commodity and therefore, cannot be evaluated on the basis of the samples or lab testing. Further, the order holds that it was very difficult to find any identical!similar goods imported in India having same chemical and physical composition and that the values of aluminium scrap identical!similar to the imported goods in nature and specification were not available. Without commenting on correctness of the said statements, we would observe that the aforesaid reasoning for rejection of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports or other material indicating and serving as corroborative evidence of import at or near the time of import which would justify rejection of the declared value and enhancement of the price declared in the bill of entry. We have also elaborated and explained the legal position with reference to Rule 12 of the 2007 Rules.”

(Emphasis laid)

Applying the analogy as laid down in the aforesaid judgement, the learned Counsel referred that scrap is not a homogenous commodity and it is difficult to find any identical! similar goods imported in India which will have same chemical and physical composition. The Tribunal is bound by the observations of the Apex Court in Century Metal Recycling (supra), and therefore in terms of para 26 which mandates to examine the matter on a case to case basis, the evidence and the material placed on record and the enquiries conducted, I find that the rejection of the transaction value is erroneous in the present factual matrix.

11. The concept of transaction value has been provided under Rule 4 of CVR, 2007 which makes it mandatory for the authorities to accept the transaction value as provided by the importer, however the same can be rejected subject to the conditions! exceptions as specified therein. Here it is not the case of the revenue that the transaction under consideration is covered under any of the exceptions and therefore the transaction value declared by the importer is not acceptable. No allegation has been made that the transaction was tainted or was not at arms length. No evidence has been led by the Revenue that undervaluation was on account of the circumstances mentioned in the Rules, referred above, I am therefore of the considered view that since the present case does not fall under the exceptions provided in the Rules there is no scope to reject the transaction value. Reliance is placed on the decisions of the Supreme Court in Eicher Tractors Ltd vs. Commissioner of Customs, Mumbai 2000 (122) ELT 321, Choudhry Ship Breakers vs. Commissioner of Customs, Ahmedabad 2010 (259) ELT 161, Commissioner of Customs Vishakapatnam vs. Aggarwal Industries Ltd., 2011 (272) ELT 641 and CCE & S.T. Noida vs. Sanjivani Non-Ferrous Trading – 2019 (365) ELT 3 analysing the provisions of Section 14 of Customs Act and rule 4 of CVR, 1988.

In Eicher Tractors Ltd., vs. Commissioner of Customs, Mumbai (supra) it was hold:-

^“7. The rules which have been framed are the Customs, Valuation (Determination of Price of Imported Goods) Rules, 1988. The rules came into force on 16th August, 1988. Under Rule 3(i) “the value of imported goods shall be the transaction value”. “Transaction value”‘ has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1) in turn states :

“The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules.”

8. Reading Rule 3(i) and Rule 4(1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4(2) namely :

(a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which

(i) are imposed or required by law or by the public authorities in India; or

(ii) limit the geographical area in which the goods may be resold; or

(iii) do not substantially affect the value of the goods;

(b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued;

(c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and

(d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3).”

9. These exceptions are in expansion and explicatory of the special circumstances in Section 14(1) quoted earlier. It follows that unless the price actually paid for the particular transaction falls within the exceptions, the Customs authorities are bound to assess the duty on the transaction value.

—- —-

12. Rule 4(1) speaks of the transaction value. Utilisation of the definite article indicates that what should be accepted as the value for the purpose of assessment to customs duty is the price actually paid for the particular transaction, unless of course the price is unacceptable for the reasons set out in Rule 4(2). ” Payable” in the context of the language of Rule 4(1) must, therefore, be read as referring to “the particular transaction” and payability in respect of the transaction envisages a situation where payment of price may be deferred.

— — —

14. It is only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determining the value under the subsequent Rules.^‖

Later, in Choudhry Ship Breakers vs. Commissioner of Customs, Ahmedabad (supra) the Court observed:

^“15. According to Section 14(1) of the Act, assessment of customs duty under the Customs Tariff Act, 1975 is to be made on the value of the goods imported. Unless the value of the goods is fixed under the sub-section (2) of Section 14, the value has to be determined under sub-section (1) of the said Section. The value, as per Section 14(1), as it stood prior to its amendment with effect from 10th October 2007, shall be deemed to be 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. The word “ordinarily” is clarified in the Section itself, which describes an “ordinary” sale as one ^―where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale…^‖. According to Section 14(1A) price of imported goods is to be determined in accordance with the Rules framed in this behalf. Under Rule 3(i) of the 1988 Rules, the value of the imported goods shall be the ^―transaction value^‖. Transaction value has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1), in turn, states that ^―the transaction value of the imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these Rules.^‖ It is clear from a conjoint reading of Rule 3(i) and Rule 4(1) that the adjudicating authority is bound to accept the price actually paid or payable for the goods as the transaction value, except where exceptions enumerated in Rule 4(2) are attracted, which is not the case here. It is, therefore, manifest that both Section 14(1) and Rule 4 provide that in the absence of any of the special circumstances indicated in Section 14(1) and particularised in Rule 4(2) of the 1988 Rules, the price paid by an importer to the seller in the ordinary course of commerce is to be taken as the transaction value for the purpose of valuation of goods.”

