ORDER
S.S. Sekhon, Member (T)
1. These three appeals are taken up for disposal by this common Order as they arise out of a common impugned Order passed by the Commissioner (Appeals), Kolkata. Briefly stated the facts are that the assessees import completely pre-fumigated old and worn used clothing at a declared unit price of US $ 0.32 per kg. vide Bills of Entry filed. On the basis of an evidence of Bill of Entry No. 131242 in which the transaction value declared was US $ 1.05 per kg, the assessees were asked to explain as to why the unit price should not be enhanced to US
$ 1.05 per kg. In reply, by a letter dated 26-6-01, the assessees submitted that similar goods were regularly being assessed at US $ 0.45 per kg and the same was accepted by all Customs Houses.
2. The Commissioner (Appeals) after considering the matters found
as follows :-
“15. I have carefully gone through the records of the case, the grounds taken in the appeal petition and also the submissions made during the course of personal hearing.
16. The issue to be determined is whether it is justifiable to enhance the value of the impugned goods to US $ 1.05 per kg on the basis of an evidence of bill of entry No. 131242 in which the transaction value was declared by another importer of similar goods at US $ 1.05 per kg.
17. While analysing the evidence on record, I find that apart from the aforesaid bill of entry No. 131242, there is no other transaction covered by any other import bill of entry to suggest the value of similar goods as US $ 1.05 per kg. In other words, the basis of enhancement adopted by the lower authority is on a solitary evidence relating to the value of US $ 1.05 per kg shown in bill of entry No. 131242.
18. In this connection, the appellants have placed reliance on the decisions of the Hon’ble Supreme Court in the case of Basant Industries v. Addl. Collector of Customs reported in 1986 (81) E.L.T. 195 (S.C.) wherein it is held that mere comparison of invoices received by the importer with the invoices of same goods by other importers is not conclusive for determination of question of under-invoicing. It has further been held by the Apex Court that a stray instance of import at higher value cannot be adopted ignoring other attending circumstances.
19. In another case of Goodluck Industries v. Commissioner reported in 1999 (108) E.L.T. 818 (Tribunal) it was held that reliance placed by Commissioner (Appeals) on stray instance of importation is incorrect. These decisions appear to be squarely applicable to the facts of the present case.
20. On verification of the material on record, I find that the appellants’ contention that the lower authority has erroneously concluded that the supplier of the impugned goods and the goods covered by bill of entry No. 131242 on which reliance have been placed is the same. While the impugned goods have been imported from USA, and are of USA origin, the departmental evidence in the impugned order relates to Canadian origin. In any case, even assuming that the impugned goods were of Canadian origin, such solitary evidence cannot form the basis for enhancement of value as held by the Apex Court/Hon’ble CEGAT in the case laws cited at paras 18 & 19 hereinabove.
21. The contention of the appellants that the departmental relied upon bill of entry was filed on 19-6-2001 for the goods of Canadian origin; that the goods were shipped on 12-4-2001 from Melifax Port in Canada, and the said bill of entry was assessed on the same day, but the importer has not paid the duty till date, nor has taken delivery of the said goods covered by the bill of entry, raises a doubt regarding the bana fides of the said transaction. However, I would refrain from making any observation as there is no evidence on record to confirm the contention of the appellants. I would however, observe that the trade of import of used clothing is highly competitive and a sudden spurt in the value of a consignment of more than two times the import value is rather unrealistic. Moreover, the old and worn used clothing have no fixed value and each consignment is likely to have different grade of material; the age of used clothing is likely to vary, which would have a direct bearing on
the price pattern of each consignment and hence such non-standard consignments would not ordinarily be comparable. The contention of the lower authority that the importer has not contended anywhere that the goods are different or inferior in quality compared to the goods imported by M/s. Indomass Trades & Trans (P) Ltd. does not appear to be tenable, because, the appellants apparently would have no access to ascertain the nature of used clothing imported by M/s. Indomass Trades & Trans (P) Ltd.
22. I have also taken note of the contention of the appellants that valuation of similar/identical goods is being taken at US $ 0.45 per kg at Kolkata & Mumbai Custom House. In the case of imports noticed below US $ 0.45 per kg. the value are being enhanced to US $ 0.45 per kg for the purpose of assessment in Mumbai & Kolkata. In support of this contention, the appellants have placed on record the adjudication orders referred to at para 6,14 (c), (d), (e) & (f) hereinabove, wherein the values of similar/identical consignments have been enhanced to US $ 0.45 per kg.
