Transaction value cannot be rejected on the basis of a quotation which gives domestic retail sale price

CA Bimal Jain

Sanjay Kumar Agarwal and Balaji International (the Appellant) has filed Bill of Entry for import of Flex Sheeting Frontlit and Flex Sheeting Backlit from Grand Dignity Industrial Co. Ltd., Taiwan declaring the price as US$ 1100 PMT and US$ 1200 PMT respectively. The Department doubted the valuation of declared transaction value and obtained a quotation from M/s. Max Flex & Imaging Systems Pvt. Ltd., Mumbai. From the quotation of retail sale prices, the assessable value was worked out to be US$ 2520 and US$ 3520 PMT respectively. Accordingly, the Department confirmed the differential demand along with confiscation of goods and imposition of redemption fine on the basis of quotation obtained.

The Hon’ble CESTAT, Mumbai has held that transaction value cannot be rejected on the basis of a quotation, which gives domestic retail sale price. If this were to be accepted, it would cause unimaginable distortion in interpreting the Valuation Law. Hence, confirming demand merely on the basis of quotation, without considering other facts is not sustainable.