2017 (6) TMI 614 - AT - Customs

Valuation of imported goods - re-assessment of the value of the imported goods as well as confiscation thereof for violation of ITC regulations - the grievance of the appellant is that custom authorities have disregarded the load port Chartered Engineer certificate without valid reasons to reject the same - Held that - customs authorities have rejected the opinion of one expert simply on the basis of opinion by another expert - there is no other sufficient independent reason for such rejection. Such rejection has been held as not a valid basis for rejection of Chartered Engineer certificate. Confiscation - redemption fine - penalty - Held that - the imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the CA, 1962 - the importers are liable for imposition of penalty also u/s 112 (a) ibid - however, the quantum of redemption fine and penalty reduced. Appeal allowed - decided partly in favor of appellant.

Summary

Issues Involved:
1. Disregard of overseas Chartered Engineer certificate by customs authorities.
2. Rejection of declared value and reassessment by local Chartered Engineer.
3. Confiscation of imported goods for violation of ITC regulations.
4. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Analysis:

Issue 1: Disregard of overseas Chartered Engineer certificate
The appellant imported used offset printing and paper cutting machines along with accessories from Japan and declared a transaction value. The customs authorities disregarded the overseas Chartered Engineer certificate and reassessed the value based on a local Chartered Engineer's report, resulting in a significant increase. The appellant argued that the load port Chartered Engineer's certificate was valid, and the local assessment was arbitrary. The Tribunal noted that the rejection lacked sufficient independent reasons and followed precedent that one expert's opinion should not be rejected solely based on another expert's view without valid grounds. The Tribunal held that the load port Chartered Engineer certificate should be accepted, as no concrete evidence was presented to doubt its authenticity.

Issue 2: Rejection of declared value and reassessment
The local Chartered Engineer's assessment was challenged by the appellant, highlighting deficiencies in the certificate and lack of detailed information supporting the reassessed value. The Tribunal observed that the local Chartered Engineer did not provide substantial information or reference to determine the machines' year of manufacture accurately. Relying on the previous decision and Supreme Court approval, the Tribunal concluded that the reassessment based on the local Chartered Engineer's certificate was invalid, and the declared value supported by the load port Chartered Engineer certificate should be accepted.

Issue 3: Confiscation of imported goods
The imported goods were more than 10 years old, violating ITC regulations, making them liable for confiscation under Section 111(d) of the Customs Act, 1962. The Tribunal upheld the confiscation of goods due to the violation of Foreign Trade Act provisions.

Issue 4: Imposition of penalty
Considering the circumstances, the Tribunal reduced the redemption fine and penalty imposed on the importers under Section 112(a) of the Customs Act, 1962. The fine was reduced to ?50,000, and the penalty was reduced to ?25,000, acknowledging the facts of the case.

In conclusion, the appeal was partially allowed, emphasizing the acceptance of the declared value supported by the load port Chartered Engineer certificate and addressing the penalties imposed on the importers in light of the reduced fines and penalties.