1997 (4) TMI 211 - AT - Customs

Summary

Issues:
1. Determination of assessable value of used medical equipment for import duty.
2. Validity of import without a valid license under Savings Clause.
3. Acceptance of valuation by Chartered Engineer over Department's valuation.
4. Application of depreciation for valuation of used machinery.
5. Comparison of valuation methods for second-hand machinery.

Issue 1: Determination of assessable value of used medical equipment for import duty.
The appeal was against the Commissioner of Customs' order determining the assessable value of used medical equipment Sonograph imported by the appellant at Rs. 1,38,000 for duty levy. The appellant declared the goods as a gift and claimed clearance without an import license under the Import Control Order, 1955. The Commissioner found the declared value of Rs. 4,240 to be lower than the ascertained value of Rs. 1,38,000, considering the used condition of the goods. Although the appellant argued for a fair value of Rs. 15,000 based on a Chartered Engineer's evaluation, the Commissioner upheld the assessable value of Rs. 1,38,000, citing it as a fair value after depreciation.

Issue 2: Validity of import without a valid license under Savings Clause.
The appellant imported the goods as a gift without possessing a valid import license, which was required for second-hand goods. However, the Commissioner allowed clearance for personal use but ordered duty levy on the goods at the determined value of Rs. 1,38,000, taking a lenient view due to the goods being imported as a free gift.

Issue 3: Acceptance of valuation by Chartered Engineer over Department's valuation.
The Power of Attorney holder for the appellant contended that the goods had a lower value, citing a Chartered Engineer's certificate valuing the goods at Rs. 15,000. The appellant argued that the Department should have accepted this valuation, emphasizing the junk value of the goods in the US. The appellant also referred to case law placing the onus on the Department to prove the correct valuation method.

Issue 4: Application of depreciation for valuation of used machinery.
The Department calculated the assessable value by considering the price list of General Electric for a similar machine in 1984 at US $ 18,700, and applying depreciation for the years of usage. The Commissioner accepted this method as appropriate for valuing used machinery, noting that no two second-hand machines are identical at the time of import for direct comparison.

Issue 5: Comparison of valuation methods for second-hand machinery.
The Tribunal upheld the Department's valuation method, emphasizing that valuation of used machinery must be based on the condition of the machine at the time of import or other credible evidence of its value. The Tribunal rejected the appellant's argument that the Department should have accepted the Chartered Engineer's valuation, stating that the Department's method was in line with general practices for valuing used machinery.

In conclusion, the Tribunal rejected the appeal, upholding the Commissioner's order to levy duty on the imported goods at the assessable value of Rs. 1,38,000, based on the valuation method applied by the Department for second-hand machinery.