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TMI Blog2017 (1) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Commissioner of Customs dated 23.4.2004 vide which the Commissioner of Customs has assessed the value of the imported goods under Rule 8 of Customs Valuation Rules, 1998 read with subsection (1) of Section 14 of Customs Act, 1962 and also held that importation is liable to confiscation under Section 111(m) of the Customs Act, 1962 but has given the option to the importer to redeem the same on payment of redemption fine of ₹ 5 lakh and also imposed a penalty of ₹ 5,000/- on the appellant under Section 112(a) of the Customs Act, 1962. 2. Briefly the facts of the case are that the appellant is a 100% EOU and they have Assets Purchase Agreement dated 20.12.2002 and Supply Agreement dated 20.12.2002 as per which they imported certain tools from M/s. Dana Corporation and they have entered into a technical collaboration agreement with M/s. Dana Corporation. They filed Bill of Entry No.592329 dated 29.3.2004 through their CHA M/s. Passage Cargo Pvt. Ltd. for clearance of the following items. Invoice No. Date Description of the item Value UL 83615 dt.22.3.04 Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tocopies and the figure US $ 1,96,400/- has been blocked at the time of photocopying and the figure US $ 10,000/- has been written in hand deliberately to get the BE assessed at lower value. (c) A Certificate dated 8.4.04 from the supplier was produced certifying the value of US $ 10,000/- in respect of Invoice No.UL 83615 as the correct value. The production of such certificate is only an afterthought, perhaps only to get the goods assessed at less value. (d) Second hand nature of the goods has not been declared by the importer even though they were aware and were in possession of Chartered Engineer s Certificate issued by Chartered Engineer of USA. (e) It is seen from the Invoice No. UL 83615 dt. 22.3.04 that there are 5 items and the value is US $ 1,94,600/-. But as per Annexure AA found in the package the value is mentioned as US $ 1,94,600/- for 8 items. However, as per Annexure AA, the value for 6 items found in the consignment works out to US $ 1,77,800/-. (f) The reply given by the importer that they put a notional value of US $ 10,000/- does not appear to be acceptable as there is huge difference between value declared and actual invoice value. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC, Kandla: 2007 (208) E.L.T. 390 (Tri.-Del.) 3. On the other hand, the learned AR defended the impugned order and submitted that the learned Commissioner has analyzed all the facts and the circumstances of the case and has rightly come to the conclusion that the appellant have mis-declared the value of secondhand capital goods imported by them. 4. After considering the submissions of both the parties and perusal of the impugned order, we find that the learned Commissioner has passed a very reasoned order on the basis of evidence which has come before him. In this regard, it is pertinent to make a reference to para 22-26, which is reproduced herein below: 22. I have considered the submissions made by the party. The value of US$10000 declared by the party at the time of assessment, as per their own admission, is only a notional value and it does not reflect the correct value of the goods. The goods are not supplied free of charge as admitted by them during the personal hearing because, they have a Technical Collaboration with the foreign supplier who is a related person for supply for plant and machinery and for which they have to make the payment on a credit basis. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment has to be as per the provisions of Section 14(1) of the Customs Act read with Customs Valuation rules, 1988. In the instant case, the value of US$10000 declared by the importer cannot be accepted for the following reasons:- (a) The buyer and the seller are related to each other as per Rule 2(2)(iv) of the Customs Valuation Rules in as much as the foreign supplier holds 74.9% of the equity shares of the importing firm. (b) The value has been declared as free of charge and a notional value of US$10000 has been indicated in the invoice on the insistence of the importer and it does not reflect the correct value. As admitted by the party, during the course of personal hearing, they have a technical collaboration agreement for the supply of plant and machinery with the foreign supplier and they are required to make payment for these goods on a credit basis at a subsequent point of time. Merely because the payment is not made immediately, it does not mean that the goods are supplied free of charge. The goods under importation are part and parcel of the plant and machinery supplied or to be supplied by the foreign supplier. Thus the attendant circumstances reveal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture indicated in the foreign Chartered Engineer's Certificate, the CIF value comes to US$74617/-. But on examination of the goods by the local Chartered Engineer, it is found that SI. Nos. or Model numbers are not available on the items and the year of manufacture is also not indicated. Therefore, the - question of accepting the foreign Chartered Engineer's Certificate to be correct with respect to the year of manufacture does not arise. On inspection of the goods by the local Chartered Engineer has opined that the goods might have been in use for about 5 years and the cost of the entire goods when new would be US$1,80,000. After allowing the depreciation for 5 years, he has arrived at a fair FOB price for the goods at US$82,800 and after taking into account the freight and insurance at actuals and the handling charges, he has arrived at an assessable value of P,s.40,48,301/-. I find that the method adopted by the local Chartered Engineer is fair and reasonable and takes into account all the relevant factors. Accordingly, I hold that the assessable value of the goods under importation is ₹ 40,48,301/- under Rule 8 of the Customs Valuation Rules, 1988, read with s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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