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TMI Blog2006 (3) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... undervaluation of the goods under import, adjudication proceedings were initiated which concluded in the subject order-in-original dated 18-10-2005. In the process of adjudication, the Commissioner of Customs rejected the transaction value as the importers did not produce either the manufacturer s invoice or load port Chartered Engineer s certificate to show that the declared value was the transaction value. It was observed that the goods had been misdeclared as mixed electronic scrap and photocopier scrap. It was also found on examination that the imported goods were old/used photocopiers, fax machines and printers. The Commissioner had got the goods assessed by the Chartered Engineers M/s. Hi-tech Associates, Chennai. In the order, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipment for recycling. As per the agreement entered into between Canon Singapore and M/s. Cimelia Singapore, it provided for collection of Canon s used products collected from sellers/traders/consumers etc. for the exclusive purpose of providing proper recycling services of the products. Subject to the conditions of scrap purchase agreement between the two parties, dated 23-3-2005, Canon Singapore appointed Cimelia Singapore as its approved vender to collect, process, recycle and dispose the scrap materials listed in Annexure B to the agreement. Annexure B to the agreement contained various Canon products such as photocopiers, fax machines, ink cartridges, scanners, and other competitors products, camera plastic casings, camera accessories a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove arguments and prayed for early decision so that the goods under confiscation can be taken delivery by them. He also argued that the Customs department did not have any authority to re-determine value as no duty was involved as the goods were covered by LOP issued by the Development Commissioner. The learned Counsel also argued that in terms of the agreement, Cimelia Singapore were outsourcing their services to fulfil the scrap purchase agreement between Canon Singapore and itself and they were exporting the re-conditioned machines and reclaimed spares. The learned Counsel however, did not press the challenge to the duty liability as per the order on the goods which are not covered by LOP. 5. Smt R. Bhagyadevi, learned SDR stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and scrutiny as to prohibition. It is not disputed that in this case old and used photocopiers, fax machines and printers have been imported and the same have been declared as mixed electronic scrap. On a perusal of the invoice raised by Canon Singapore on the trader Cimelia Singapore and the invoice raised by Cimelia Singapore on the importer, it is seen that the impugned items have been declared as electronic scrap (photocopier scrap). The Bill of Lading also naturally shows the items as mixed electronic scrap. Owing to fast obsolescence of electronic equipment, models of equipment and appliances such as computers, mobile phones, camera, ipods, photocopiers go out of date and will not fetch much value in the market. They are usually sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, when popular magazines indicating price of machines generally not available, valuing of second-hand machine on the basis of Chartered Engineer s certificate and scaling down the price of machine by giving depreciation is not an arbitrary method for ascertaining the value thereof. In the case of CC, Chennai v. Motor Industries Co. reported in 2002 (149) E.L.T. 1070 (Tri. - Chennai), the Tribunal has noted that the Tribunal and the Apex Court in the case of Gajra Bevel Gears Ltd., have virtually given stamp of approval to this proposition, by holding to the effect that, where second-hand machinery, in respect of which the question of contemporaneous imports of identical/similar goods would not arise, is imported, depreciation method of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in determining the value of the imported goods is, to a great extent, guided by the certificate furnished by the Chartered Engineer. However, in the absence of particulars such as the value of the machine when new, its year of manufacture, whether the item is in working condition or not, its physical condition, its expected residual life etc. in each case, or at least in categories of very similar such machines, in the certificate of the Chartered Engineer, the Commissioner should not have accepted the certificate. The Commissioner may obtain a proper certificate with complete particulars of the machines involved for a proper assessment of their values and re-adjudicate the case. In the circumstances we decide that the matter should go ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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