The appellant had filed several Bills of Entry for clearance of imported goods namely various types of VNS Professional Refill Ink purchased from Hong Kong. During the assessment of the Bills of Entry it was observed that the value declared by the importer was not found to be acceptable on the ground of contemporaneous import value of similar goods by the department. On query raised in terms of Rule 12(1) of the Customs Valuation Rules, 2007 for clarification of declared value by submitting documentary evidence, it is stated by the importer vide letter replied that they accept the price under protest and stated that they were ready to pay the provisional duty on enhanced value as similar issue awaiting finality at Jawaharlal Nehru Customs House (JNCH) and they will abide by the final outcome. Assessing authority rejected the declared value under Rule 12 read with Rule 3 of Customs Valuation Rules, 2007 and the Bills of Entry were provisionally assessed by enhancing the declared value. On appeal, vide order-in-appeal, the case was remanded to the original adjudicating authority for fresh adjudication. On such remand, the value was re-determined to $4.96 per liter under Rule 5 of Customs Valuation Rules, 2007. 


The division bench of Somesh Arora, Member (Judicial) and C L Mahar, Member (Technical) found that the case is of repeated remands therefore it seems that the original authority has not purposely followed the directions of the appellate authority leading to unnecessary litigation to the party. 

It was further found that no order of the proper officer has been passed within 15 days of assessing the Bills of Entry as the same was not accepted by the party and the release of goods procured under protest. Also, there is no order on record indicating the Rule 12 of Customs Valuation Rules, 2007 has been applied after rejecting the transaction value on the basis of enquiry and a reasoned order indicating that the materials were rejectable and on what ground alone the appeal is liable to succeed. 

The bench  observed that in identical facts, various benches of the Tribunal have ordered the same proposition in the case Italik Metalware Pvt. Limited vs. CC, Mundra and in the case of M/s. Sarda Energy and Minerals Limited vs. CCE, Raipur of firstly there being requirement of rejecting transaction value after inquiry and order. Therefore, in the absence of following such statutory requirement the show cause notice becomes unsustainable. The appellant therefore becomes eligible for relief. 

Case title: Vinod Medical Systems Pvt Limited V/S Commissioner Of Customs, Ahmedabad

Citation: CUSTOMS Appeal No. 10703 of 2021-DB

Amit Sharma

Author of Tax Concept

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