Custom, Excise & Service Tax Tribunal
M/S Kuber India vs Cc, Jaipur-I on 29 July, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing: 26.07.2016 Date of decision: 29/07/2016 For Approval and Signature: Honble Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Customs Appeal No. 487 of 2011 (Arising out of order-in-original No. 04/2011 dated 05.05.2011 passed by the Commissioner of Customs, Jaipur). M/s Kuber India Appellant Vs. CC, Jaipur-I Respondent
Appearance:
Shri Jatin Mahajan, Advocate for the for the appellant Shri Govind Dixit, DR for the Respondent Coram:
Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Member (Technical) Final Order No. 52670/2016 Per: B. Ravichandran:
The appeal is against the order dated 05.05.2011 of Commissioner of Customs, Jodhpur (Jaipur). The brief facts of the case are that the appellants have imported five old and used printing machines of Heildelberg make from Finland. The declared assessable value is Rs. 15,36,600/-. The Revenue entertained a view that the assessable value is not correct and accordingly initiated proceedings for enhancing and refixing the assessable value. The Commissioner vide the impugned order fixed the assessable value at Rs.50,75,000/-.
2. The appellants are contesting the impugned order mainly on the following grounds:
(a) All the printing machines were made in 1982 or thereabout. The import was made in 2010. They have submitted the inspection report of the Finland exporter of the machines. The goods were examined by the importer before shipment and the price was settled and paid through bank.
(b) These printing machines, though in good condition, are outdated and there is no set standards for fixing the value in the absence of the actual value at the time of manufacture.
(c) The department followed very arbitrary and vague calculations to arrive at a rough estimate of value which is against the principles laid-down under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The reliance placed on an alert issued in 2008 by DRI and certain informations taken from private commercial portals in internet cannot be a legal basis for arriving at the value.
3. Ld. DR supported the findings of the lower authority and stated that the exact year of manufacture of three machines were not available. Based on DRI alert and also certain information available in the internet, the original authority fixed the value in terms of Rule 9 of the Valuation Rules.
4. Heard both the sides and perused the records.
5. We have carefully considered the allegation made in the show cause notice and the findings of the original authority. In fact, the original authority in his finding simply recorded that the documents (invoice and bill of entry) submitted by the importer did not reflect the true value of the goods and hence could not be accepted as transaction value under Section 3. He concluded that Rule 9 which provides for residual method of valuation has to be applied to arrive at the reasonable value. He further recorded that in order to ascertain the contemporaneous import value of identical/ similar machines a search was made in internet and the value was accordingly fixed.
6. We find that the above reasoning and finding of the original authority is completely devoid of legal merit. First of all, the original authority did not record any reason for rejecting the invoice value. Apparently, he was guided by a general alert issued by the DRI in 2008 and also certain guidelines issued by the Board for assessment of used machinery vide Circular No. 4/2008-Cus. dated 12.02.2008. We find neither the alert nor the circular can substitute the legal provisions of Section 3 read with the Valuation Rules of 2007. Further, the lower authority invoked Rule 9 which talks about residual method of valuation. Here it has to be noted that the imported goods were very old and used. Atleast two machines are admittedly manufactured in 1982 i.e. before 28 years of import. The importer cannot be faulted for not producing the original price of the imported item at the time of their manufacture. It is not clear as to why the lower authority rejected the report given by the Chartered Engineer appointed by the department. The foreignsic test done also categorically stated that there is no tempering with any label of the machines. Inspite of all these facts the lower authority went ahead and did some search in internet and fixed the value for imported goods. We are not able to appreciate the legality of such decision. The Tribunal in Commissioner vs. B.C. Trading Company 2008 (223) ELT A133 (S.C.), in Commissioner of Customs vs. P.J. Network- 2012 (277) ELT 104 (Tri. Del.) and in Arrow Coated Products Ltd. vs. CC, Delhi 2008 (231) ELT 633 (Tri. Del.) held that value cannot be enhanced based on information taken from internet. There should be a clear finding about contemporaneous imports of identical or similar goods of comparable quality. Ld. DR relied on the Tribunal decision in Grand Metal Industries Pvt. Ltd. final Order Nos. 52569 52570/2015 dated 17.08.2015 and also in Vikas Spinners vs. CC, Lucknow 2001 (128) ELT 143 (Tri. Del.) to state that loaded value uncontested or voluntarily accepted and duty paid, cannot be agitated later by the importer. We find in the present case it is clearly recorded in the impugned order (para 18) that the importer did not accept the enhanced value of imported printing machines. It is an admitted fact that they have been contesting the valuation. The payment of duty and clearance of goods on enhanced value in order to avoid delay and demurrage cannot be held against the importer.
7. We find the impugned order is without merit and cannot be sustained. The same is set-aside, appeal is allowed.
(Pronounced on 29/07/2016).
(Justice (Dr.) Satish Chandra) President (B. Ravichandran) Member (Technical) Pant 4