Customs, Excise and Gold Tribunal - Bangalore
Sharp Business Machines (P) Ltd. vs Commissioner Of Customs on 2 December, 1996
Equivalent citations: 1997(71)ECR149(TRI.-BANGALORE)
ORDER T.P. Nambiar, Member (J)
1. In the present case, the appellants had filed the BE for clearance of 85 numbers of goods described as re-conditioned parts of plain photocopiers.
2. In terms of the impugned order, the consignment in total was valued at Rs. 15,46,314. But the appellants had declared the value of the goods as Rs. 5,73,242. The goods in question were also confiscated and the appellant was allowed redemption on payment of a redemption fine of Rs. 3.00 lacs and a penalty of Rs. 50,000 was imposed on the appellant.
3. The learned Consultant contended before us that the value adopted on the basis of the whole photocopier as was done by the adjudicating authority is not warranted in the facts and circumstances of the case. In this connection, he drew our attention to the final paragraph of the impugned order which is as follows :
As regards the licensing angle, the importers have produced two SILS which are valid for the goods listed in Appendix XXXV of the handbook of procedures of Export-Import Policy AM 92-97. The licences are as valid for import of re-conditioned components of plain photocopier, which is an item described under Section 31 of the said appendix. In this case, though for the purpose of assessment in terms of application of Rule 2(a) of the Interpretation Rules, goods are to be considered as plain photocopier per se, as far as the licence aspect is concerned, it would be in conformity with the policy to cover them under the said sl. no. of Appendix XXXV as reconditioned components of plain photocopier. As such, as far as the Exim policy is concerned, the goods can be cleared after debiting the two licences produced.
Relying on the above said observations, he pointed out that the adjudicating authority had treated the goods as covered under the licence and he has also accepted that these are reconditioned components. When the reconditioned parts are available they are to be valued as such and in this connection, he drew our attention to the valuation made by M/s. Ashwini Graphics who had been brought in by the deptt. itself as an expert. He pointed out that nothing is mentioned in the impugned order with respect to this expert opinion regarding valuation and if the deptt. wants to enhance the value then the value should be enhanced on the basis of this expert opinion rather than valuing the same on the basis of the full machine. He also pointed out that in the facts and circumstance of the case, there are no mala fides and the confiscation as well as the penalty is also not in order.
4. The learned SDR drew our attention to the penultimate paragraph of the impugned order. In this connection, he pointed out that with respect to canon plain photocopier as well as other copiers the deptt. had obtained the price from the Singapore supplier. This basis was taken into consideration by the adjudicating authority. The adjudicating authority has also given a depreciation of 70% and he has also allowed 25% for the quantities of the components which were not actually imported. Therefore, he stated that the above said valuation made by the adjudicating authority is in order. He prayed that the appeal may be dismissed. However, he pointed out that in the declaration also it was only described as part of the plain paper copier. But what was imported was reconditioned components of main frame assembly.
5. We have considered the submissions. As already reproduced above from the orders of the adjudicating authority at para 4, it is very clear that the licence was considered as valid for import of the reconditioned components of plain photocopiers. Therefore, once when the licence has already been accepted and when the goods have already been treated as components of photocopier, the question of valuation of the same on the basis of the price of the full copier is not permissible and more particularly in view of the expert opinion which the deptt. itself had obtained from M/s. Ashwin Graphics. The expert have also stated that these are components. The relevant portion of the above report is as follows:
1. The imported materials which was inspected by me is fully reconditioned component of main frame assembly.
2. The models which was inspected by me is as under:
Inspected Copier Models Missing Components Main Frame Assembly _________________________________________________________________________________ Savin 870/5200 - B4 size Main PCB, Operation Control PCB, to size copier Complete Cosmetics, Cassettes A4 & B4, Receiving Tray, Platen Glass & Cover, Developer Unit.
Savin 5030 - A3 Size As above
copier
Canon/Mita/305/350/213 As above 4 Fuser Unit
Except 305 other copiers are black and white copiers and 305 is only a mono colour copier if the single colon developer unit is replaced to form mono colour copies.
Complete cover of machine
Approximate value as is wherein condition
B4 size - Rs. 10,000/- to Rs 15,000/-
A3 size - Rs. 15,000/- to 20,000/-
Value of second-hand machine for B4 size is Rs. 20,000/- to Rs. 25,0007-and for A3 size A3 size, Rs. 30,000/- to Rs. 35,000/-, depending on the condition of the copier.
Approximate value of reconditioned copier complete B4 size is Rs. 40,000/-to Rs. 45,0007- and for A3 size Rs. 50,000/- to Rs. 53,000/-
The materials inspected are used to an extent of 3 to 4 lakhs copies. Nature of used component to the extent of 3 to 4 lakhs copies on random piece checking.
A perusal of this clearly goes to show that the imported mechanism were inspected by the expert and he found that these are only parts. He has also valued these components which are imported by the appellants and the price of B4 size is Rs. 10,000 to 15,000 and the price of A3 size is Rs. 15,000 to 20,000. Therefore, when this expert evidence is available on record and when it is admitted that what is imported by the appellant is nothing but the reconditioned components of photocopiers, then in our view the valuation should have been done on the basis of the value given by the expert in this regard. This is the only market enquiry made by the deptt. and no reasons are furnished to brush aside this report which the deptt. itself has obtained in this case. Therefore, on that basis the valuation is to be made taking the lower price of Rs. 10,000 for B4 and Rs. 15,000 for A3 size. It is thus clear that for 48 components of B4 size the value will be Rs. 4,80,000. For 37 components of A3 size at the rate of Rs. 15,000 the value will be Rs. 5,55,000.
6. At this juncture, the learned SDR pointed out that in A3 size five monos are colour type files. In that view of the matter, we are of the view that the value of these five can be taken at the higher price of Rs. 20,000 and if that is taken the value will be Rs. 1.00 lac (Rupees one lac). The value of the rest 32 of A3 size at the rate of Rs. 15,000 per component will be Rs. 4,80,000. Hence, the total value of A3 size will come to Rs. 5,80,000 (Rupees five lac eighty thousand). Thus, the total value of both B4 and A3 size comes to Rs. 10.60 lacs (Rupees ten lacs sixty thousand) and the appellant will have to pay duty based on the above valuation. We order accordingly.
7. As far as the confiscation of the goods is concerned, it is now very clear that the licence has been accepted by the deptt. in the facts and circumstances of the case and since these are second-hand reconditioned components, no mala fides can be attributed to the appellants. In the absence of any such mala fides and when the appellant has clearly come forward accepting the valuation made by the experts and when the deptt. had taken the valuation from this expert, and in these circumstances, we are of the view that confiscation of the goods as well as the imposition of penalty is not sustainable. These are the principles laid down by the Supreme Court in the case of Akbar Badruddin Jiwani v. CCE . Accordingly, we set aside the order of confiscation and imposition of penalty. The appeal is disposed of in the above terms. The appellant is liable to pay duty on the enhanced value of goods.
(Pronounced and dictated in open Court)