The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside the Order-in-Original dated January 28, 2022, holding that the Customs Department was not justified in rejecting the declared transaction value of imported LED TVs and drywall screws based on third-party proforma invoices and inadmissible printouts bearing no signature. The Bench comprising Rachna Gupta and P.V. Subba Rao held that mere comparison with documents relating to other importers cannot form the basis for re-determination of value under Section 14 of the Customs Act, 1962, read with the Customs Valuation Rules, 2007.
The case arose from an imported consignment under Bill of Entry No. 4973274 dated January 27, 2018, where the appellant declared the goods to be unbranded LED TVs. The goods were examined by the SIIB and found to conform to the declaration made in the Bill of Entry. Despite this, the Department alleged undervaluation and misdeclaration because some LED panels displayed brand stickers. The goods were seized on April 24, 2018, provisionally released on execution of bonds and bank guarantees, and a show cause notice dated March 12, 2021, was issued proposing rejection of the declared value for the Bill of Entry as well as six past Bills of Entry covering imports made between 2016 and 2018.
The Tribunal noted that the Department itself had admitted in the show cause notice that the imported goods were found to be in conformity with the bill of entry. Thereafter, the Tribunal held that the presence of brand stickers on one component of the LED panel does not render the entire television a branded product, particularly where such branding was discovered only after dismantling the product.
The Tribunal further found that the Department’s allegation of undervaluation was primarily based on computer printouts and proforma invoices recovered during investigations relating to third parties, and held that such records were inadmissible in evidence as the mandatory requirements under Section 138C of the Customs Act, governing the admissibility of electronic records, had not been complied with and the prescribed certificate was absent. It was further held that comparison with invoices of different suppliers, buyers, and earlier financial years is impermissible, especially in technology-driven industries where prices fluctuate.
Accordingly, for the six past Bills of Entry, the Tribunal held that the Department failed to produce any contemporaneous evidence to justify rejection of the declared value. Accordingly, the Tribunal set aside the impugned order in its entirety and allowed the appeal.
Appearances:
For the Appellant – Shri Vikas Sareen, Shri Akhil Krishan Maggu and Ms. Mehak Sharma, Advocates
For the Respondent – Shri Girijesh Kumar, Authorised Representative
