2024 (12) TMI 298 - AT - Customs

Rejection of appeal - rejection of first check and subsequent show cause notice for mis-declaration of imported goods - mis-declaration of goods - Section 46 of Customs Act - HELD THAT - It is a fact that department did not challenge that order but at the same time did not implement the order of the Ld. Commissioner and instead issued the impugned show cause notice dated 18.04.2011 alleging mis-declaration of the goods imported vide Bill of Entry 2123393 dated 28.07.2010. After obtaining the report of the Charter Engineer the Original Authority confirmed the demand of custom duty of Rs. 4,62,818/- on re-determined value of Rs. 19,90,591/- under Section 28 of the Customs Act, 1962 along with interest. Further, the order of the Original Authority was confirmed by the Commissioner (Appeals) vide the impugned order. It is found that the chartered Engineer in his report dated 16.10.2010 has opined that machines do not appear to be reconditioned and appears to have been lifted on as is where is basis and machines were 20-50 years old and expected residual life is more than 8 years and further he has opined that the value of the new machines is approximately Rs. 53,55,000/- and on that basis seizure value has been taken as 16,06,500/- after allowing 70% depreciation on the machinery as per Board circular no. 07/2008 Custom dated 12.02.2008. Further the Chartered Engineer has not disclosed the basis of opining value of impugned goods and there is no reference to any technical manual or information based on which he has determined the value of the machines. The Original authority is directed to assess the goods as scrap after effective mutilation under custom supervision at appellant s cost - The appeal is accordingly allowed.

Summary

Issues:
1. Appeal against rejection of first check and subsequent show cause notice for mis-declaration of imported goods.
2. Discrepancy in valuation of imported goods and imposition of customs duty, interest, and penalties.
3. Compliance with previous orders regarding similar consignments being classified as scrap.

Analysis:

Issue 1:
The appellant imported HMS Scrap from Canada and requested a first check, which was initially denied but later directed by the Commissioner (Appeals). However, a show cause notice was issued alleging mis-declaration of goods. The appellant argued that the goods were purchased on "as is where is basis" and should be considered scrap. The Chartered Engineer's report supported the appellant's claim, emphasizing the age and condition of the machinery.

Issue 2:
The valuation of the imported goods was disputed, leading to the imposition of customs duty, interest, and penalties. The Chartered Engineer's valuation was questioned for lack of disclosure on the basis of determination. The appellant argued that the valuation was arbitrary and not in line with Customs Valuation Rules. Previous import cases and expert opinions were cited to support the appellant's claim for revaluation.

Issue 3:
The appellant's previous consignment of similar goods was classified as scrap after legal proceedings and appeals. The Commissioner (Appeals) directed the release of goods as scrap after mutilation, a decision upheld by CESTAT. The Tribunal emphasized that the Department cannot take contrary stands on the same issue for the same assessee, citing legal precedents.

In the final judgment, the Tribunal allowed the appeal, directing the Original Authority to assess the goods as scrap after mutilation under custom supervision at the appellant's cost, in line with previous decisions and legal principles. The judgment highlighted consistency in treatment of similar consignments and the importance of adhering to previous orders in similar cases.