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TMI Blog2003 (6) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... in the cross-objection, the issue to be decided is similar, they were heard together and orders were reserved. They are therefore taken up together for disposal according to law. 3.The brief facts of the case are that in all these appeals the appellants have imported used/second-hand jute mill machineries complete with electricals and accessories, under different Bills of Entries on different dates. The assessable value declared by the assessee, in each Bill of entry and percentage of value enhanced and the year of manufacture of the machineries in all these cases are as under : Appeal No. B/E No & date Assessable value % enhancement Year of mfr. C/186/02 2767/27-12-01 44,77,263 - 1993 0083/17-1-02 18,19,291 - 1993 C/192/02 0206/31-1-02 17,90,105 33.33% 1994 0244/7-2-02 5,35,726 33.33% 1994 C/207/02 0413/5-3-02 24,02,655 25% 1992 0414/5-3-02 24,84,953 25% 1993 0415/5-3-02 27,76,428 25% 1993 C/210/02 0492/18-3-02 26,18,340 25% 1993 In all these appeals, the appellants have declared the country of origin as China and England and in support of the same they have submitted the copy of country of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Imported Goods) Rules, 1988. Show cause notices were therefore issued to the appellants and after considering the reply and after granting personal hearing to the appellants, the Commissioner has passed the impugned orders as aforesaid. The appellants have come in appeal against the findings of the adjudicating authority. In the grounds of appeal, they have inter alia stated as under. Appeal No. C/186/02 :A. (a) The finding of the Commissioner that the machineries were more than 10 years old is not correct in view of the fact that there is a certificate dated 10-10-2001 and 22-1-2002 of the Chartered Engineers, M/s. P&A Adjustment Co. Ltd. according to which the year of manufacture of the machineries is 1993. As per Certificate dated 23-1-2002 of M/s. Chengde, the said machineries were manufactured in 1993 by M/s. China Textile Machines Group, Shanghai, China and installed at their Chengde Factory and the year of manufacture and the name of the manufacturer were clearly certified in the certificate issued by M/s. Chengde. The Commissioner has rejected the certificate without any supporting material. (b) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of 42 accessories, mostly motors, whereas the relevant facts were clarified by M/s. Chengde vide their letter dated 30-1-2002 that all the jute machineries were originally manufactured in 1993. However, the electrical motors and other electrical accessories were got damaged due to the running of the machinery and such damaged motors were replaced with easily available and cheap motors till such time the original motors were repaired. The letter of M/s. Chengde cannot be ignored to arrive at a finding against the appellants. (j) The finding of the Commissioner that the appellants did not dispute about the finding of the Customs Team regarding the age of the machinery is incorrect. Appeal No. C/192/02B. : Similar grounds as in appeal No. C/182/02 have been taken in this appeal also. The further grounds taken are that, - (a) As per the certificates of Polysack the said machinery were installed at their Thika factory and these were manufactured and supplied in the year 1994 by M/s. General Textile and the said company was not related to the appellants in any manner. Further, the machineries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) The finding of the Commissioner that the machine has been imported on a scrap value is not supported by any evidence. (f) The letter of SGS, the Chartered Engineers, was obtained by the department at the time of issue of show cause notice. Further, the conclusion arrived at by the Commissioner that the declared value by the importer appeared to be low by around 30% to 35% considering the residual life of the machinery, is without any basis. (g) The SGS i.e. the Independent Chartered Engineers in their report dated 12-2-2002 had found that most of the spares and accessories were in heavy wear and tear condition, there was no necessity for the Customs Department to seek a further letter dated 20-2-2002 from SGS, the independent Chartered Engineer relating to the value of the machine, particularly when there was a certificate dated 28-8-2001 issued by M/s. P&A Adjustment Co. Ltd., Chartered Engineers. Appeal No. C/207/02C. : Similar grounds as in Appeal No. C/186/02 have been taken in this appeal too. Further grounds taken are : (a) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. (h) It is only in respect of 31 switch boards and other electricals that the year of manufacture was allegedly found and reported to be more than 10 years old. (i) The value declared by the appellants have not been disputed either by the Customs Team or by SGS or by the Commissioner. Even as per the norms laid down by the Government, in respect of old and used machinery of more than six years old, the total depreciation allowable from the original value is 70%. As against this, the value declared by the appellants less than the maximum depreciation allowable. For instance in respect of the first item mentioned in the Chartered Engineer's certificate, the original price of the new machine was USD 