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Issues: Valuation of imported second-hand photocopier machine, Confiscation under Section 111(d) of Customs Act, 1962
In this judgment by the Appellate Tribunal CESTAT, New Delhi, the common issue involved the valuation of an imported old and second-hand photocopier machine and the confiscation of the goods under Section 111(d) of the Customs Act, 1962. The appellants' declared price was disputed by the Customs authority, leading to examination by a Chartered Engineer. The adjudicating authority rejected both the appellant's declared price and the Chartered Engineer's certificate, opting to determine the price based on manufacturer value and depreciation principles, subsequently ordering the assessment and confiscation of the goods for violating the Foreign Trade Policy. Regarding the valuation issue, the appellant argued that the Tribunal had previously classified second-hand photocopier machines as capital goods, citing a specific case. The appellant maintained that the declared price was based on the supplier's invoice, but the Chartered Engineer's certificate indicated obsolescence and uncertainty regarding the year of manufacture. The Commissioner (Appeals) relied on manufacturer value without specifying its source, leading to the unsustainability of the order due to lack of clarity on the valuation methodology. Addressing the confiscation under Section 111(d) of the Customs Act, the Tribunal noted that the goods were confiscated on the basis of not being classified as capital goods, contrary to the Tribunal's decision in a previous case where photocopiers were deemed capital goods. As per the policy, second-hand capital goods were freely importable, rendering the confiscation unsustainable and subsequently set aside. In conclusion, the Tribunal found the valuation determination flawed as the Commissioner disregarded both the invoice value and the Chartered Engineer's assessment without providing clarity on the manufacturer value used or the depreciation method applied. Due to the absence of essential information regarding the manufacturer value and depreciation methodology, the valuation in the impugned order was deemed unsustainable, leading to the order being set aside and the appeals being allowed.
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