2004 (8) TMI 605 - AT - Customs

Summary

Issues:
- Appeal against enhancement of assessment value of imported goods
- Challenge against demand of duty and penalty

Analysis:
1. Enhancement of Assessment Value:
The appeal was filed by M/s. Goodyear South Asia Tyres Pvt. Ltd. against the enhancement of the assessment value of goods they imported, along with a challenge against the demand of duty and penalty. The appellant argued that the goods were imported from a subsidiary of M/s. Goodyear Tyre & Rubber Company, USA, and discrepancies were found by the Customs Authority regarding the year of manufacture. The Commissioner constituted a panel to inspect the goods, leading to an increase in the assessed value. The appellant contended that the goods were transferred at net book value as per the transfer policy within the Goodyear group of companies, and the transaction value should be accepted even for second-hand machinery. However, the Commissioner upheld the enhanced value, citing discrepancies in the year of manufacture for two machines.

2. Year of Manufacture Discrepancy:
The appellant argued that substantial reconditioning and refurbishing of the machines had taken place in 1998-2000, certifying the year of manufacture as 1998. The Commissioner, supported by the Senior Departmental Representative, maintained that reconditioning does not change the original year of manufacture, which was 1970 for the machines in question. The Tribunal agreed with this assessment, upholding the Commissioner's finding regarding the year of manufacture discrepancy.

3. Acceptance of Valuation:
The Senior Departmental Representative highlighted a letter from the appellant where they accepted the valuation arrived at during re-examination, conducted by a panel including Customs officials. The appellant's acceptance of the valuation was deemed voluntary, and the Tribunal upheld this agreement, stating that it precluded the appellant from challenging the value at the appeal stage. The Tribunal also noted that the appellant's letter did not indicate any coercion or duress, affirming the validity of the accepted valuation.

4. Penalty and Redemption Fine:
While upholding the enhancement of the assessed value, the Tribunal found the penalty and redemption fine imposed to be excessive. In the interest of justice, the Tribunal reduced the redemption fine from Rs. 90 lakhs to Rs. 25 lakhs and the penalty from Rs. 90 lakhs to Rs. 5 lakhs. The appeal was partially allowed, reflecting a reduction in the financial penalties imposed on the appellant.

In conclusion, the Tribunal upheld the enhancement of the assessment value based on the year of manufacture discrepancy and the appellant's voluntary acceptance of the valuation. The penalties imposed were reduced to ensure a fair outcome, balancing the interests of both parties involved in the dispute.