2009 (3) TMI 845 - AT - Customs

EXIM - Old/used photocopiers - Valuation - Misdeclaration of value - enhancement of value - confiscation

Summary

Issues:
1. Free importability of old and used photocopiers.
2. Valuation of imported goods.

Issue 1: Free importability of old and used photocopiers
The common issues in the cases involved the free importability of old and used photocopiers and their valuation. The goods were held liable for confiscation under the Customs Act and the Foreign Trade (Development & Regulation) Act for import without a specific license and misdeclaration of value. The importers argued that the goods were freely importable based on a Supreme Court judgment in the case of M/s. Atul Commodity Pvt. Ltd. The Apex Court held that import of old and used photocopiers was not restricted before 19-10-05 and that Notification No. 31 dated 19-10-05 restricted imports only after that date. The Tribunal agreed with this interpretation, emphasizing that photocopying machines are capital goods and import of old and used photocopying machines falls under the concept of "second-hand capital goods." Consequently, the Tribunal set aside the finding of contravention of provisions of the Customs Act.

Issue 2: Valuation of imported goods
Regarding the contravention of misdeclaration of value under Section 111(m) of the Customs Act, the appellants provided a load port Chartered Engineer's certificate certifying the value of the imported goods. The adjudicating authority rejected this value, stating it was based on the US market valuation. However, the appellants explained that the goods were manufactured in different countries, including the USA. The Tribunal noted that the rejection of the load port Chartered Engineer's certificate without sufficient reason was not justifiable, citing previous judgments. The Tribunal also highlighted that there was no showing of falling within the special circumstances under the Customs Valuation Rules to reject the transaction value. Relying on various legal precedents, including decisions by the Apex Court and other Tribunals, the Tribunal held that the enhancement of the value of the imported goods could not be sustained and set it aside.

In conclusion, the Appellate Tribunal CESTAT, Chennai, ruled in favor of the appellants, holding that they did not contravene the provisions under Section 111(d) or (m) of the Customs Act. The impugned orders were set aside, and the appeals were allowed. The judgment was pronounced on 31-3-2009.