Tribunal Sets Aside Customs Valuation Based on NIDB Data in Favor of M/s Eagle International

CESTAT Kolkata rules against reliance on NIDB data for valuation without discarding transaction value with concrete evidence.

In a significant ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Kolkata has set aside the customs valuation enhancement based on NIDB data in favor of M/s Eagle International. The Tribunal emphasized the necessity for customs authorities to provide substantial evidence before rejecting the declared transaction value of imported goods.

The case revolved around consignments of water purifier spare parts imported by M/s Eagle International from China. The Customs authorities had rejected the transaction value declared by the importer, citing discrepancies and instead, enhanced the value based on data from the National Import Database (NIDB). This decision was challenged by the importer on the grounds of procedural lapses and lack of evidence.

The Tribunal, presided over by Mr. R. Muralidhar and Mr. K. Anpazhakan, meticulously reviewed the submissions and evidence presented. It was noted that the transaction value, as per the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, should be accepted unless there is justifiable reasoning for its rejection. The Tribunal found no such reasoning or evidence provided by the customs authorities that could warrant the discarding of the transaction value.

In its judgment, the Tribunal pointed out that merely relying on NIDB data without considering the transaction value is unsustainable in law. It reiterated that NIDB data can serve as a guideline but cannot be the sole basis for valuation enhancement without fulfilling the prerequisites outlined in the Customs Valuation Rules.

Additionally, the Tribunal highlighted that the customs authorities failed to demonstrate any direct or indirect payment over the declared invoice value, nor did they establish a relationship between the buyer and seller that could influence the transaction value. Therefore, it ruled that the transaction value declared by M/s Eagle International should form the basis of assessment.

The ruling also noted past precedents, reinforcing the principle that customs authorities must adhere to the Customs Valuation Rules, providing clear reasons and evidence when rejecting a declared transaction value. The Tribunal allowed the appeal by M/s Eagle International, setting aside the impugned order and granting consequential relief as per law.

This judgment underscores the importance of due process and evidence in customs valuation, reaffirming that transaction values should not be discarded arbitrarily. It serves as a reminder to customs authorities to exercise diligence and adhere strictly to legal provisions when assessing the value of imported goods.

Bottom Line:

Customs Valuation - Transaction value cannot be rejected without proper evidence - Reliance on NIDB data for enhancing the value without discarding the transaction value with plausible reasons is erroneous - Adherence to Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is mandatory.

Statutory provision(s): Customs Act, 1962 Section 14, Customs Valuation (Determination of Value of Imported Goods) Rules, 2007

M/s Eagle International v. Commissioner of Customs (Port), Kolkata, (CESTAT)(Kolkata)(Regional Bench) : Law Finder Doc Id # 2813972