9911796707
TMI Blog1995 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,00,000/- (Rupees One lakh only) for each of said machines. The total amount of fine of Rs. 2,00,000/- (Rupees Two Lakhs only) shall be paid for both the machines. 2. Briefly stated the facts of the case are that the appellants imported certain items and filed a bill of entry for clearance thereof on 9-10-1992. The items imported were declared to be as 2 nos. second hand Spline Milling Machines Model KF-32 A with standard accessories/toolings. The appellants declared the value of goods as Rs. 9,54,876/- on the basis of invoice No. 0485, dated 4-8-1992 of M/s. Farrell Engineering Ltd., U.K. The importers claimed clearance of the goods under para 25 of the Import Policy 1992-97 under OGL claiming that the imported goods were covered by Item 1 Appendix III of the Import Policy being in the automotive component sector. On scrutiny of the documents, the customs authorities found that the goods were shipped on 4-8-1992. The goods landed on 7-9-1992 and the bill of entry was filed on 9-10-1992. The Customs were of the view that during this period the Import Policy did not contain provisions for clearance of such second hand machinery under OGL by Automotive Component Sector. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the validity with reference to the Import Policy as a specific licence was issued in this case, that the machine was of less than seven years of old and had a residuary life of more than ten years; that in any case even such requirement has been dispensed with in the latest Import Policy in terms of Public Notice No. 48(PN)/92-97, dated 18-9-1992; that Chartered Engineer has certified the particulars of the machines which are relevant for the purpose of clearance of the goods; that merely for asking the office of the DGFT would have amended the entry as ₹ 1986 make ; that the confusion arose because of source of procurement; that the machine was earlier to be imported from Germany, however due to delay in procurement, a second hand machine from U.K. had to be imported; that the mistake was of clerical nature and should have no consequence in regard to the legality of the import. 3. On the valuation aspect, the importers represented before the Collector, Customs that on the strength of Chartered Engineer s Certificate, coupled with the fact that the DGFT had given them the licence for specific value; there was no legal base for determining the value of second hand mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the goods are liable for confiscation or the importers are liable to penal action for breach of ITC provisions (b) whether the declared value is correct assessable value or the value should be enhanced to arrive at the assessable value of the subject goods. 6. The ld. DR submitted that on examination, the machines were found to be of 1986 make whereas the other particulars of the imported machines were found to agree with the description given in the import licence produced by the importers the year of make of the machines in the licence was of 1984 and thus this material itself becomes vital which clearly shows that the machine imported was not the same as the machines covered by the import licence produced by the appellants. 7. On the question that the value was shown in the import licence and, therefore, the transaction value should be accepted, the ld. DR submitted that in the licence the value shown was for a machine of 1984 make and, not for a machine of 1986 make and hence the transaction value shown in the invoice and declared in the bill of entry becomes suspect and has to be re-determined. The learned DR also submitted that the second hand capital goods were req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking into contemporaneous identical imports and therefore the value in terms of Rule 5 and 6 of the Customs Valuation Rules, 1988 could not be determined; that there was no date of sale of identical machine in India and therefore, value could not be determined under Rule 7; that the importers did not produce manufacturer s invoice therefore, the customs authorities have rightly determined the value of machine with reference to Rule 8 of the Customs (Valuation) Rules read with Section 14(1) of the Customs Act, 1962; that the importers themselves furnished Chartered Engineers Certificate wherein the price of the new machine has been shown as DM 80,000/- for each machine and therefore, the value of the second hand machine has correctly been determined by the Customs under Rule 8 of the Customs (Valuation) Rules read with Section 14(1) of the Customs Act, 1962; by following the practice of allowing depreciation. Concluding his arguments, the learned DR submitted that on both the issues as the Collector s decision is valid both from the points of fact and law. In support of his contention, he cited and relied upon the ratio of the decision of the cased reported in 1993 (68) E.L.T. 551 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted. 12. The second point that was contested before us was that in terms of Public Notice No. 48/(PN)/1992-97, dated 18-9-1992, the capital goods in second hand condition required for automotive component sector without licence could be imported. We find that this Public notice was issued on 18th Sept., 1992 whereas the goods were shipped on 4-8-1992 and landed in India on 7-9-1992. Therefore, this Public Notice did not cover the import of the goods. In the show cause notice, it was also mentioned that this Public Notice providing for import of second hand capital goods for automotive components sector was to take effect from 3-11-1992 though no documentary evidence has been produced by the customs on this count but when this point was raised in the show cause notice it was not rebutted by the appellants. Being what it may, on this point also import of the second hand goods in the instant case required a specific licence. 13. Further, in accordance with the provisions of para 26 of the Import Export Policy of the relevant period the second hand capital goods to be imported required a licence and as already held in the preceding paragraph that the licence was not valid in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ole consideration for the sale or offer for sale . The principles laid down in Section 14 is the universal principle of finding out the price at which a willing buyer will purchase from a willing seller at arm s length. The price must be the sole consideration of the sale. There is nothing in Rule 8 to suggest that a different test has been laid down by the Rules. On the contrary, Rule 8 categorically states that `where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these Rules and sub-section (1) of Section 14 of the Customs Act, 1962 . It is nowhere laid down in the Rules that if a second hand car is brought by an importer and brought into India, duties for the said second hand car have to be calculated on the basis of the price of a new car. 9. Lastly, it does not appear that there is any conflict between Rules 8 of the Customs (Valuation) Rules and Section 14(1) of the Customs Act. On the other hand, Rule 8 has been made applicable subject to the provisions of Section 14 of the Customs Act." 16. It would be seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WG grade instead of `OFF grade as declared by the appellants and also described in the Bill of Entry. This question is concluded against the appellants by the concurrent finding of fact throughout. Appellants cannot be permitted to dispute this position also in view of their categorical statement in writing to the authorities that they did not dispute the laboratory test reports and were ready to get the matter adjudicated straightaway by waiving the notice to show cause against confiscation of goods and imposition of penalty as required by Section 124 of the Act. It is on this basis that the appellants obtained clearance of the imported goods for appropriation by them. It must, therefore, be accepted that the goods imported by the appellants of which they obtained clearance with request for early adjudication, accepting the laboratory test reports, was Gum Rosin of `WG grade and not `OFF grade as declared by them or described in the Bill of Entry. The valuation of the imported goods as Gum Rosin of `WG grade for purposes of assessment made at US $ 465 per metric tonne on the basis indicated earlier does not, therefore, suffer from any infirmity and is not open to challenge. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be said to be the transaction value and question of its acceptance does not arise, as it was rightly argued by the DR. But on the point of valuation, we concur with the arguments of the appellant counsel that the burden lies on the Dept. not only in bringing sufficient evidence on record, but also same should be disclosed to other side for rebuttal while determining the value of the goods. Since this has not been done as contended by the appellants counsel and the contention of the appellants that M/s Macneil Mayor were not the local agents of the manufacturers and on the other hand, they have got some documentary evidence to show the relevant price of the similar imports have to be considered by the adjudicating authority. Hence we are remanding the matter to the concerned Deputy Collector on this limited issue to redetermine the value after giving an opportunity to the appellants. Since the goods are under detention, he is directed to dispose of the matter at the earliest possible time on receipt of this order. As regards the fine and penalty, though imposition was justified for contravention of the provisions of the Import and Export (Control) Order and the Customs Act, st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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