23. The appellants have also indicated that in the case of M/s. Noble Enterprises, Kolkata, the Commissioner of Customs (Port), Kolkata vide order Kol/Cus/Port/SI. No. 23, dated 6-7-2001 has adopted the price of US $ 0.45 per kg for the purpose of assessable value for the clearance of such goods. In another order passed by the it. Commissioner of Customs, Kolkata (Order No. 62/2001), I find that the value for the purpose of assessment of similar/identical goods has been adopted at US $ 0.45 per kg. This order has been passed on 27-7-2001, that is, just a few days after the impugned orders have been passed by the lower authority. It has, therefore, been justifiably contended by the appellants that authorities cannot take different view at different time on identical set of facts and circumstances based on stray evidence of a solitary importation of similar goods at a higher price.
24. While passing the impugned order, the lower authority has rejected the declared value as per Rule 10A of the Valuation Rules, 1988 and ordered enhancement of the value from US $ 0.32 per kg to US $ 1.05 per kg under Rule 6 of Valuation Rules, 1988. The basis for rejection under Rule 10A and enhancement of the value to US $ 1.05 per kg under Rule 6 of the Valuation Rules, 1988 has been vehemently contested by the appellants. The appellants’ contention on this aspect has been reproduced at paras 7, 8 & 9. They have also relied on the Apex Court’s decision reported in 1998 (98) E.L.T. 3 (S.C.) Mirah Exports Pvt. Ltd. and another decision reported in 2000 (122) E.L.T. 321 (S.C.) Eicher Tractors Ltd. I find there is sufficient force in the contention of the appellants, particularly because the Customs has been adopting the value of US $ 0.45 per kg in respect of similar/identical consignments, and there seems to be no logical reason to enhance the value to US $ 1.05 per kg on the basis of a solitary bill of entry No. 131242, particularly when this evidence is not being applied to even subsequent adjudications of the original authorities as indicated in the preceding para (Para 23). The appellants have also referred to a decision of the Hon’ble High Court, Calcutta reported in 1990 (45) E.L.T. 24 (relevant paras 28 to 30), wherein the Hon’ble High Court have held that the value of a particular item accepted by the Customs authorities becomes a precedent and subsequently it cannot be held that valuation is not correct.
25 In the instant case, there is ample evidence on record to suggest that the Custom House has been adopting the value of US $ 0.45 per kg in respect of similar/identical goods for the purpose of assessment, and under the facts and circumstances of the present case, and by applying the ratio of the Apex Court in the case of Basant Industries v. Addl. Collector of Customs reported in 1996 (81) E.L.T. 195 (S.C) and Hon’ble CEGAT’s decision in the case of M/s.
Gooluck Industries v. Commissioner reported in 1999 (108) E.L.T. 818 (Tribunal), I hold that a stray evidence of bill of entry No. 131242 has no evidenciary value for the purpose of enhancement of value of such imports to US $ 1.05 per kg, and is hereby discarded as not tenable in the facts and circumstances discussed hereinabove.
26. It is observed that the appellants have declared the value of the impugned goods at US $ 0.32 per kg for the purpose of assessment. Prima facie this value is not acceptable, and hence, the value of the impugned goods would merit enhancement to US $ 0.45 per kg, on par with the practice being adopted by the Custom Houses as indicated in the preceding paras.
27. Accordingly, I hereby set aside the impugned order passed by the lower authority, and direct that the value of impugned goods be enhanced from US $ 0.32 per kg to US $ 0.45 per kg for the purpose assessment of the impugned consignments.”
