2018 (4) TMI 1253 - AT - Customs

Valuation of imported goods - Used Power Press, Johns, APRX 100 MT Elec/Hyd Operation, Remote Hyd Power pack, Rotating 1100 MM Die Auto INDX (Complete Set) - purchase through e-auction - rejection of declared value - It appeared to the Custom House that the price of the machinery when worked out per ton basis was much than the price per ton of Heavy Melting Scrap imported from Australia during that period which was in the vicinity of AUD 400/ton. Held that - there are no details in the e-auction invoice of the age, year of manufacture or other serial / identification numbers that would normally be expected to be made available for such machinery. Even gross weight of the machinery is not indicated in the invoice, though, from the inspection report of the Chartered Engineer, it emerges that the gross weight is as much as 27500.00 kgs. In the absence of such particulars, the Customs authorities cannot be faulted for not having accepted the transaction value. The fact that the declared value of the goods was much lower than per/ton value of industrial scrap imported from the same country, though not an approved method for arriving at the transaction value, is nonetheless an indicator of the grossly low value of the imported goods as declared - transaction value cannot be accepted - appeal dismissed - decided against appellant.

Summary

Issues: Customs valuation of imported used machinery

Analysis:
1. Facts of the Case: The appellant imported used machinery declared as "Used Power Press" without proper documentation regarding its age, model, and reconditioning. The Customs House rejected the declared value and re-determined it based on a local Chartered Engineer's valuation.

2. Appellant's Arguments: The appellant argued that the e-auction price should be considered the transaction value, emphasizing that the Customs authorities had no legal basis to reject it. They also contested the valuation by the Chartered Engineer as inflated and provided data on similar machines imported at lower values.

3. Respondent's Arguments: The Respondent presented the Chartered Engineer's inspection report to justify the valuation and highlighted the detailed reasoning provided by the original authority for rejecting the declared value.

4. Court's Decision: The tribunal analyzed the e-auction invoice and the inspection report, noting the lack of essential details like age and weight of the machinery. They upheld the revaluation based on the Chartered Engineer's assessment, which aligned closely with the deduced value of the machinery. The tribunal also considered the discrepancy between the declared value and the industrial scrap import prices, indicating undervaluation. Consequently, the appeal was dismissed for lack of merit.

This judgment primarily revolves around the Customs valuation of imported used machinery, focusing on the rejection of declared value, reliance on a local Chartered Engineer's assessment, and the comparison with market prices to determine the appropriate valuation for customs purposes. The tribunal emphasized the importance of providing accurate details and justifying the declared value to avoid undervaluation of imported goods.