2006 (3) TMI 535 - AT - Customs

Summary

Issues:
Import of old and used photocopiers, printers, and fax machines; misdeclaration and undervaluation of goods; re-determination of assessable value by Commissioner; confiscation of goods; imposition of fine and penalty; appeal by the importer as a 100% Export Oriented Unit (EOU); argument regarding goods being covered by Letter of Permission (LOP); classification of goods as scrap equipment for recycling; dispute over misdeclaration and valuation; reliance on Chartered Engineer's certificate; challenge to Commissioner's decision on valuation.

Detailed Analysis:

1. Misdeclaration and Undervaluation:
The case involves the import of old and used photocopiers, printers, and fax machines by a 100% EOU, leading to suspected misdeclaration and undervaluation. The Commissioner rejected the transaction value due to the absence of manufacturer's invoice or Chartered Engineer's certificate. The goods were found misdeclared as mixed electronic scrap, leading to confiscation under Section 111(m) of the Customs Act, 1962.

2. Appeal by Importer as EOU:
The importer, as an EOU, argued that the imported goods were covered by an LOP issued by the Development Commissioner. They presented documents showing the goods as scrap equipment for recycling, emphasizing the agreement between Canon Singapore and Cimelia Singapore for recycling services. The importer contended that no duty was payable as an EOU, hence misdeclaration was unnecessary.

3. Valuation Dispute and Chartered Engineer's Certificate:
The Commissioner re-determined the assessable value based on the Chartered Engineer's certificate, classifying the goods for minor or extensive re-conditioning. The appeal challenged the basis of this classification, arguing that the certificate lacked reasoning. However, the Tribunal acknowledged the reliance on the certificate but highlighted the need for complete particulars for a proper valuation.

4. Decision and Order:
The Tribunal found merit in the importer's claim that the goods were legitimately declared as mixed electronic scrap, given the fast obsolescence of electronic equipment. Regarding valuation, the Tribunal approved the Commissioner's use of the depreciation method for assessing the value of second-hand machinery. The case was remanded to the Commissioner for a proper valuation based on a comprehensive Chartered Engineer's certificate.

5. Operative Order:
The Tribunal ordered a fresh decision on goods covered by the LOP, emphasizing cooperation from the appellant for expedited proceedings. The Commissioner was directed to conclude the case within three months of receiving the Tribunal's order for a revaluation of the impugned goods.

In conclusion, the judgment addresses issues of misdeclaration, valuation, and reliance on the Chartered Engineer's certificate in the context of import by a 100% EOU. The Tribunal's decision emphasizes the need for proper valuation procedures and complete documentation to ensure fair assessment of imported goods.