Whether the value of goods can be enhanced based on contemporaneous price without ascertaining the necessary aspects of contemporaneous goods ?

PJ/CASE LAW/2016-17/3087

Case: PRAYAS WOOLLENS PVT. LTD. Vs COMMISSIONER OF CUS. (IMPORT), MUMBAI

Citation: 2016 (332) E.L.T. 376 (Tri. - Mumbai)

Brief Facts: - The Appeal is directed against Order-in-Appeal passed by the Commissioner of Customs (Appeals), wherein the Ld. Commissioner rejected the appeal in case of four imports and allowed the appeal in two cases.
The facts of the case is that the appellant M/s. Prayas Woollens Pvt. Ltd. imported rags under five Bills of Entries. It was noticed by the appraising group III that goods have been imported at lower price than the prevailing international market price. The goods were provisionally released on execution of PD Bond/Bank Guarantee/Revenue deposit pending enquiries in the matter. The Additional Commissioner adjudicated the case and ordered to enhance the value as per the prevailing international market price.
Aggrieved by the original order, the appellant filed the appeal before Commissioner (Appeals), Mumbai, who allowed the appeal of the appellant on the ground that the show cause notice was not issued and natural justice was denied to the appellant. Aggrieved, the revenue preferred appeal before the Tribunal; the Tribunal set aside the Order-in-Appeal and remanded the matter to Commissioner (Appeals). In the remand proceeding the Commissioner (Appeals) vide the impugned order allowed the appeal in case of two Bills of Entry and rejected the appeal in respect of four Bills of Entry. Being aggrieved by this impugned order, the appellant is before this court.

Appellant’s Contention:The lower authorities enhanced the value on the contemporaneous price obtained in relation of similar goods during November, 1998 to November, 1999, however no material was ever produced by the department in support of contemporaneous price of goods. He further submits that before applying the said contemporaneous price, the revenue has not verified the various aspects such as quality, country origin, colour, grade and various characteristics etc. of the goods. In absence of this verification, price of contemporaneous import cannot be applied. In the present case, the goods imported is rags which is a residual product, not a standard product. Therefore, in case of this product, it is difficult to have a uniform price of rags which is having different characteristics, therefore merely by taking price of contemporaneous import without providing any documents, it is very difficult to ascertain that goods imported by the appellant and so called contemporaneous goods are same. Therefore, the enhancement made by the lower authority is arbitrary and without any basis, therefore the same is not sustainable.

Respondent’s Contention:Respondent reiterates the findings of the impugned order.

Reasoning of Judgment:Though in the adjudication order the authority has relied upon the price of contemporaneous goods, but no any evidence in support of contemporaneous import was adduced. The goods imported by the appellant is rags which admittedly a residual product. The residual product cannot be of standard quality. As regards its characteristics, quality, size, shape, colour etc. it varies from consignment to consignment.
Since no evidence was produced by the Revenue, enhancement of the price of the impugned goods appears to be without any basis. It is a trite law that for applying the price of contemporaneous goods, it is necessary to ascertain that the goods is of same character, quality, quantity, country of origin etc. and without ascertaining the same, the adoption of price of contemporaneous goods cannot be treated as price of contemporaneous goods. Due to the said deficiency in the whole proceeding, there is no sufficient basis for revenue to enhance the value of imported goods.

Decision: Appeal Allowed

Comment: The gist of the case is that the value of goods cannot be enhanced based on contemporaneous price without ascertaining the goods is of same character, quality, quantity, country of origin etc. and without ascertaining the same, the adoption of price of contemporaneous goods cannot be treated as price of contemporaneous goods.

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PJ/CASE LAW/2016-17/3087

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