2009 (2) TMI 210 - AT - Customs

Valuation second hand goods import of photo copier - The value of the second hand goods is dependent upon its condition and value of one second hand goods cannot be blindly adopted for another second hand goods. Since the Department is not satisfied with the value determined by the Chartered Engineer we are of the view that the correct way to determine the value of the goods would be that the goods are re-examined by another Chartered Engineer appointed by the Department and value be determined in the light of the Chartered Engineer s report. Accordingly, while upholding the liability of the goods for confiscation and the liability of the appellant to penalty u/s 112(a), we remand the matter to the Commissioner for de novo adjudication for (a) re-determination of the value of the goods after getting the same re-examined in presence of the appellant or their representatives, by a Chartered Engineer appointed by the Department and (b) re-determination of the quantum of redemption fine and penalty.

Issues:
1. Import of old and used photocopier machines without an import license.
2. Correctness of declared value of the imported goods.
3. Classification of photocopier machines as capital goods or consumer goods.
4. Confiscation of goods under Section 111(d) of the Customs Act.
5. Penalty under Section 112(a) of the Customs Act.
6. Determination of the assessable value of the goods.

Analysis:

Issue 1: Import of old and used photocopier machines without an import license.
The appellant imported a consignment of old and used photocopier machines without an import license, which was deemed as restricted for import under para 2.17 of the 2004-09 Exim Policy. The Department alleged that the goods were liable for confiscation under Section 111(d) of the Customs Act and imposed a penalty under Section 112(a).

Issue 2: Correctness of declared value of the imported goods.
The declared value of the goods was contested by the Department, claiming that the value had been under-declared. The Department relied on NIDB data showing contemporaneous imports of similar photocopier machines at a higher value. The appellant argued that the declared value was correct based on the assessment by a Chartered Engineer.

Issue 3: Classification of photocopier machines as capital goods or consumer goods.
The classification of the photocopier machines as capital goods or consumer goods was debated. The appellant argued that second-hand photocopier machines are capital goods and freely importable, citing a Tribunal's Larger Bench judgment. However, the Department contended that photocopier machines are consumer goods and restricted for import, referring to judgments by the Hon'ble Kerala High Court and other Tribunal cases.

Issue 4: Confiscation of goods under Section 111(d) of the Customs Act.
The Commissioner ordered the confiscation of the goods under Section 111(d) of the Customs Act, providing an option for redemption on payment of a fine. The Tribunal upheld the confiscation based on the classification of the goods as old and used goods other than capital goods, thereby not freely importable.

Issue 5: Penalty under Section 112(a) of the Customs Act.
In addition to the confiscation, a penalty was imposed on the appellant under Section 112(a) of the Customs Act. The Tribunal upheld the liability of the appellant for the penalty based on the findings regarding the import of restricted goods without a proper license.

Issue 6: Determination of the assessable value of the goods.
The assessment of the value of the goods was disputed, with conflicting views between the Chartered Engineer's assessment and the Department's reliance on NIDB data. The Tribunal suggested re-examining the goods by another Chartered Engineer appointed by the Department to determine the value accurately, leading to a remand of the matter for de novo adjudication.

This detailed analysis covers the key issues addressed in the judgment delivered by the Appellate Tribunal CESTAT, New Delhi, providing a comprehensive overview of the legal arguments and decisions made in the case.

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