9911796707
TMI Blog1996 (9) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... arder s certificate and freight contract. The Assistant Collector without issuing show cause notice passed an order declining to accept the certified value and freight. He assessed the FOB value on the basis of the value of new machinery in the year of manufacture as certified by the Chartered Engineers as depreciated by him and adding freight and insurance charges at the rate paid by M/s. Gammon India Ltd., another importer who imported new computers from Iraq. The Commissioner (Appeals) dismissed the appeal filed by the importer. In further appeal, the Tribunal on 23-5-1989 set aside the orders on the ground of violation of principles of natural justice inasmuch as no show cause notice had been issued and remanded the case to the Collector for fresh determination of assessable value after giving show cause notice and personal hearing within three months from the date of receipt of the order. 3. The Assistant Collector issued show cause notice dated 5-3-1990. The importer contended that the Collector and not the Assistant Collector should adjudicate the matter, but did not file any reply to the notice and did not participate in the personal hearing scheduled on 17-12-1991. He pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents imported by the appellant was contrary to the normal practice and such valuation had not been challenged on account of absence of speaking order in those cases, that there was no transaction in second hand equipment and hence there was no transaction value and the correct and proper method would be to accept the value of new equipment and machinery as seen from the invoices and data supplied by the Chartered Engineer and to depreciate the value. Reference was also made to the Board s circular dated 19-11-1987. It was further held that the freight and insurance charges shown in the Bill of Entry and the certificate produced was low (US $ 41.25 per tonne) and it was very much lower than the freight rate of US $ 77 per tonne paid by M/s. Gammon India Ltd. as freight charges for new machines imported from Iraq by the same ship. The Commissioner held that freight charges to be calculated at US $ 77 PMT were to be added to the FOB value arrived at by depreciation method. He directed that duty shall be calculated by arriving at the assessable value on the above basis. This order is now challenged. 6. The following contentions have been urged before us :- (a) The impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chartered Engineer estimated the value of second hand machinery has not been disclosed. In the absence of contemporaneous import of identical or similar goods, in the absence of transaction and transaction value (or if the transaction value has no basis and is unreal) and in the absence of any basis for the value suggested by the Chartered Engineer, it is perfectly legitimate for the adjudicating authority to determine the correct assessable value on any rea- sonable basis. The depreciation method is certainly such a reasonable method, provided the basis adopted is reasonable. The decision in Otis Elevator Co. (I) Ltd. v. Collector of Customs - 1993 (64) E.L.T. 217 (Tribunal) relied on by the appellant is of no assistance to the appellant since in that case it was held that depreciation of 7% per annum was arbitrary. The Tribunal in a number of cases has upheld the depreciation method and rates of depreciation referred to in the Board Circular. See Pragati Press v. Collector of Customs - 1984 (72) E.L.T. 620. 8. The Commissioner considered all aspects of the matter and adopted the depreciation method after rejecting the declared value based on the value estimated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same ship as freight is generally based on volume and weight of the goods and not the age of the goods. According to the appellant the goods imported by M/s. Gammon India Ltd. were computers which require sophisticated storing facility and hence freight rate might have been higher. The Commissioner did not examine all aspects of the matter before holding that normal freight rate for the second hand equipment imported by the appellant would be US $ 71.25 PMT. In these circumstances we hold that he was not justified in increasing the freight charges. 12. Point (e) : According to the appellant the Commissioner violated the time limit laid down by the Tribunal in the earlier remand order and hence the impugned order is bad in law. The first adjudication order passed by the Assistant Collector was not preceded by show cause notice or personal hearing. That order and the appellate order were set aside by the Tribunal on the ground of violation of principles of natural justice. The Tribunal instead of merely setting aside the orders, remanded the case with the direction to the Collector to determine the assessable value afresh after giving a show cause notice and personal hearing w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r show cause notice dated 14-7-1994 with allegations similar to those contained in the earlier show cause, but requiring the appellant to show cause to the satisfaction of the Collector. A second notice was unnecessary since the proceeding on the earlier notice could have been adjudicated by the Collector to whom the Assistant Collector was subordinate. Therefore the second notice has to be regarded only as a reminder or intimation to the appellant that the adjudication will be done by the Collector as the appellant was demanding before the Assistant Collector and the High Court. 14. Even before the first show cause notice dated 5-3-1990 the goods had already been cleared on provisional assessment on execution of Bond. Copy of the first show cause notice has not been produced before us. But the second adjudication order of the Assistant Collector indicates that action had been proposed under Section 111(m) and Section 112 of the Customs Act, 1962 which means that the notice purported to be under Section 124 of the Customs Act. The notice also raised demand of customs duty on correct assessable value. The Assistant Collector held that the goods were not available for confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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