2017 (7) TMI 185 - AT - Customs

Valuation - imported used offset printing machines along with standard accessories - 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 - 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 of offset printing machine different to that of Chartered Engineer at load port in respect of one or two machines - customs authorities have rejected the opinion of one expert simply on the basis of opinion by another expert. We note that there is no other sufficient independent reason for such rejection. 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 - the importers are liable for imposition of penalty also under Section 112 (a) ibid - however, redemption fine reduced to ₹ 75,000/- and penalty to ₹ 40,000/- - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Disregarding overseas Chartered Engineer certificate and revaluation of imported goods.
2. Confiscation and redemption of goods for violation of ITC regulations.
3. Validity of local Chartered Engineer certificate in determining the value of imported goods.
4. Application of Foreign Trade (Development and Regulation) Act, 1992 on imported goods.

Issue 1: Disregarding overseas Chartered Engineer certificate and revaluation of imported goods:
The appellant imported used offset printing machines and accessories, declaring a value of US$ 16000. Customs authorities, suspecting undervaluation, had the goods examined locally, resulting in a reassessment at USD 54560. The Commissioner ordered the enhancement of value, demanding differential duty and confiscating the goods. The appellant contended that the overseas Chartered Engineer certificate was valid and the local assessment was arbitrary without inspecting the goods. The Tribunal noted that the rejection of the overseas certificate lacked sufficient independent reasons, following precedent that one expert's opinion cannot be rejected solely based on another expert's view without valid grounds. Consequently, the declared value supported by the original Chartered Engineer certificate was accepted.

Issue 2: Confiscation and redemption of goods for violation of ITC regulations:
The imported goods, being over 10 years old, violated Foreign Trade (Development and Regulation) Act, 1992, making them liable for confiscation under Section 111 (d) of the Customs Act, 1962. Additionally, the importers faced penalties under Section 112 (a) of the Customs Act. The Tribunal reduced the redemption fine and penalty considering the circumstances of the case.

Issue 3: Validity of local Chartered Engineer certificate in determining the value of imported goods:
The Tribunal found that the local Chartered Engineer's reassessment lacked additional information or references for valuation, differing from the load port Chartered Engineer on the year of manufacture for some machines. Relying on legal precedent, the Tribunal held that rejection based solely on another expert's opinion without sufficient independent reasons was invalid. Therefore, the reassessment based on the local certificate was deemed invalid, and the declared value supported by the original Chartered Engineer certificate was upheld.

Issue 4: Application of Foreign Trade (Development and Regulation) Act, 1992 on imported goods:
The Tribunal confirmed the violation of the Foreign Trade (Development and Regulation) Act, 1992, due to the age of the imported goods, leading to their confiscation under relevant customs regulations. The importers were also subjected to penalties as per the Customs Act. Considering the case specifics, the Tribunal reduced the redemption fine and penalty amounts.

This judgment addressed the challenges related to the valuation of imported goods, the acceptance of Chartered Engineer certificates, compliance with ITC regulations, and the imposition of penalties under relevant trade laws. The Tribunal emphasized the importance of valid reasons for disregarding expert opinions and upheld the declared value supported by the original Chartered Engineer certificate. Additionally, the Tribunal highlighted the consequences of violating trade regulations, leading to the confiscation of goods and imposition of penalties. The decision provided clarity on the assessment process for imported goods and the legal implications of non-compliance with trade laws.