2017 (6) TMI 842 - AT - Customs

Valuation of imported goods - used offset printing machines along with standard accessories - enhancement of value of the imported goods in terms of local Chartered Engineer opinion - Held that - local Chartered Engineer was not in possession of any additional information to decide the valuation. Virtually, he has not given any reference to the technical manual or information based on which value of the machines have been reassessed. In fact, the local Chartered Engineer has indicated the year of manufacture as 1984 as against 1975 by the Chartered Engineer at load port. Admittedly, 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 Customs Act, 1962 - redemption fine reduced to ₹ 1,00,000/- - penalty u/s 112 (a) reduced to ₹ 50,000/-. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Alleged under-valuation of imported goods.
2. Discrepancy between overseas and local Chartered Engineer certificates.
3. Confiscation of goods and imposition of penalty.

Analysis:
1. The appellant imported used offset printing machines and accessories, declaring a value of US $21400 (CIF). Customs authorities suspected under-valuation and had the goods examined by a local Chartered Engineer, who assessed the value at US$86,570 (CIF). The Commissioner ordered the value enhancement, demanding differential duty and imposing fines and penalties. The appellant contested the decision, arguing that the overseas Chartered Engineer certificate was valid and the local assessment arbitrary.

2. The appellant's advocate contended that the customs department lacked valid reasons to reject the overseas certificate, emphasizing that the local assessment was done without inspecting the goods. The advocate cited a Tribunal case precedent and Supreme Court approval, stating that one expert's opinion should not be dismissed without sufficient independent reason. In contrast, the respondent supported the impugned order, highlighting deficiencies in the overseas certificate and the need for customs authorities to consider various factors in valuation.

3. The Tribunal observed that the customs authorities disregarded the overseas Chartered Engineer certificate without valid reasons, solely relying on the local assessment. The local Chartered Engineer's assessment lacked additional information and reference to technical manuals, questioning the basis of reassessment. Relying on the precedent cited by the appellant, the Tribunal held that rejecting one expert's opinion for another without sufficient independent reason was not valid. Consequently, the declared value supported by the overseas Chartered Engineer certificate was deemed acceptable. Additionally, the goods, being over 10 years old, violated trade regulations, leading to confiscation and imposition of penalties. The Tribunal reduced the redemption fine and penalty considering the circumstances.

This judgment addresses the valuation discrepancy between overseas and local Chartered Engineer certificates, emphasizing the need for valid reasons to reject expert opinions. It also highlights the consequences of violating trade regulations, leading to confiscation and penalties. The decision provides clarity on the assessment process and the importance of following legal procedures in customs valuation disputes.