2011 (1) TMI 63 - AT - Customs

Penalty Valuation - value declared by the appellant corresponds to the value contained in the overseas chartered engineer certificate - no valid reason exists to reject the value estimated by the overseas chartered engineer basing reliance on the value estimated by local chartered engineer which itself was based on local market enquiry - order of the Commissioner set aside in enhancing the assessable value

Summary

Issues:
Appeal against Commissioner's order enhancing value of imported goods, confiscation for lack of import license, redemption fine, and penalty imposition.

Analysis:
The appellant imported various old and used items without a required license, leading to the confiscation of goods and imposition of a fine and penalty. The Commissioner enhanced the value of the goods, which the appellant contested. The appellant argued that the value enhancement was unjustified as the declared transaction value aligned with the overseas chartered engineer's certificate. The appellant highlighted discrepancies in the Commissioner's reliance on Valuation Directorate data without considering age, residual life, and physical condition of the goods. Citing relevant precedents, the appellant sought a reduction in the redemption fine and penalty due to the disputed value enhancement.

Upon review, the Tribunal found that the declared value matched the overseas chartered engineer's certificate, emphasizing that the local market value cannot dictate the assessment of imported goods. The Tribunal criticized the comparison of old and used goods with DOV data, noting the lack of consideration for crucial factors like age and condition. Relying on legal principles from prior cases, the Tribunal concluded that the Commissioner's rejection of the overseas chartered engineer's valuation lacked sufficient justification. Consequently, the Tribunal set aside the value enhancement and directed the use of the declared value for assessment purposes.

Regarding the confiscation of goods due to the absence of a required license, the Tribunal upheld the decision but reduced the redemption fine and penalty. Despite confirming the confiscation, the Tribunal acknowledged the accepted declared value, leading to a reduction in the redemption fine from Rs.5 lakhs to Rs.2.5 lakhs and the penalty from Rs.5 lakhs to Rs.2.5 lakhs. The appeal was disposed of with these adjustments in favor of the appellant.