2007 (9) TMI 139 - AT - Customs

Import of Used Monitors & Photocopiers Transaction value cannot be re-fixed on basis of Chartered Engineer s Certificate if there is no proper reason to reject the same u/r 4(2) Custom Val. Rules Redemption fine penalty is imposable as license for import was not produced & goods were misdeclared

Summary

Issues Involved:
1. Mis-declaration of imported goods.
2. Requirement of licenses for importing second-hand photocopiers and monitors.
3. Rejection of transaction value and re-determination of assessable value.
4. Imposition of redemption fine and penalty.

Issue-wise Detailed Analysis:

1. Mis-declaration of Imported Goods:
The appellants imported used photocopiers and monitors, but discrepancies were found between the declared models and the actual models upon examination. For example, undeclared models like Olivetti 8041 and Selex GR3100 were found. The Customs authorities proceeded against the appellants due to these discrepancies. The Commissioner (Appeals) noted that the mis-declaration was a "technical lapse" and there was no evidence of intent to evade duty. The Tribunal upheld this view, noting that Revenue did not establish that the mis-declaration was intended to evade duty.

2. Requirement of Licenses for Importing Second-hand Photocopiers and Monitors:
The Customs authorities argued that licenses were required under the EXIM Policy for importing second-hand photocopiers and monitors. The appellants did not produce such licenses. However, based on the decision in M/s. Atul Commodities P. Ltd. v. CC, Cochin & Hyderabad, it was held that used photocopiers are 'Capital Goods' and do not require licenses under the EXIM Policy. Despite this, the monitors were held liable for confiscation due to the absence of licenses. The Tribunal upheld the fine and penalty for the monitors but not for the photocopiers.

3. Rejection of Transaction Value and Re-determination of Assessable Value:
The Customs authorities rejected the declared transaction value because the appellants did not produce the manufacturer's invoice or the year of manufacture. Instead, they relied on a Chartered Engineer's appraisal. The Tribunal emphasized that the burden is on the Revenue to justify the rejection of the transaction value under Rule 4(2) of the Customs Valuation Rules, 1988. The Tribunal found that the Revenue did not provide adequate grounds for rejecting the transaction value and cited several case laws, including Eicher Tractors Ltd. v. CC, Mumbai, to support accepting the declared value.

4. Imposition of Redemption Fine and Penalty:
The Original Authority imposed fines and penalties based on the re-determined assessable value. For the first appeal, a redemption fine of Rs. 1,00,000/- and a penalty of Rs. 35,000/- were imposed on the photocopiers, and a fine of Rs. 30,000/- and a penalty of Rs. 12,000/- on the monitors. The Commissioner (Appeals) reduced the fine for the photocopiers but upheld the fines and penalties for the monitors. The Tribunal upheld the fines and penalties for the monitors due to the licensing issue but set aside the re-determined values and fines for the photocopiers, accepting the declared transaction values.

Summary:
The Tribunal found that the Revenue did not provide sufficient grounds under Rule 4(2) of the Customs Valuation Rules to reject the transaction values declared by the appellants. The declared values for both the photocopiers and monitors were accepted. The fines and penalties imposed on the monitors were upheld due to the licensing requirement, but those imposed on the photocopiers were set aside. The appeals were partially allowed, with the declared values accepted and the fines and penalties for the monitors upheld.

Disposition:
1. OIA 63/2005: The re-fixation of assessable value is set aside, declared value accepted, fines and penalties for monitors upheld. Appeal C/388/2005 is partially allowed.
2. OIA 64/2005: The re-fixation of assessable value is set aside, declared value accepted. Appeal C/389/2005 is allowed with consequential relief.