Order Dated: 02 June 2022

Facts:

• The appellant “M/s S.D. Overseas” had imported a consignment of Food Supplements through ICD, Tughlakabad and filed a Bill of Entry dated 04.01.2013 and the goods were cleared on 05.01.2013. Thereafter, receiving intelligence had told that the goods cleared by the above bill of entry were highly undervalued. Officers initiated an enquiry and details of goods such as description, quantity, contemporary value etc. covered by the bill of entry were retrieved from the National Import Database of the Electronic Data Interchange System (NIDB). 

• A Show Cause Notice was issued on 13 December 2013, to the appellant calling upon it to explain as to why the declared assessable value should not be rejected under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 20077 and re-determined as per Rule 5 of the Valuation Rules.

• The primary submission of the appellant is that the data derived from NIDB cannot prove that it has mis-declared the value and, therefore, the transaction value should not have been rejected in terms of Rule 12 of the Valuation Rules.  Once the transaction value is not rejected, the value cannot be re-determined as per the Valuation Rules.

Issues:

• Whether, the declared assessable value should not be rejected under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determined as per Rule 5 of the Valuation Rules?

Order:

• The Tribunal observed that in this particular case, the appellant has imported goods from a trader based in Dubai and the imported goods were food supplements. When the prices declared by the appellant were compared with the value of contemporaneous imports as per the data available in the 

NIDB and also as per the manufacturer’s price list, there was a vast difference and in some items the declared price was half or less of the manufactured price/contemporaneous import prices. such 

a vast difference between the prices of the same commodity by the same manufacturer provided the officer a reason to doubt.

• The Tribunal further said that at this stage is not possible for them to determine and establish whether the goods imported were indeed of inferior quality and that they had short shelf life except through documentary evidence which nowhere proves this assertion not even in the form of declaration by the importer to this effect in the bill of entry.  Had the appellant made a declaration to this effect the goods should have been examined and necessary licenses from the FSSAI could have been called for from the appellant. 

• In view of the same, the goods declared transaction value was correctly rejected under Rule 12 of the Valuation Rules by the original authority and such rejection were upheld by the impugned order.

• The appellant has mis-declared the value of the imported goods which were only a fraction of a price the goods as per the manufacturer’s price lists and, therefore, Tribunal did not find any reason to interfere with the penalty imposed under Section 114AA.

• Therefore, the appeal is rejected and the impugned order is upheld.