1996 (12) TMI 179 - AT - Customs

Issues:
Determining the value of imported second-hand machines, reliance on chartered engineer's certificate, comparison with another model, application of Customs Valuation Rules, consideration of depreciation, mis-declaration, applicability of Customs Valuation Rules, justification of valuation based on Model D-600, relevance of machines' current circulation, assessment of machines' value based on chartered engineer's certificate.

Analysis:

1. Determining the value of imported second-hand machines:
The appeal involved the determination of the value of three sets of 2nd hand carry Draw Frame Model DX-500-E 2C Automatic Canchanger, uster contoleveller with its accessories. The appellant claimed the total value as per the chartered engineer's certificate, while the Collector disputed this value based on the examination revealing the machines to be new with no signs of use.

2. Reliance on chartered engineer's certificate:
The appellant contended that the adjudicating authority accepted the chartered engineer's certificate, which valued the machines at US $ 115,000. The certificate also indicated that the machines were used for demonstration purposes, not full production, and were manufactured in 1991. The appellant argued for depreciation to be considered based on this certificate.

3. Comparison with another model and application of Customs Valuation Rules:
The Collector relied on the value of another model, D-600, and historical import prices to determine the value of the machines in question. The Collector invoked Rules 7 & 8 of the Customs Valuation Rules, 1988, to fix the value of each machine at Rs. 30 lacs, totaling Rs. 90 lacs.

4. Consideration of depreciation and mis-declaration:
The appellant argued that the machines were correctly declared as second-hand based on the chartered engineer's certificate and the year of manufacture. They contended that the valuation should be based on this certificate, considering the limited use and age of the machines.

5. Justification of valuation based on Model D-600 and relevance of machines' current circulation:
The SDR argued against accepting the invoice price, stating that the machines were new based on the inspection and should not be considered second-hand. The SDR also emphasized the similarity between Model D-600 and DX-500, justifying the valuation based on D-600 and the current circulation of D-600 over DX-500.

6. Assessment of machines' value based on chartered engineer's certificate:
The Tribunal noted that the chartered engineer's certificate valued the machines at US $ 170,000 each for new machines in 1991. The Tribunal rejected the Collector's valuation based on historical import prices and the D-600 model, instead accepting the chartered engineer's valuation as the basis for determining the value of the machines.

7. Conclusion:
The Tribunal set aside the confiscation and penalty, determining the value of each machine at US $ 170,000 based on the chartered engineer's certificate. The Tribunal emphasized that the machines were new and that no depreciation should be applied, concluding that the appeal should be allowed based on the evidence and circumstances presented.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, the Tribunal's considerations, and the ultimate decision regarding the valuation of the imported machines.

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