2004 (10) TMI 472 - AT - Customs

Valuation - Old and used photocopiers - Confiscation - Redemption fine - Import, licensing - Penalty

Summary

Issues Involved:
1. Valuation of imported old and used photocopier machines.
2. Allegation of gross undervaluation and evasion of customs duty.
3. Confiscation of goods under Sections 111(d) and 111(f) of the Customs Act.
4. Imposition of redemption fine and penalty.

Detailed Analysis:

1. Valuation of Imported Old and Used Photocopier Machines:
The appellants imported 132 units of old and used photocopier machines and declared a total value of Rs. 17,29,667/-. The Customs staff, after examination, found the goods to be old and used as declared. However, based on the report from DRI, Kolkata, the correct value was reassessed with a 20% loading, resulting in higher values than declared. The Commissioner of Customs increased the declared value to Rs. 21.05 lakhs based on this report. The Tribunal found that the report from DRI, Kolkata, was not shown to the appellants, making its reliance questionable. For valuation of second-hand goods, it is essential to compare identical parameters such as country of origin, model, make, and present condition. The Tribunal concluded that the valuation could not be upheld merely on the basis of the DRI report, as the goods were not inspected by the experts, and no findings on their condition, use, or depreciation were provided.

2. Allegation of Gross Undervaluation and Evasion of Customs Duty:
The appellants were accused of gross undervaluation with the intent of evading customs duty, based on the higher values suggested by the DRI report. The Tribunal found no reason to uphold the enhancement of valuation when actual sale prices were not on record. The liability to confiscation under Section 111(m) could not be upheld due to the lack of evidence supporting the undervaluation claim.

3. Confiscation of Goods Under Sections 111(d) and 111(f) of the Customs Act:
The Commissioner ordered the confiscation of the goods under Sections 111(d) and 111(f), offering redemption on payment of Rs. 6 lakhs and imposing a penalty of Rs. 1.20 lakhs. The Tribunal noted the appellants' reliance on a previous Tribunal Order (Nos. 563-564/2004-NB(A)) which held that photocopier machines were not consumer goods and set aside the confiscation of second-hand photocopier machines. Given the unsettled position, the Tribunal decided to give the benefit of the doubt to the importers and set aside the confiscation under Section 111(d).

4. Imposition of Redemption Fine and Penalty:
Since the confiscation under Sections 111(d) and 111(m) was not upheld, the penalty imposed under Section 112 was also deemed unnecessary and was set aside by the Tribunal.

Conclusion:
The Tribunal set aside the order of the Commissioner of Customs, concluding that the valuation enhancement and confiscation were not justified. The appeal was allowed, and the penalties were revoked.