2008 (10) TMI 533 - AT - Customs

Valuation - Customs - import of Second-hand photocopier machines - prohibited goods - Rule 8 of the Customs Valuation Rules - confiscation - penalty

Summary

Issues:
- Rejection of transaction value for second-hand photocopier machines
- Confiscation of used photocopier machines and imposition of fine and penalty

Analysis:
1. Rejection of Transaction Value:
The appeals involved the rejection of transaction value for second-hand photocopier machines and the subsequent re-determination under Rule 8 of the Customs Valuation Rules. The appellants challenged this based on the Supreme Court's ruling in M/s. Motor Industries Co. Ltd. v. Commissioner of Customs, which held that transaction value cannot be rejected without evidence of higher value imports. The appellants also cited precedents like Eicher Tractors Ltd. v. CC, Mumbai. The Tribunal, following the Apex Court's judgment, accepted the appellants' transaction value submission, as the revenue failed to provide better evidence.

2. Confiscation and Imposition of Fine and Penalty:
The second issue revolved around the confiscation of used photocopier machines and the imposition of fines and penalties. The appellants argued that during the relevant period, there was no prohibition on importing second-hand photocopier machines, thus no requirement for licenses. They relied on judgments like CC, Bangalore v. Srikrishna Printer and CC, Cochin v. Atual Commodities (P) Ltd. The Tribunal considered the Andhra Pradesh High Court's decision in CCE & CC, Hyderabad v. M/s. Balaji Office Equipments, which aligned with the Karnataka High Court's view that no license was needed for importing second-hand photocopiers. Consequently, the fines and penalties were set aside based on the lack of licensing requirements during the relevant period.

3. Valuation and Confiscation Justification:
The revenue's stance was based on valuation procedures and the requirement for licenses. They referenced cases like Gajra Bevel Gears v. Collector to support their position. However, the Tribunal, in light of the recent Supreme Court judgment in M/s. Motor Industries Co. Ltd., upheld the appellants' transaction value and rejected the revenue's reassessment. The Tribunal also emphasized that confiscation was not justified due to the absence of licensing requirements for importing second-hand photocopiers as capital goods during the relevant period.

4. Final Decision:
In conclusion, the Tribunal allowed the appellants' appeals, setting aside fines and penalties. The judgments of the Andhra Pradesh High Court and the Karnataka High Court were pivotal in determining the lack of licensing obligations for importing second-hand photocopiers during the relevant period. The Tribunal's decision aligned with the legal precedents and the recent Supreme Court ruling, emphasizing the acceptance of transaction value and rejecting the revenue's reassessment based on Rule 8 of the Customs Valuation Rules.