1996 (10) TMI 153 - AT - Customs

Summary

Issues:
1. Valuation of second hand off set printing machine imported by the Appellant in 1987.
2. Determining the appropriate value of the machine considering conflicting certificates and comparable imports.
3. Consideration of discounts in international trade while assessing the value of the imported machine.
4. Evaluation of the need for remand in the absence of show cause notice and opportunity to present arguments against the declared value.

Analysis:
1. The Appellant imported a second hand off set printing machine in 1987 and declared its value as US $40,000 CIF, equivalent to Rs. 5,25,624/-. The Deputy Collector of Customs enhanced the value to Rs. 6,97,462/- CIF, which was confirmed by the Collector (Appeals), leading to the present appeal challenging the valuation.

2. Initially, the Appellant provided certificates from a Chartered Engineer indicating the machine's details and value if purchased new. However, the certificates had discrepancies regarding the price of a new machine in 1987, leading to the Customs officers not following the usual depreciation method due to conflicting information. The valuation was based on a comparable import of an identical machine by another importer in Mathura, along with the manufacturer's quotation for the 1981 model.

3. The Appellant argued that variations in old machines, possible extra accessories, and price fluctuations make it challenging to determine a standard value for second hand machines. Additionally, the Appellant suggested a 25% discount in international trade, which was found to be excessive. Considering the discrepancies in the certificates and manufacturer's quotation, it was evident that there was an under-declaration of the machine's value by the Appellant.

4. As the Appellant had waived the show cause notice, there was no opportunity to present arguments against the declared value or refer to the Mathura importer's invoice to assess the machine's condition and accessories. Considering the circumstances, the Tribunal proposed a 15% discount adjustment instead of remanding the case for further evaluation, which was accepted as a fair resolution.

5. The impugned orders were modified by deducting a 15% discount from the assessed value of Rs. 6,97,462/- to arrive at the final assessable value of the imported machine, leading to the appeal being allowed in this manner.