2. The Revenue has filed these appeals on identical grounds which are-
(a) Fixation of value of the goods at US $ 1.05/kg CIF and its rejection under Rule 6 of CVR, 1988 was not correct as the burden of proof to reject the transaction value at US $ 0.32 to 0.35 under Rule 4 was discharged by the Revenue as the declared values were not accepted. (b) Once the declared value is rejected, the burden is shifted from the Department to the importers to establish the value and the Department is not barred from determining the fresh value. (c) The Commissioner (Appeals) has wrongly held that the lower authorities' observation that the importers have disputed that the goods imported by the assessees are different or inferior in quality compared to the goods imported by M/s. Indomass Traders & Trans (P) Ltd., is not correct as the adjudicating authority passed the Order based on the records and the submissions made before him prior to his adjudication. The submissions made by the assessees at the appellate stage may be given cognizance by the appellate authority in its Order. But for that, the Order passed by the lower authority cannot be treated as not correct in law and thereby, needs rectification. (d) The Commissioner of Customs (Appeals) in his impugned Order has held that the Commissioner of Customs (Port) in his Order No. KOL/CUS/PART/CL.23, dated 6-7-2001 had passed an adjudication order fixing value of similar goods at US $ 0.45/kg CIF. Deputy Commissioner of Customs, Gr. III, being a lower authority cannot pass an Order which is a deviation from the Order of the higher authority. This observation of the Commissioner (Appeals) is not legally correct and not due for appreciation of the fact that the adjudication order of Deputy Commissioner, Gr. III, dated 24-7-2001 was subsequent to the Order of Commissioner (Port), and based on evidence @ US $ 1.05/kg CIF of higher value brought into record before him which is also contemporary to the imports effected by the assessees. (e) The Revenue has relied on a decision in the case of Kirisons Electronic Systems Ltd. v. Collector of Customs, Calcutta reported in 1996 (87) E.L.T. 514, wherein it was held that where description of the goods under import is incomplete, reliance can be placed on comparable goods imported later when there is no evidence of significant price fluctuation. 3. We have heard both sides and considered the matter and find :- (a) The Deputy Commissioner on the following identical findings in three cases :-
“I have gone through all the case records and also the submissions made by the importer. The importer has not contended anywhere that their goods are different or inferior in quality to the goods imported by M/s. Indomass Traders and Trans (P) Ltd. They have also submitted that the supplier in both the cases are same. Thus, the goods in present case are same. Thus, the goods in present case and the goods in the case of M/s. Indomass Traders & Trans (P) Ltd. are very much comparable. Thereafter he has rejected the declared value as per Rule 10A of the Valuation Rules, 1988 and has ordered the enhancement of the value from the declared value to US $ 1.05 per kg under Rule 6 of the Valuation Rules, 1988.”
The Commissioner (Appeals) has set aside this determination after recording the plea before him –
(i) The invoices for the imports at US $ 1.05 per kg were not supplied to the other importers. (ii) Burden lies on the department to prove under valuation where imported goods are very different. (iii) Twice value cannot be regarded and no reason was arrived at by the Deputy Commissioner to reject the same.
(iv) Department relies on BE filed on 19-6-2001 for goods of Canadian Origin shipped on 12-4-2001 from Melifax Port in Canada on invoice dated 9-4-2001 for 17600 kgs in 265 bales. Importer had not paid the duty, and the imports in the present case were from Houston Port, USA and Bill of Entry have been filed on 17-5-2001 for shipment on 12-4-2001 and these relevant factors were not considered.
(v) Commissioner, Kolkata vide his order No. 23, dated 6-7-2001 has determined a value of US $ 0.45 and this price was the practice of assessment.
(vi) Reliance on routing import not good is held in 1999 (108) E.L.T. 818.
(vii) 1996 (87) E.L.T. 699 (T) = 1996 (16) RLT 135.
In view of these submissions before the Commissioner (Appeals), we find that the reasons adapted by the original authorities to arrive at Rule 6 value determinations are not permissible under the law. The same have been correctly not approved by the Id. Commissioner (Appeals).
(b) The Commissioner (Appeals), has in his order, analysed the submissions, after going through his findings arrived by him (extracted in extension herein) we find no grounds in the present appeal to interfere with the valuation as determined by him after giving full consideration to the facts of the imports and case law on the subject. (c) No material has been placed on the appeal before us to establish that the value of US $ 1.05 per kg is for the same commercial level of imports, which are from the same country; or that material exist to establish that adjustments as provided under Note 2 to Rule 5 of the Valuation Rules, which are to be applied, are not permitting any deduction from US $ 1.05 per kg. even if it is considered free import of identical goods. Similarly, there is no finding arrived at or grounds made out as to why Rule 5 and Rule 6 of the Valuation Rules do not prescribe the autometer acceptance of another Transaction Value, if the import value is not accepted as Transaction Value as mandated by Rule 5(3) and Rule 6(3) of the Valuation Rules when more than one Transaction Value of identical goods is being alleged i.e. US $ 0.32 to US $ 0.35 (as seen from grounds in appeal) then why the lowest thereof should not be the value under Rule 5(3) or 6(2). We find, therefore, no grounds to accept the highest price of US $ 1.05 in a solitary case, as noticed by the authorities, to be applicable as value in this case. 4. In view of our findings, these appeals are required to be dismissed for want of adequate material and grounds to upset the order of Commissioner (Appeals).