2017 (7) TMI 186 - AT - Customs

Valuation - imported used offset press complete and paper printing machines along with standard accessories - The grievance of the appellant is that custom authorities have disregarded the load port Chartered Engineer certificate without valid reasons to reject the same - Held that - local Chartered Engineer was not in possession of any additional information to decide the valuation. Virtually, he has not given any reference to the technical manual or information based on which value of the machines have been reassessed. In fact, the local Chartered Engineer has indicated the year of manufacture of offset printing machine as different to that of Chartered Engineer at load port in respect of one or two machines - reassessment value on the basis of local Chartered Engineer certificate is not valid. The imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the Customs Act, 1962 - the importers are liable for imposition of penalty also under Section 112 (a) ibid - however, redemption fine reduced to ₹ 85,000/- and penalty to ₹ 45,000/- - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Discrepancy in valuation of imported goods.
2. Validity of Chartered Engineer certificates.
3. Confiscation of goods under Customs Act, 1962.
4. Imposition of penalty under Customs Act, 1962.

Discrepancy in Valuation of Imported Goods:
The appellant imported used offset press and paper printing machines, declaring a value of AUD 28000. The Customs authorities, suspecting undervaluation, had the goods examined by a local Chartered Engineer who assessed the value at AUD 84850. The Commissioner ordered enhancement of the value, demanding differential duty. The appellant contended that the load port Chartered Engineer certificate was valid, and the local assessment was arbitrary. The Tribunal noted that the rejection of the load port certificate lacked sufficient independent reasons and followed precedent that one expert's opinion cannot be rejected solely based on another expert's view. Consequently, the declared value supported by the original Chartered Engineer certificate was deemed acceptable.

Validity of Chartered Engineer Certificates:
The appellant argued that the load port Chartered Engineer certificate was genuine and should not have been disregarded without valid reasons. The Customs authorities rejected the load port certificate due to discrepancies in the year of manufacture. However, the Tribunal found that the local Chartered Engineer did not possess additional information for reassessment and rejected the opinion solely based on another expert's view, which was deemed insufficient. Relying on legal precedents, the Tribunal held that the reassessment value based on the local Chartered Engineer certificate was invalid, and the declared value supported by the original Chartered Engineer certificate was upheld.

Confiscation of Goods under Customs Act, 1962:
The imported goods, being over 10 years old, violated Foreign Trade Regulations, making them liable for confiscation under Section 111 (d) of the Customs Act, 1962. The Tribunal acknowledged the violation and upheld the confiscation of the goods.

Imposition of Penalty under Customs Act, 1962:
In addition to confiscation, the importers were liable for a penalty under Section 112 (a) of the Customs Act, 1962. Considering the circumstances, the Tribunal reduced the redemption fine and penalty imposed on the importers to lower amounts, taking into account the facts of the case.

This detailed analysis of the judgment addresses the issues of valuation discrepancies, the validity of Chartered Engineer certificates, confiscation of goods under the Customs Act, 1962, and the imposition of penalties. The Tribunal's decision was based on legal principles, precedents, and the specific circumstances of the case, ensuring a comprehensive review of the appellant's claims and the Customs authorities' actions.