1996 (7) TMI 335 - AT - Central Excise

Summary

Issues: Valuation of imported machinery, rejection of invoice value, absence of show cause notice

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the dispute revolved around the valuation of a second-hand Strausak Hobbing Machine imported by the appellants. The Assistant Collector had rejected the invoice value declared by the importers and enhanced it based on depreciation calculations. The appellants contended that only one machine was imported out of the three mentioned in the contract. The Chartered Engineer's certificate indicated the machine's manufacture year and the original price, leading to the C&F value determination. The appellants argued for the acceptance of the transaction value, citing precedents and the Supreme Court judgment in Collector of Customs, Bombay v. Nippon Bearings (P) Ltd. The Supreme Court's decision clarified that the invoice price could be rejected if evidence of a higher agreed price existed, even without contemporaneous import documents showing higher prices. The law required adequate material to reject the invoice price, not just mere suspicion.

Regarding the absence of a show cause notice, the appellants raised concerns about the valuation process being flawed due to the lack of such notice initially. However, the Tribunal found that no such ground was raised before the Collector (Appeals) or in the appeal memorandum. The absence of a show cause notice was deemed a question of fact that needed to be raised in the appeal. The Tribunal declined to entertain this new plea at that stage, suggesting that the importers might have waived the notice in their eagerness to clear the goods. Ultimately, the appeal was dismissed by the Tribunal, affirming the decision based on the valuation and procedural aspects discussed in the judgment.