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Arihant Electronics Vs. the Commissioner of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT
Decided On
Judge
Reported in(2006)(113)ECC17
AppellantArihant Electronics
RespondentThe Commissioner of Customs
Excerpt:
.....of importation, quantity imported etc., have to be comparable. valuation - customs - transaction value - contemporaneous imports - imports - imports made 9 months back not contemporaneous imports - particularly in case of electronic goods which are getting cheaper in competitive world - period of confiscation being normally three months, such value cannot be confiscated, and goods not identical under rule 5 of the customs valuation rules 1985. enhancement of value from us $ 0.613 to us $0.81 not sustainable (section 14 of ca) valuation customs - transaction value - rejection of - in absence of comparable prices or availability of same in respect only one importer or revision of prices without making available the invoices related to the imported goods to importer, transaction value.....
Judgment:
1. This appeal arises from Order-in-Original No. 27/2005 dated 6.1.2006. The appellants had imported a consignment of Potentiometers Electronic Component from China. The allegation against the appellant is that they have under-invoiced the same in the Bill of Entry No. 3095 dated 6.4.2004 by which they have made clearances of 3,49,000 pieces of the said goods. The Department proceeded to enhance the value in terms of the prices available at Bangalore in respect of the same item.

Further, the appellant contested that only comparable price from the same origin and from the same time and place should be taken for enhancing the value as laid down under Section 14 of the Customs Act, which has been affirmed by the Apex Court and the Tribunal in large number of cases. The learned Counsel submits that prevailing retail prices at Bangalore cannot be taken without ascertaining the place of origin, time and place. Therefore, the very method of reassessing has been challenged, as it is not as per the terms of Section 14 of Customs Act and large number of judgments. The learned Counsel particularly pointed out to the judgment of Apex Court rendered in the case of Eicher Tractors Ltd. v. CC, Mumbai and filed the following list of citations and submits that the enhancement of value is required to be set aside and the declared value is required to be accepted.

(ii) CC, Cochin and Anr. v. Zahu Marketing and Anr. 2006 (74) RLT 822 (CESTAT-Bang.)Agarwal Industries v. CC, Vizag (iv) S&S International v. CCE, Hyderabad 2005 (192) ELT 194 (Tri.-Bang.)CCE, Kanpur v. Sanabil Impex (P) Ltd. (viii) Sundek India Ltd. v. CC, Kandla 2005 (192) ELT 900 (Tri.- Del.)CC (Import), Mumbai v. Kantilal Manilal & Co. Pvt. Ltd. 2005 (71) RLT 767 (CESTAT-Mum.) (x) Ramachandra Art Silk Yarn Trading Co. v. CC (Import), Nhava Sheva 2006 (73) RLT 627 (CESTAT-Mum.) 2. The learned JCDR submits that the importer admitted the liability and therefore, there is no question of Revenue producing any evidence in the matter.

3. We have carefully considered, the submissions and find that the evidence produced by the Revenue pertaining to retail price of said item in Bangalore cannot be considered to support the allegation of undervaluation, as held in large number of cases noted by the learned Counsel in the written submission in Para 11 to 14, which are reproduced herein below.

11. The appellant relies on various case laws in support of the submission that valuation cannot be made based on quotations and proforma invoices in the absence of contemporaneous imports.

Valuation Customs - Proforma invoice/quotation being only a tentative statement of the seller for sale of goods at the price mentioned therein, it is not a relevant evidence of sale of price in the absence of actual import in pursuance of such invoice/quotation Valuation Customs - Proforma invoice is only invitation to offer and not evidence of sale price - It cannot be used to load value - Section 14 of CA Valuation - Customs - evidence - Proforma invoices do not constitute firm prices - they are only tenders for offers and these prices are open to negotiation" - Section 14 of the CA. 12. Case laws in support of the position that the country of importation, period of importation, quantity imported etc., have to be comparable.

Valuation - Customs - transaction value - contemporaneous imports - imports - imports made 9 months back not contemporaneous imports - particularly in case of electronic goods which are getting cheaper in competitive world - period of confiscation being normally three months, such value cannot be confiscated, and goods not identical under Rule 5 of the Customs Valuation Rules 1985. Enhancement of value from US $ 0.613 to US $0.81 not sustainable (Section 14 of CA) Valuation Customs - transaction value - rejection of - in absence of comparable prices or availability of same in respect only one importer or revision of prices without making available the invoices related to the imported goods to importer, transaction value cannot be rejected - Section 14 of C 13. The Hon'ble Tribunal in the case of Durga Marketing - -- has clearly observed that enhancement of value on local market price is not sustainable. The following head notes, relating to para 1, 2, 4, 5 of the said decision are reproduced hereunder for ready reference.

Valuation (Customs) - enhancement of value based on local market price of such goods with deductions for various elements not sustainable when various post - importation expenses sought to be reduced based purely on assumptions made by adjudicating authority and not on any material -Section 14 of Customs Act, 1962.

Valuation (Customs) - quotations - a single quotation by itself not a sufficient evidence to base assessable value on, particularly also when quotation relied upon not for same goods but for a different model - Section 14 of CA 1962.

Valuation (Customs) - comparable goods, basis of - Electronic Components with different serial numbers are dissimilar goods as, even when being electronic components, each serial number represents particular features, and hence not comparable goods for valuation - Section 14 of CA 1962.

14. It is also settled position that the price quotation by a dealer in India cannot be a basis for determination of value either under Rule 5 of Rule 8.Commissioner of Customs v. H.M. Leisure Bangalore Valuation of goods cannot be determined on the basis of selling price in India.

Valuation - Customs - under valuation - contemporaneous imports - quantity of imports - imports of identical goods made from different country and from same country, but the comparatively much low quality not to be regarded as contemporaneous imports - Dept. failed to discharge burden to prove charges of under valuation/mis-declaration - Rule 5 Valuation - Customs - under valuation contemporaneous import - proof of - Tribunal's decision in Dwaralas G. Kanjari v. Commissioner 2001 (137) ELT 957 - that for the purpose of enhancing the value there has to be evidence of contemporaneous import of same goods, from the same country, quality and quantity followed - appeal allowed.

4. In terms of the above cited judgments and gist of order noticed therein, we are of the considered opinion that in order to enhance the value in terms of Section 14 of Customs Act, Revenue should produce sufficient evidence with regard to the charge of undervaluation. The burden has to be discharged by the Revenue and mere recorded statement is not sufficient to uphold the charge of undervaluation. In the present case, the retail value has been taken from Bangalore which cannot be considered to be in terms of law. The value as prevailing in the country of origin during the time and place of import is the criteria and not the retail price as prevalent in India. Therefore, the order passed by the authorities is not in terms of law and cited judgment and the same is set aside by allowing the appeal with consequential relief, if any.


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