Introduction: The matter of Krupa Chaton Mfg. Co Pvt Ltd Vs Commissioner of Customs was brought before the CESTAT in Ahmedabad. The appellant argued against the improper rejection of the transaction value of imported goods and questioned the adequacy and relevance of NIDB data used by the department. This article explores the intricate details of the case and the subsequent order issued by the CESTAT.
Analysis: The central concern of the case revolved around the rejection of the transaction value and the utilization of NIDB data, with arguments referencing various legal provisions and past judgments, including Gira Enterprises vs Commissioner of Customs, Ahmedabad. The rejection of the transaction value was found to be lacking in substantial evidence and reason, leading the CESTAT to demand a re-adjudication.
The Tribunal criticized the original authority’s approach as unjustified, observing that proper rejection of the transaction value required a speaking order, detailing reasons for the non-acceptance of the value by the department. The reference to past judgments was found to be irrelevant and incorrect, leading to the decision to remand the matter for fresh evaluation.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
When the matter was came up for hearing, learned advocate for the appellant raised various grounds regarding improper rejection of the transaction value which he has been taken earlier also as well as regarding the adequacy and the relevance of NIDB data as well as other contemporaneous materials, which have been relied upon by the department.
2. The learned Authorized Representative justified the order on the basis that the original authority had rejected transaction value by citing various provisions and even the Commissioner (Appeals) has relied upon the decision of Gira Enterprises vs Commissioner of Customs, Ahmedabad as reported in 2014 (307) ELT 209 (S.C.) to justify rejection of transaction value.
4. We find that the decision in the matter of Gira Enterprises (supra) relied upon by the Commissioner (Appeals) was in relation to an import which took place in 1994 and had discussed in detail, the Customs Valuation Rules, 1988. It is pertinent to note that in Customs Valuation Rules, 1988, Rule 10A which pertains to manner of rejection of declared value and which is quite akin to present Rule 12 was introduced only in the year 1998 vide Ministry of Finance (DR) Notification No. 10/98-Cus (NT) dated 19.02.1998, therefore, the judgment relied upon by the learned Commissioner (Appeals) for the impugned imports was irrelevant for the impugned import. We also find that while order-in-original had reproduced Rule 12 in the course of discussion but there is hardly emerging any material on record indicating why the rejection of transaction value of the importer was justified and whether any invoices or any other documents given by them, as were called upon from them were found to be unacceptable, if so the reasons thereon.
5. In view of decision of Sarda Energy & Minerals vs C.C.E., Raipur as reported in 2018 (359) E.L.T. 262 (Tri. Delhi), which we too have suitably followed in this bench, we find that such an approach is unjustified under Provisions of Rule 12 of Customs Valuation Rules, 2007 and what is required is proper rejection of transaction value vide speaking order giving out reasons as to why the transaction value which even if doubted was not acceptable to the department. It appears that only doubt has been raised but rejection of transaction value has not been pronounced upon in detail. In view of this, at the outset, we find that the approach of rejecting transaction value, itself was incorrect and needed affording materials to the party. In view of the above we find that all other arguments relating to rejection of transaction value or NIDB data assumed insignificance at this stage since we are of the view that rejection of transaction value itself by the department was requiring disclosure of material and reasons to the party. Accordingly, we are inclined to remand the matter to the original adjudicating authority to decide rejection of transaction value afresh without being influenced by decision of Gira Enterprises (cited supra), which was incorrectly relied upon by the learned Commissioner (Appeals). Party shall be entitled to raise any other pleas. Matter remanded in above terms.
(Pronounced in the open court on 03.08.2023)