Customs, Excise and Gold Tribunal - Tamil Nadu
Omex International vs Cc (Import) on 18 April, 2007
Equivalent citations: 2007(119)ECC256, 2007ECR256(TRI.-CHENNAI), 2007(216)ELT248(TRI-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. The appellants had imported a consignment of 86 old/used photocopying machines and filed Bill of Entry dated 22.2.2006 for clearance of the goods, declaring the value of the goods to be US$ 39,550 (Rs. 17,70,775/-). The Commissioner, on the basis of a local Chartered Engineer's certificate as to age, residual life and value of the goods, enhanced the assessable value of the goods to Rs. 21,96,035/- under Rule 8 of the Customs Valuation Rules, 1988 and demanded duty accordingly from the appellants. The Commissioner also ordered confiscation of the goods under Section 111(d) of the Customs Act with option for redemption against payment of a fine of Rs. 5 lakhs. He also imposed a penalty of Rs. 2.2 lakhs on the importer under Section 112(a) of the Act.
2. In the present appeal, filed by the assessee, it is their main case that the transaction value was rejected without any reason relatable to Rule 4(2) of the Customs Valuation Rules. It is submitted that none of the reasons stated by the Commissioner has anything to do with Rule 4(2). It was not open to the authority to proceed to value the goods on the basis of Chartered Engineer's certificate or on any other ground without first rejecting the transaction value on valid ground. In support of this case of the appellants, ld. counsel relies on the Supreme Court's ruling in Eicher Tractors Ltd. v. Commissioner and the court's judgment in Tolin Rubbers Pvt. Ltd. v. Commissioner . Reliance is also placed on the decision of this Bench in Sri Venkatesh Enterprises v. Commissioner 2005 (103) ECC 22 (Tri.). In the light of the cited case, ld. counsel has also prayed for reduction of fine and penalty.
3. Ld. SDR submits that the facts of the present case are different from those considered by the apex court in the cases cited by counsel. It is submitted that the Commissioner rejected the transaction value under Rule 4(2)(a) and, therefore, it cannot be said that the rejection of transaction value was not in accordance with Rule 4(2). Ld. SDR has also contested the claim of the appellants for reduction of fine and penalty.
4. After giving careful consideration to the submissions, we are in agreement with the contention of the appellants the transaction value was rejected without stating any reason relatable to Rule 4(2) of the Customs Valuation Rules. The reasons stated by the Commissioner for rejecting the declared value are that (a) the goods were imported by a trader and not a manufacturer; (b) the goods, being used/secondhand, cannot be said to have been imported under fully competitive conditions due to its maintenance, upkeeping etc.; (c) importer did not produce any evidence to substantiate the declared value; and (d) independent/approved Chartered Engineer in India appraised the value of the goods at US$ 48,855 (C&F) as against the declared value of US$ 39,550 after inspecting the goods. We find that none of these reasons constitutes any of the exceptions laid down under the proviso to Rule 4(2) of the Customs Valuation Rules. Therefore, as rightly submitted by ld. counsel, rejection of the transaction value is against the mandate of law embodied in the judgments of the apex court. In the case of Etcher Tractors (supra), the value of the goods declared in the Bill of Entry was accepted under Section 14 of the Customs Act by the apex court after noting that none of the exceptions under Rule 4(2) was found to exist in that case. Their lordships applied the same ruling to a case of import of secondhand machinery in the case of Tolin Rubbers (supra). It is also pertinent to note that, in the latter case, a Chartered Engineer's valuation was the basis adopted by the Customs authorities for rejecting the declared value of the imported goods. The declared value was accepted by the court as there was no exceptional circumstance as laid down under Rule 4(2) in the said case for justifying the rejection of such value. In the case of Sri Venkatesh Enterprises (supra), this Bench followed the above decisions of the apex court and accepted the transaction value of the goods imported by the assessee. In the result, the valuation done by the Commissioner is set aside and it is directed that the declared value of the goods be accepted for the purpose of levy of duty thereon. Consequent upon this decision of ours, the redemption fine and penalty require to be reduced. The total declared value of the goods being Rs. 17,70,775/-, the quantum of redemption fine can appropriately be restricted to Rs. 2.5 lakhs (Rupees Two lakhs and fifty thousands only) and that of penalty to Rs. 85,000/-(Rupees Eighty five thousands only) respectively.
5. The impugned order will stand modified accordingly. The appeal is disposed of.
(Dictated and pronounced in open court)