2016 (12) TMI 1158 - AT - Customs

Valuation - enhancement of value - Mis-declaration of quantity of goods - import of 46 units of old and used cannon photocopier machines - Held that - As regard the enhancement of value done by the adjudicating authority, we find that sole basis for enhancement of value is based on the value suggested by DRI which relates to some other investigation. It is also observed that the Adjudicating authority accepted the price suggested by the DRI but did not bother to call for the basic evidence from where the DRI has obtained the price. Therefore price suggested by the DRI should not have been applied for enhancement of the impugned goods. Moreover goods imported is a second hand photocopier. Every second hand goods varies from each other depending upon the duration of use, manner of use and condition of the machine therefore price of one second hand goods cannot be applied to other second hand goods without ascertaining the physical parameter of both the machine - enhancement of the value is arbitrary and without any basis hence the same is not sustainable. As regard the issue of mis-declaration of the quantity of the goods, we find that though in some of the model, quantity declared and the actual quantity are different but total quantity of the photocopier imported and declared by the importer are matching i.e. 46 number of photocopiers. We also find that in the discrepancy of the quantity in one model, it was observed that value declared in both the case is same therefore it cannot be said that appellant has intentionally mis-declared the quantity of goods. The photocopier is capital goods and importable freely therefore there is no violation of provision of policy - the enhancement of value and mis-declaration held by the lower authorities are not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Enhanced valuation of imported photocopier machines
2. Allegation of mis-declaration of quantity and country of origin
3. Requirement of license for import of second-hand goods

Enhanced Valuation of Imported Photocopier Machines:
The appellant imported 46 units of old and used cannon photocopier machines, which were intercepted by SIIB officers due to mis-declaration of quantity and country of origin. The examination revealed discrepancies in the declared value as well. The DRI suggested a valuation based on identical goods from a different investigation, leading to an enhanced value assessment. The appellant contested this valuation, arguing that each second-hand machine varies in condition and use, making the comparison invalid. The tribunal agreed, stating that the enhancement was arbitrary and lacked a proper basis, as physical parameters of each machine should be considered for valuation.

Mis-declaration of Quantity and Country of Origin:
While discrepancies in the quantity declaration were noted for some models of machines, the total number of imported photocopiers matched the declared quantity of 46 units. The tribunal found that the minor discrepancies did not affect the overall valuation or duty calculation, especially since the value of the machines remained consistent. It was concluded that there was no intentional mis-declaration of quantity by the appellant.

Requirement of License for Import of Second-Hand Goods:
The lower authorities contended that second-hand photocopiers required a license for import under the Export and Import Policy. However, the appellant argued that second-hand capital goods, including photocopiers, are freely importable under the policy. Citing a Supreme Court judgment, the tribunal agreed that second-hand capital goods are exempt from such restrictions, as they fall under the category of freely importable items. Therefore, the tribunal ruled that the allegation of mis-declaration and the requirement of a license were not valid, setting aside the impugned order and allowing the appeal.

This detailed analysis of the judgment highlights the issues of enhanced valuation, mis-declaration, and licensing requirements for the import of second-hand goods, providing a comprehensive overview of the tribunal's decision and the legal arguments presented by both parties.