Transaction value declared by an importer cannot be rejected solely based on non-statutory departmental guidelines or external price indices (like LME) without cogent evidence that the declared value is incorrect, especially after the assessment has attained finality.

S. S. GARG :

The present appeal is directed against the impugned Order-in-Original dated 29.03.2024 passed by the Commissioner of Customs, Ludhiana, whereby the learned Commissioner has rejected the value declared in the Bill of Entry under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (in short ‘the CVR, 2007’) and re-determined the same under Rule 9 of the CVR, 2007 in terms of the guidelines issued under Directorate General of Valuation letter dated 15.11.2018, and has confirmed the demand of Rs.99,59,607/- under Section 28(4) of the Customs Act, 1962 along with applicable interest under Section 28AA of the Customs Act and also imposed equal penalty under Section 114A of the Customs Act.

Briefly stated facts of the present case are that the Appellant has been importing Aluminium Scrap falling under CTH 76020010 of different grades as per ISRI. An investigation was undertaken by the officers of Special Intelligence & Investigation Branch of Customs Commissionerate (i.e. SIIB) in respect of import of Aluminium Scrap by the Appellant during the last five years. The Appellant was directed to furnish the Bills of Entry, copy of invoices issued by the manufacturer and other documents which are required by the Customs department. After the investigation, the department entertained the view that the Appellant had mis-declared the value (undervalued) of the imported goods and had contravened the provisions of Section 14 of the Customs Act, 1962 read with Rule 11 of CVR, 2007, as much as the Appellant had made a wrong declaration about the value of the goods in the Bill of Entry filed for importation of the goods with sole intention to evade the customs duty; the Appellant had done so willfully by suppressing the facts with intent to evade payment of customs duty; and therefore, extended period of limitation under Section 28(4) of the Customs Act was invoked. On these allegations, a Show Cause Notice dated 21.11.2023 was issued to the Appellant proposing the demand of Rs.99,74,690.93 under Section 28(4) of the Act along with interest under Section 28AA of the Act, after rejecting the transaction value. The Appellant filed detailed reply to the said Show Cause Notice and challenged the valuation made by the department. After following the due process, the learned Commissioner of Customs, vide impugned Order-in-Original, has rejected the declared value and confirmed the demand along with interest and equal penalty. Hence, the present appeal.

Heard both the parties and perused the material on record.

The learned Counsel for the Appellant submits that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts & the law and the binding judicial precedents on identical issue.

4.1 He further submits that during the period 01.09.2018 to 31.08.2023, the Appellant has filed 183 Bills of Entry in respect of import of Aluminium Scrap, which was imported from UK, USA, Hong Kong, Germany, Saudi Arabia and UAE. Less than 20% of the Bills of Entry are in respect of imports from UK.

4.2 He further submits that in fact the scarp was imported/purchased from traders and not from manufacturers and this scrap comprised of old, used and defunct articles of aluminium and hence invoice of manufacturer was not available with the Appellant. He further submits that during the investigation, the appellant has placed on record all documents which were in the possession of the Appellant including the invoices of the suppliers.

4.3 He further submits that the entire case of the department is based on the allegation that the Appellant had not produced the invoice of manufacturer, though invoices of suppliers were fulfilled. He further submits that the Appellant was asked to fulfill a condition which was impossible to fulfill.

4.4 He further submits that all the necessary documents were filed by the Appellant at the time of clearance of the said scrap and the said 183 Bill