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TMI Blog2004 (10) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... has also confiscated the goods under Section 111(m) of the Act, ibid. with option to redeem the same on payment of fine of Rs. 10,22,000/- in lieu of confiscation under Section 125 of the Act, besides imposition of penalty of Rs. 5,11,000/- under Section 112(a) of the Act. 2. The brief facts of the case are that the appellants herein imported 18 Nos. of Windmills - Blades from M/s. Oak Creek Energy Systems Inc. USA vide Bill of Entry No. 522475, dated 21-8-2003 under Invoice No. 197, dated 12-8-2003 and declared the invoice value as USD 24,000 and the value was assessed at Rs. 13,60,868/-. The importer had paid duty on merit @ 25% BCD and 4% SAD. After assessment the subject goods were examined and pass out orders were given by the Customs. Pursuant to the receipt of information by the Officers of the Directorate of Revenue Intelligence (DRI) that the importer-appellants undervalued the goods, they visited the office premises of the appellants on 25-8-2003. Perusal of the documents revealed that that an amount of Rs 10,08,565/- was paid by the importer to the steamer agent towards freight charges and they had not declared the same to the Customs at the time of assessment of the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se circumstances, show cause notice was issued to the appellants which culminated in the order of adjudication passed by the Commissioner as noted above, which is challenged before us. 3. Shri AK Jayaraj, learned Counsel for the appellants at the outset submitted that the blades were manufactured in the year 1995-96 and there was no takers for the same and the supplier had to sell the same at the price negotiated between them and the price mentioned in the invoice is the actual price paid by the appellants. He has pleaded that the department proceeded to enhance the value based on the Chartered Engineer s certificate. He has further pleaded that that even according to the Department, the goods imported in the present case are not second-hand goods. The goods involved are new. This fact has been noted in para 15(v)(b) of the impugned order. He has also submitted that even the terms of Public Notice No. 80/94 relied upon by the Commissioner, lays down that second hand machinery may be got appraised by Chartered Engineer. When the Public Notice enjoins that the second hand machinery may be appraised by Chartered Engineer, subjecting the goods involved in the present case, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 2000 (117) E.L.T. 538 (S.C.) wherein it was held that it is always for the Customs authorities to establish by methods known to law and in a satisfactory manner that the value of imported goods is not what the importer says it is and what that value actually is . He submitted that in this case the burden was cast on the department that the transaction value declared by the appellants was not correct and this burden has not been discharged and hence, the transaction value has to be accepted as the correct value. He has also submitted that in terms of Customs Notification No. 21/2002, dated 1-3-2002 as amended by Notification No. 26/2003, dated 1-3-2003 the appellants were entitled to concessional rate of customs duty at 5% BCD. But the appellants could not get the required certificate from the Ministry of Non-conventional Energy, recommending the grant of exemption in time, and hence had to pay duty at 25% BCD and 4% SAD. He submitted that this factor should have been taken into consideration by the Commissioner. He, therefore, prayed for setting aside the impugned order and allowing the appeal. 4. Shri C. Mani, learned JDR appeared for the Revenue and defended the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods, as seen from the impugned order, was that the manufacturer s price was not provided by the importers. It is not the case of the department that they have made any efforts to get the manufacturers price through the diplomatic channels when it was not provided by the appellants. Based on the opinion given by the Chartered Engineers, the Commissioner proceeded to enhance the assessable value of the goods and demanded differential duty on the goods imported. The contention of the importer-appellants is that when Public Notice specifically envisages that second hand machinery may be got appraised by Chartered Engineers, it was outside the purview of the instructions issued by the Board to get the goods inspected by Chartered Engineers and to use that inspection report against them. Therefore, the report cannot form the basis for enhancement of the price. We observe that under-valuation is alleged by the Department against the appellants. When that be so, it was for the Department to disprove the value declared by the appellants. This burden cast on them has not been discharged by the Revenue. Further, the fact that the goods were manufactured in the year 1995-96, though not u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was at the instance of the DRI, that it was found that the freight charges were not included and on being pointed out about non-inclusion of freight charges, the appellants paid the differential duty of Rs. 3,02,496/- arising out of then on-inclusion of freight charges during investigation and before the issue of show cause notice which was on 25-09-2003. So far as insurance is concerned, the Managing Director of the appellants in his statement dated 10-9-2003 has stated that they had not paid any insurance to any company. This position is not disputed by the Revenue. In the circumstances, in our opinion, no mala fide can be attributed against the appellants for the non-inclusion of the freight charges. Consequently, misdeclaration as alleged against the appellants, in our opinion, cannot be sustained more particularly when there was no mis-declaration about the nature of the goods, the country of origin, and the supplier etc. In the backdrop of the factual position as brought out above, and in the facts and circumstances, in our view, there was no reason to doubt the genuineness of the transaction value, in terms of the judgment of the Hon ble Supreme Court in the case of Eich ..... X X X X Extracts X X X X X X X X Extracts X X X X
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