Legal principle

The declared transaction value must be accepted as the correct assessable value unless the Revenue produces contrary evidence, such as proof of extra payment or remittance over the invoice price; general statements of indenting agents and market price bulletins alone cannot justify rejecting it.

Court decision

By majority, the Tribunal set aside the impugned order, allowed all the appeals with consequential relief to M/s JMD Oils, and held the charge of under-valuation of the transaction value unsustainable.

Facts

M/s JMD Oils Pvt. Ltd. imported three consignments of mixed acid oils and two of mixed fatty acid, declaring unit prices of US$190 (acid oils) and US$210/US$205 (fatty acid) with country of origin. Samples drawn and tested by CRCL were reported to be palm stearin/palm fatty acid rather than as declared. The importer initially accepted an assessed value of US$336.25 and US$415.5 and cleared the goods on payment of duty. Subsequently, on the basis of DRI investigation and voluntary statements of two indenting agents, Shri Rakesh Kumar and Shri Anil Kumar Arora, the Commissioner (Order-in-Original No. 23/2009 dated 17.03.2009) enhanced the assessable value to US$420 PMT and confirmed duty demands with penalties on all appellants.

Key provisions

• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 14, Customs Act, 1962 — Valuation of goods
• Section 28A, Customs Act, 1962 —  Power not to recover duties not levied or short-levied as a result of general practice
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things
• Section 114, Customs Act, 1962 — Penalty for attempt to export goods improperly etc