(Emphasis laid)

In Aggarwal Industries (supra) the Court observed as under:-

11. On a plain reading of Sections 14(1) and 14(1A), it is clear that the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in Section 14(1) of the Act. Section 14(1) is a deeming provision as it talks of deemed value of such goods. The determination of such price has to be in accordance with the relevant rules and subject to the provisions of Section 14(1) of the Act. Conjointly read, both Section 14(1) of the Act and Rule 4 of CVR, 1988 provide that in the absence of any of the special circumstances indicated in Section 14(1) of the Act and particularized in Rule 4(2) of CVR 1988, the price paid or payable by the importer to the vendor, in the ordinary course of international trade and commerce, shall be taken to be the transaction value. In other words, save and except for the circumstances mentioned in proviso to Sub-rule (2) of Rule 4, the invoice price is to form the basis for determination of the transaction value. Nevertheless, if on the basis of some contemporaneous evidence, the revenue is able to demonstrate that the invoice does not reflect the correct price, it would be justified in rejecting the invoice price and determine the transaction value in accordance with the procedure laid down in CVR, 1988. It needs little emphasis that before rejecting the transaction value declared by the importer as incorrect or unacceptable, the revenue has to bring on record cogent material to show that contemporaneous imports, which obviously would include the date of contract, the time and place of importation, etc., were at a higher price. In such a situation, Rule 10A of CVR, 1988 contemplates that where the department has a ^‗reason to doubt‘ the truth or accuracy of the declared value, it may ask the importer to provide further explanation to the effect that the declared value represents the total amount actually paid or payable for the imported goods. Needless to add that ^‗reason to doubt‘ does not mean ^‗reason to suspect‘. A mere suspicion upon the correctness of the invoice produced by an importer is not sufficient to reject it as evidence of the value of imported goods. The doubt held by the officer concerned has to be based on some material evidence and is not to be formed on a mere suspicion or speculation. We may hasten to add that although strict rules of evidence do not apply to adjudication proceedings under the Act, yet the Adjudicating Authority has to examine the probative value of the documents on which reliance is sought to be placed by the revenue. It is well settled that the onus to prove undervaluation is on the revenue but once the revenue discharges the burden of proof by producing evidence of contemporaneous imports at a higher price, the onus shifts to the importer to establish that the price indicated in the invoice relied upon by him is correct.

12. It is a settled principle of law that the onus of proving charge of undervaluation lies on the Revenue which needs to be proved by way of producing necessary evidence. Reliance is placed on the decision of the Apex Court in Mirah Export Pvt. Ltd., vs. Commissioner of Customs -1998 (98) ELT 3 and South India Television-2007(214) ELT 3, Commissioner of Customs vs. Aggarwal Industries -2011 (272) ELT 641. The revenue in the present case except for referring to the bills of entry has not placed on record any further evidence in accordance with the statutory provisions to show that the goods covered under those bill of entries are actually identical to the goods in question to prove that the importer has indulged in undervaluation. Instances given by the revenue cannot be considered to be import of identical goods and in absence thereof it is not possible to sustain the charge of undervaluation. Reliance is placed on the decision of this Tribunal in

the case of Prashant Glass Works Private Limited vs. Commissioner of Customs, Calcutta, 2001 (134) ELT 791. The relevant para of the judgement is quoted herein:-

^“5. We, further, observe that after this observation made by the Bench, the Revenue has only produced a Bill of Entry dated 8-12-1999 showing the price of U.S. $ 5900 per M.T. but this import cannot be considered to be import of identical goods under Rule 5 of the Customs Valuation Rules. For applying the value of identical goods these must be imported at or about the same time as the goods being valued and the value of identical goods should be in a sale at the same commercial level and in substantially the same quantity as the goods being valued. The learned Advocate for the Appellants has correctly emphasised that the quantity imported under the said Bill of Entry is only 4.2 M.T. as against the import of 20 M.T. by them and the goods have been purchased from Singapore whereas the Appellants have purchased the goods from 1st stage dealer in Japan itself. We are, therefore, of the view that the said Bill of Entry dated 8-12-99 cannot be relied upon to determine the assessable value of the imported goods as both the quantity and place of import are different. The Supreme Court in the case of Mirah Exports (P) Ltd. v. C.C., 1998 (98) E.L.T. 3 (S.C.) has held that ^―the burden of proving a charge of undervaluation lies upon the Revenue and Revenue has to produce the necessary evidence to prove the said charge.^‖ Ordinarily the Court should proceed on the basis of the apparent tenor of the agreement reflects the real state of affairs and what is to be examined is ^―whether the Revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price.^‖ The opportunities were given to the Revenue to adduce the evidence to prove that the invoice price was not the correct sale price. The Revenue, however, has not succeeded in adducing any satisfactory evidence to show that the price declared by the Appellants is not the correct contracted price. We also find that the Adjudicating Authority relied upon the Chemical Trade Intelligence Bulletin of October 1st, 1999 as it was more proximate to the contract entered into by the Appellants in September, 1999. We agree with the learned Advocate for the Appellants that the said Bulletin for October, 1999 did not contain the price of the imports made in September or October but the imports made in July. Further, there is no indication as to when the contract for those imports was entered into. We, therefore, hold that Revenue has not succeeded in showing that the price shown in the invoices does not reflect the true sale price. We, therefore, set aside the impugned Order and allow the appeal.”

13. In the light of the statutory provisions under Section 14 of the Customs Act, 1962, Rule 3 and 4 of CVR, 2007 and the observations made in the various case law, it can be safely concluded that the revenue erred in rejecting the invoice price. I agree with the arguments made by the learned Counsel for the respondent that revenue is unable to provide any clinching evidence to prove undervaluation by the importer so as to reject the transaction value given in the invoice. The impugned order, is therefore affirmed and the present appeal filed by the Department is dismissed and the consequential relief, if any in favour of the respondent is allowed.

14. Appeal is, accordingly dismissed.

(Order pronounced 31^st July 2023).