2017 (9) TMI 1503 - AT - Customs

Valuation of imported goods - old and used mainframe assemblies and parts/components of photocopiers - enhancement of value on the basis of second Chartered Engineer s certificate - whether the enhancement confirmed by the Commissioner on the basis of the second Chartered Engineer would sustain or not? - Held that - there is inordinate delay in conducting inspection and also filing of the report - Even if the date of inspection is taken as 30.4.2003, as contended by the learned AR, the report is filed by the second Chartered Engineer after inspection of goods with much delay which is 18.8.2004. This is already after obtaining the report of first Chartered Engineer. When the department has not given cogent reasons for rejecting the enhancement/valuation made by the first Chartered Engineer and when there is so much delay in inspection as well as report of the second Chartered Engineer, we have to hesitate to accept the enhancement made on the basis of such report of the second Chartered Engineer - the enhancement on the basis of the second Chartered Engineer s certificate is not legal or proper. The appellant is liable to pay duty on the enhanced value on the basis of the report of the, first Chartered Engineer - Further, since the goods were not restricted items during the relevant time of import, we find that the redemption fine and penalties are unwarranted and requires to be set aside - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Import of old and used mainframe assemblies and photocopier parts, valuation discrepancy by Chartered Engineers, release of goods, enhancement of value, imposition of redemption fine and penalty.

Analysis:
1. Valuation Discrepancy:
The appellant imported goods with a declared value of USD 8010, which were found to be used photocopiers of Canon brand. The first Chartered Engineer valued the goods at USD 12,140. Subsequently, a second Chartered Engineer assessed the value at USD 48,412.50. The appellant argued that the second valuation was issued without proper inspection and with significant delay, casting doubt on its validity.

2. Release of Goods:
Following a court order, the goods were provisionally released to the appellants based on the valuation of USD 12,140 by the first Chartered Engineer. However, a show cause notice was later issued proposing an increase in value to USD 48,412.50, leading to the confiscation of goods and imposition of fines and penalties.

3. Legal Dispute:
The appellant contested the validity of the second Chartered Engineer's valuation, citing delays in inspection and report submission. The department defended the enhanced valuation, claiming proper inspection and justification for the discrepancy in dates mentioned in the report.

4. Tribunal's Decision:
The Tribunal noted discrepancies in the second Chartered Engineer's report, including delays in inspection and issuance. It concluded that the enhancement based on the second valuation was not justified. The Tribunal upheld the duty payment based on the first Chartered Engineer's valuation but set aside the redemption fine and penalties, deeming them unwarranted.

5. Outcome:
The Tribunal partially allowed the appeals, modifying the order to require duty payment based on the first Chartered Engineer's valuation. It also revoked the redemption fine and penalties imposed on the appellants, considering the goods were not restricted items during the import period.

This detailed analysis highlights the key issues of valuation discrepancies, release of goods, legal disputes, and the Tribunal's decision, providing a comprehensive overview of the judgment.