2250 and after deducting depreciation of 70% the value would come to USD 675 whereas the value declared by the appellants was USD 1100. Identical is the position in respect of each of the machine. Appeal No. C/210/2002D. : In this appeal also the grounds taken are similar to the grounds taken in other appeals. The further grounds taken are : (a) &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the Commissioner has come to the conclusion that all the machines were more than 10 years old based on marking etc. found mostly motors, body cover switch board etc. on certain machines and not on the whole lot as explained in the grounds of appeal. Therefore, the conclusion arrived at by the Commissioner based on few parts and accessories of few jute mill machines cannot be a reason to confiscate the whole machines imported in all these cases by alleging mis-declaration. He submitted on this ground alone the orders impugned are liable to be set aside. He further submitted that while the Commissioner has accepted the value of the new machines of identical nature as certified by the foreign Chartered Engineer, he has chosen to ignore the certificate regarding age of the machinery given by the same Chartered Engineers and this amounts to accepting or rejecting the certificate in part and it is well settled that a certificate cannot be accepted or rejected in part. He has also invited our attention to the Circular issued by the Ministry vide F. No. 493/124/86-Customs (Sea), dated 19-11-1987 under which the Certificate issued by the foreign Chartered Engineer was directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also associated with the inspection of the imported machines. He therefore, prayed for upholding the orders impugned and rejecting the appeals. 6.We have carefully considered the rival submissions and gone through the entire case records and perused the case laws cited by the Appellants. We observe that in all these imports, the seller is M/s. Greenworth International Pte. Ltd., Singapore and the buyer importer is the appellants herein. PA Adjustment Co. Ltd. is the Foreign Chartered Engineers while M/s. SGS India Pte. Ltd. is the Independent Indian Chartered Engineers appointed by the Customs Department. We observe that the issue arising for determination in these appeals, is whether the Commissioner was right in rejecting the transaction value declared by the appellants under Rule 4 of the CVR and proceeding to determine the value under Rule 8 of the CVR and whether merely because certain parts/ accessories imported along with the main machineries were found to be of more than 10 years old, confiscation is warranted in respect of all the machinery imported. 7.We observe that the Commissioner has proceeded to reject the value declared by the appellants on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills of entries but the value was not enhanced. 7.2.In appeal No. C/192/02, according to the report of M/s. SGS India Pvt. Ltd. and which has been taken note of by the adjudicating authority, it was only in respect of 2 motors (made in England) and one body cover and one frame the age was found to be more than 10 years old. He has also taken into consideration the report of M/s. SGS India Pvt. Ltd. who has certified that though the goods were heavily used as wear and tear was more but the machinery would have minimum residual life of 10 years, provided the machines/equipments and their accessories were assembled, commissioned and maintained as per manufacturer's instructions. M/s. SGS also certified that that the value declared by the importer appeared to be low by around 30 to 35%. Guided by the certificate issued by M/s. SGS India Pvt. Ltd. the Commissioner proceeded to enhance the value by 33.33% and ordered confiscation of all the goods covered under four Bills of Entry in this appeal with option to redeem the same and imposed penalty. 7.3.In Appeal No. C/207/02 according to the report of M/s. SGS India Pvt. Ltd. in respect of one electric switch board, 21 electrical Switch b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chosen to reject the transaction value declared by the appellants on allegation of mis-declaration. We have been taking a consistent view that a Chartered Engineer's certificate cannot be accepted in part that is accepting the portion which is advantageous to the department and rejecting the portion which is not advantageous to them. We observe that the Hon'ble Supreme Court in their latest judgment in the case of Eicher Tractors Ltd. v. CC, Mumbai reported in 2000 (122) E.L.T. 321 (SC) has clearly laid down the law in regard to the situations where the transaction value can be rejected. In the present case, it is not the case, of the department that there was flow of consideration to the appellants or there was mutuality of interest between the sellers and the buyers so as to come within the ambit of the exceptions clause envisaged under Rule 4(2) of the CVR, 1988. In the circumstances we do not find any material to support the view taken by the Commissioner that the value cannot be fixed under Rule 4 of the CVR and that it has to be fixed under Rule 8 thereto. Therefore, we are of the considered opinion that rejection of the foreign Chartered Engineers' certificate on allegation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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