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2008 (10) TMI 219 - AT - CustomsConcurrent Jurisdiction Powers Manner of Investigation - Valuation of imported items Held that - As both the Commissioners have concurrent jurisdiction the Commissioner of Customs (Preventive) has jurisdiction to adjudicate upon the pending bill of entry - Since evidences have been disclosed to the noticees it can not be said that the adjudicating authority went beyond his role and involved himself in investigation - Department has issued the show cause notice with right to issue addendum. when the evidence have been received in overseas investigation the same have been made available to the notice there is nothing wrong in it Document received through diplomatic channel even if they are in the form of a message cannot be ignored and can be admitted as evidence - the value relating the two other types of software mentioned in the proforma invoice shall not includable whether the same was imported along with the terminals at Delhi or separately imported at Chennai. - The classification of computer hardware under heading 8479.9090 is upheld.
Issues Involved:
1. Jurisdiction of the Commissioner of Customs (Preventive) to adjudicate the pending bill of entry. 2. Validity of the enhancement of the value of the consignment. 3. Classification of the imported goods. 4. Inclusion of software value in the assessable value of hardware. 5. Procedural fairness and adherence to principles of natural justice. Issue-wise Detailed Analysis: 1. Jurisdiction of the Commissioner of Customs (Preventive): The appellant argued that only the Commissioner of Customs (Import and General) had jurisdiction over the pending bill of entry, not the Commissioner of Customs (Preventive). The Tribunal found that both Commissioners had concurrent jurisdiction over the National Capital Territory of Delhi and the NOIDA Special Economic Zone as per Notification 2/2002 of Customs (NT) dated 7-3-2002. Therefore, the Commissioner of Customs (Preventive) was competent to adjudicate the matter. 2. Validity of the Enhancement of the Consignment Value: The appellant contested the enhancement of the consignment value from 5,50,000 Euros to 17,90,000 Euros based on an invoice issued to their supplier by a third party. The Tribunal considered the supply agreement and proforma invoice, which indicated a total value of 21,50,000 Euros, including hardware and software. The Tribunal concluded that the value of 400 Euros per terminal for specially written software should be included in the assessable value. However, it upheld the enhancement only to the extent of 9,50,000 Euros, rejecting the Department's valuation of 17,90,000 Euros. 3. Classification of the Imported Goods: The appellant claimed classification under subheading 8471.3039 for data processing machines, while the Department classified the goods under heading 8479.9090 for machines with individual functions. The Tribunal upheld the Department's classification, noting that the point of sale terminals were specialized systems for lottery automation, performing specific functions other than data processing, as per Section Note 5(E) of Chapter 84. 4. Inclusion of Software Value in the Assessable Value of Hardware: The appellant argued that the software was imported separately and should not be included in the hardware's assessable value. The Tribunal found that the software was integral to the terminals and included in the supply agreement and proforma invoice. However, it referred to the Supreme Court's decision in P.S. Data Systems Ltd. v. C.C.E., which held that software sold with computers should not be included in the assessable value of computers for excise duty purposes. Thus, the Tribunal excluded the value of two other types of software from the assessable value. 5. Procedural Fairness and Adherence to Principles of Natural Justice: The appellant raised concerns about the impartiality of the adjudicating authority and the issuance of an addendum to the show cause notice after the personal hearing. The Tribunal found that the Commissioner acted within his quasi-judicial capacity, appropriately disclosing evidence and allowing the appellant to respond. The Tribunal also held that documents obtained through diplomatic channels could be admitted as evidence, even if unsigned and unattested. Conclusion: 1. The classification under heading 8479.9090 is upheld. 2. The enhancement of the consignment value is upheld to the extent of 9,50,000 Euros. 3. The demand for differential duty shall be recalculated based on the revised value. 4. The redemption fine is reduced from Rs. 25 lakhs to Rs. 10 lakhs. 5. The penalty is reduced from Rs. 1 crore to Rs. 10 lakhs. (Pronounced in the Court on 23-10-2008)
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