Order Date- 9 June 2022

Facts:

• The appellant, M/s Acmechem Ltd, submits that certain bills of entries, though backed by sales contract and sales invoice for price of US$ 2.95/kg and sufficing to qualify as ‘transaction value’ in the absence of any evidence to the contrary, was assessed at US$ 3.95/kg without the preliminary of show cause notice of intent to do so. Moreover, according to him, the ‘proper officer’ under section 17 of Customs Act, 1962 had failed to comply with the mandate therein for issue of speaking order justifying the re-valuation.
• This appeal arises from the enhancement of assessable value from US$ 2.95 per kg to US$ 3.95 per kg on the import of ‘DCBS N’ or ‘N Dicyclohexyl-2 Benzothiazole Sulfenamide’, a rubber accelerator, against five bills of entry comprising five consignments of 12000 kgs each that was upheld by Commissioner of Customs (Appeals), Mumbai -II in order-in-appeal no. 32-36 (Gr IIA)/2010 (JNCH)/IMP-28-32 dated 22nd July 2010 which is impugned herein.

Issue:

• Whether the ‘transaction value’ in the absence of any evidence to the contrary, enhancement of assessable value was assessed at US$ 3.95/kg from 2.95/kg is valid ?

Order:

• The Authorities observed that rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 empowers rejection of declared upon evidence to the contrary and, by default too, upon non-satisfaction of queries sought by the assessing officer. Two aspects are critical to such rejection: requiring such evidence to be furnished by importer as is necessary for acceptance of declared value as transaction value and, should the declared value be discarded, adoption of such value as is validated by the sequential alternatives in the Rules. 
• The authorities further observed that there is nothing on record to demonstrate that the necessary pre-requisite in rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had been set in motion; indeed, the entire process, commencing with failure to issue notice of intent and culminating in refusal to issue speaking order, appears to be devoid of any cognition of the principles of natural justice.
• It was held that the principle of natural justice though was not adhered even if the court does not look at that the mere absence of evidence to displace the declared value is enough that the order could be set aside on merit.