1992 (5) TMI 112 - AT - Customs

Summary

Issues Involved:
1. Valuation of imported goods.
2. Applicability of Open General License (OGL).
3. Imposition of penalty.
4. Issuance of a detention certificate.

Detailed Analysis:

1. Valuation of Imported Goods:
The appellants imported GPZ brand bearings valued at Rs. 7,50,000/- c.i.f., declaring a value of Rs. 50,000/- per piece. However, the Custom House obtained a price list indicating a value of Rs. 1,79,631.76 per piece, leading to allegations of under-valuation and duty evasion. The Collector of Customs, Bombay, enhanced the value to Rs. 1,79,631.76 per piece and imposed a fine but did not levy a penalty under Section 112 of the Customs Act.

Upon remand, the Collector upheld the enhanced value and reduced the fine but imposed a penalty of Rs. 50,000/-. The appellants argued that the invoice price was negotiated and standard for bulk importers, supported by letters from the trade representative of the USSR in India. The department countered that the letters were post-importation and not credible, relying on a pre-importation letter indicating special prices for the appellants to promote sales.

The Tribunal agreed with the department, emphasizing that the pre-importation letter indicated special prices not available to other importers, influenced by considerations other than sale. The Tribunal found the department's reliance on the price list valid and upheld the enhanced valuation.

2. Applicability of Open General License (OGL):
The appellants sought clearance under OGL Appendix-VI, Serial No. 46 of the ITC Policy, which permits import of items used in specific machinery. The Collector denied OGL benefit, stating that the bearings for slabbing machines in a steel plant were not machine tools. The appellants argued that slabbing machines are rolling mills, classified as machine tools, supported by a Tribunal judgment in 1991 (52) E.L.T. 119 (Tri.).

The Tribunal held that rolling mills are indeed machine tools and covered by OGL. Consequently, the confiscation under Section 111(d) and the redemption fine were set aside.

3. Imposition of Penalty:
The appellants contended that imposing a penalty in remand proceedings when none was imposed initially was unjustified, especially without a cross appeal or objection. They cited 1991 (54) E.L.T. 256 - Para 8 [ACME Batteries v. CCE] in support. The department argued that the matter was at large in remand, allowing for penalty imposition.

The Tribunal found merit in the appellants' plea, setting aside the Rs. 50,000/- penalty imposed in the remand order.

4. Issuance of Detention Certificate:
The appellants requested a detention certificate due to heavy demurrage incurred. The Tribunal noted that issuing such certificates is within the purview of Customs authorities and not typically within the Tribunal's jurisdiction. However, it suggested that the request be considered sympathetically due to delays in re-adjudication.

Conclusion:
The appeal was disposed of with the Tribunal upholding the enhanced valuation, recognizing the applicability of OGL, setting aside the penalty, and recommending sympathetic consideration for the issuance of a detention certificate.