9911796707
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Issues:
1. Determination of the value of imported machine for assessment. 2. Rejection of transaction value by the Commissioner. 3. Classification of the machine as second hand or brand new. 4. Justification for rejecting transaction value under Rule 4 of Valuation Rules. 5. Assessment of depreciation on a second hand machine. Issue 1: Determination of the value of imported machine for assessment: The appeal concerned the value determination of an imported machine, where the Commissioner confirmed the value at D.M. 4,00,000/- f.o.b. The Appellant imported a second-hand floor type horizontal boring machine and accessories, declaring a value of Rs. 43,48,329/- C.I.F. (DM 18000 FOB). The Commissioner rejected this value and determined it as D.M. 4,00,000/- based on evidence from an inter office memo indicating the original price of the machine. Issue 2: Rejection of transaction value by the Commissioner: The Commissioner rejected the transaction value of D.M. 1,80,000/- f.o.b., citing reasons that it was a distress sale and not in the course of normal international trade. Additionally, the Commissioner argued that the machine was brand new, not second hand as declared, and therefore, the original price of D.M. 4,00,000/- should be adopted for assessment purposes, rejecting the invoice value. Issue 3: Classification of the machine as second hand or brand new: The Appellant contended that the machine should be considered second hand as it was manufactured in 1993 and had been lying in a godown for four years before import. The Commissioner's rejection of the transaction value based on the machine being brand new was challenged, with the argument that any machine manufactured in 1993 and stored for years should be classified as second hand. Issue 4: Justification for rejecting transaction value under Rule 4 of Valuation Rules: The Appellant argued that the department had no valid reason to reject the transaction value and that none of the conditions under Rule 4 of the Customs Valuation Rules applied in their case. The rejection of the transaction value without proper cause was deemed unjustified, as per the principles established in the Eicher Tractors Ltd. case. Issue 5: Assessment of depreciation on a second hand machine: The department's decision to determine the value as D.M. 4,00,000/- based on an inter office memo was challenged by the Appellant. They argued that depreciation should be allowed on a second hand machine, contrary to the department's stance that no depreciation was applicable even when rejecting the transaction value. In conclusion, the Tribunal allowed the appeal, setting aside the Commissioner's order, as it was found that the rejection of the transaction value lacked sufficient cause and did not align with the provisions of Rule 4 of the Valuation Rules. The judgment emphasized the importance of satisfying specific conditions before rejecting transaction value and upheld the principle that transaction value can only be rejected under certain circumstances.
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