CESTAT quashes customs duty demand on scrap imports for lack of evidence showing undervaluation or manipulation.
CESTAT Quashes Duty Demand on Scrap Imports
CESTAT Ahmedabad set aside a customs duty demand arising from 36 high-seas sale transactions involving imported scrap, holding that the Department failed to produce evidence of undervaluation or transaction manipulation. The valuation was challenged based on Normal Import Duty Benchmark (NIDB) data, but the appellant presented supporting invoices and shipping documents.
The Tribunal held that mere deviation from NIDB parameters does not justify reassessment; corroborative evidence of under-invoicing, buyer-seller relationship, or price suppression is necessary. In absence of such material, the original valuation was restored. The matter was remanded to verify documentary consistency in high seas sales, particularly transfer of title and payment terms.
This ruling reinforces evidentiary standards in customs valuation. Authorities cannot rely solely on statistical benchmarks without transaction-specific proof. Practitioners should challenge blanket demands based on NIDB discrepancies unless supported by concrete indicia of fraud. Proper documentation remains key.
