Legal principle

Under rule 9 of the Customs Valuation Rules, 2007, the value of imported goods may be re-determined with reasonable flexibility (including reliance on NIDB data of contemporaneous imports irrespective of country of origin), provided the data relied upon is made known to the importer who fails to produce contrary contemporaneous data.

Court decision

The Tribunal allowed the department's appeals in 359 cases, set aside the Commissioner (Appeals)' orders and restored the Deputy Commissioner's orders re-determining the value under rule 9 of the Valuation Rules. For Customs Appeal Nos. 51942, 51943 and 51944 of 2022 (where rule 5 was invoked on a cryptic finding), the issue was remitted to the Deputy Commissioner for fresh re-determination, restoring the Deputy Commissioner's order dated 24.11.2021 only to the extent it rejected the declared value.

Facts

Four importers (CMR Nikkei India Pvt. Ltd., Sanjivani Non-Ferrous Trading Pvt. Ltd., CMR Green Technologies Ltd. and Century Metal Recycling Pvt. Ltd.) imported aluminium scrap of various grades ('Zorba', 'Twitch', 'Tense', 'Troma', 'Taint Tabor', 'Tense/Taint Tabor') and filed Bills of Entry with self-assessed values based on transaction value. The Deputy Commissioner of Customs, ICD Concor, Kanakpura, Jaipur doubted the declared values and, in some cases after provisional assessment under bonds with bank guarantees, rejected the self-assessed value under rule 12 of the Customs Valuation Rules, 2007 read with section 14 of the Customs Act and re-determined the value (under rule 9 in most appeals, rule 5 in three appeals) with differential duty and interest. The Commissioner (Appeals), Jaipur set aside the Deputy Commissioner's speaking orders in appeals arising from orders dated 21.04.2022, 01.06.2022 and 07.07.2022. The department filed 362 appeals before the CESTAT, New Delhi.

Key provisions

• Section 14, Customs Act, 1962 — Valuation of goods
• Rule 9, Customs Valuation (Determination of value of Imported goods) Rules, 2007 — Residual method
• Rule 5, Customs Valuation (Determination of value of Imported goods) Rules, 2007 — Transaction value of similar goods
• Rule 12, Customs Valuation (Determination of value of Imported goods) Rules, 2007 — Rejection of declared value
• Section 17(4), Customs Act, 1962 — Assessment of duty
• Rule 3, Customs Valuation (Determination of value of Imported goods) Rules, 2007 — Determination of the method of valuation
• Section 18, Customs Act, 1962 — Provisional assessment of duty