By TIOL News Service

NEW DELHI, MAY 01, 2014: THE appellant imported 105 pieces of assorted make old and used photocopier machines and filed a bill of entry dated 3.7.2008, claiming the classification of the same under Customs Tariff sub-heading 84433920 and declaring the value of the goods as Rs.10 ,13,256 /-. They also produced a Chartered Engineer's certificate showing the value of the goods as Rs. 13,51,080/-. However, the Revenue did not accept the declared value and found that contemporary clearances as per NIDB data would be showing the value of around Rs.19 ,59,937 /-. Accordingly, the consignment was taken up for further inquiries.

The Revenue still insisted on another Chartered Engineer's certificate which was produced by the appellant showing the value of the goods as Rs. 16,18,920/-. The said Chartered Engineer certificate issued by M/s. Rajesh Barman & Associates was also not accepted by the Revenue who procured another Chartered Engineer's certificate from Shri Pankaj Gupta wherein, he after examining the goods opined the value of the same as Rs.20 ,13,120 /-.

On the above basis, proceedings were initiated against the appellant which culminated into impugned order passed by the Commissioner of Customs vide which he enhanced the value of imported photocopier from Rs. 10,13,256/- to Rs.20 ,13,120 /-. He also confiscated the goods with an option to the appellant to redeem the same on payment of redemption fine to Rs.5 lakhs. In addition, penalty of Rs.2.50 lakhs was imposed upon the appellant under Section 112 (a) of the Customs Act, 1962.

In the Tribunal there was a difference of opinion.

Per Member(J) : As regards the value of the imported old and second hand photocopier, the Commissioner has increased the same based upon the Chartered Accountant's certificate. There were 3 Chartered Engineers certificates. The first assessed the value of the goods around Rs.13 lakhs, second assessed the same around Rs.16 lakhs, whereas the third Chartered Engineer assessed the same around Rs.20 lakhs approx. in respect of the same goods.

It is seen that the appellant declared the value as Rs.10 ,13,256 /- which was also accompanied by invoices issued by the overseas supplier of the goods. Revenue has not adduced any evidence to first discard the declared value as incorrect.

It is well settled law that the transaction value has to be adopted as the correct assessable value unless there is sufficient, tangible and positive evidence to show that such transaction value is not the correct value. In the present case, there is no such evidence on record to reflect upon the incorrectness of the transaction value. There is no evidence to show that the importer has paid any extra amount to the supplier of the photocopier other than the transaction value which is reflected in the invoice. As such, the rejection of the transaction value without any reference to the evidence cannot be upheld.

The adjudicating authority, in the impugned order has held that on verification of the price from the market it has come to the notice that model mentioned in the invoices are obsolete models and these models are around 5-10 years old and the manufacturers had discontinued their manufacturing and hence the prices were not available. In view of above acceptance of the fact by the adjudicating authority, the enhancement of the value based on Chartered Engineers certificate is not justified. Admittedly the photocopier in question were very old and obsolete models and the value of such old goods is dependent upon the condition of same as also upon the market acceptance of the same. It may not be out of place to observe that items like photocopier are fast moving items and their models keep on changing very fast, thus reducing the value of the old models. Further, the value of such goods could also depend upon the usage of such goods and the condition of the same.

Revenue has procured three different Chartered Engineer's certificates without disclosing any reason as to why the first and the second certificate of the Chartered Engineers were not accepted by them. It is only when the third Chartered Engineer enhanced the value to the extent of Rs.20 lakhs, Revenue was satisfied and took up the matter for adjudication.

The impugned order of the Commissioner that appellant has himself accepted to pay the duty on the enhanced value and as such, is estopped from contesting the same. Such acceptance for payment of duty on the enhanced value was with a purpose to get the goods cleared and to avoid detention and demurrage charges. The fact that the appellant has challenged such enhancement before the higher appellate forum is itself indicative of the appellants non-acceptance of the enhanced value.

She found no reason to discard the transaction value, in the absence of any evidence to the contrary and in the light of various decisions.

As regards the violation of EXIM Policy, in various decisions of the Tribunal, the redemption fine and penalty was reduced to 10% and 5% of the value of the photocopier. The precedent decisions of the Coordinate Benches have to be given due respect and are required to be followed unless the same are specifically deviated from by giving suitable reasoning. In these cases also, it is seen that matter needs to be referred to Larger Bench for consideration of the disputed legal issues. Inasmuch as in the present case, all the Coordinate Benches have taken a categorical view of imposition of redemption fine of 10% and penalty of 5% of the value of imported goods, she found no justification to take a different view.

She proposed setting aside the impugned order as regards the enhancement of the value. However the imported goods are confiscated with an option to the appellant to redeem the same on payment of redemption fine of 10% of the value of the goods and penalty of 5% of the value of goods is upheld.

Member (T) did not agree.

Per Member (T) : Ld. Member Judicial, in her Draft Order while setting aside the impugned order against enhancement of the value, did not disagree to impose redemption fine and penalty but reduced the same to 10% and 5% of the value declared. This order does not stand to reason since imposition of reduced redemption fine and penalty was due to confiscateability which remained undisturbed due to proved mis-declaration. Accordingly setting aside of enhancement of assessable value runs counter to the above reduced imposition. The value has been enhanced by Commissioner based on Chartered Engineer Certificate provided by importer himself and further once it was proved that importation was without licence and were seized and confiscated requiring proper imposition of redemption fine and penalty to make such importation unviable and prohibitive. This follows that there was mis-declaration and import of the offending goods without licence required under EXIM policy.

Learned judicial member held that because Tribunal has passed orders ordering reduction in the past, it was opted to follow the similar decisions noting that Bombay High Court Judgment in Tejas Proprietary concern of Tejus Rohit Kumar Kapadia - 2011-TIOL-594-HC-MUM-CUS required following of the judicial discipline.

The reasoning and finding recorded by the learned judicial member are not according to law as stated by Supreme Court and facts on record.

There was significant variation in the valuation made by the Chartered Engineer in respect of the imported goods. While one such valuation was Rs.13 Lakhs, the other was around Rs.16 Lakhs. Due to such inconsistency, a certificate from Shri Pankaj Gupta was produced indicating the value of the import as Rs.20 ,13,120 /-. This is on record. Chartered Engineer's Certificates were produced by the importer only who did not rebut the same . Therefore there was no reason to disagree with such certificate. There was also reference to NIDB data. But learned judicial member adopted transaction value on the premise that there was no evidence to show that importer had paid any extra amount to the supplier. This does not appeal to reason when there was admitted misdeclaration of description of goods as well as value thereof. Learned member's finding that above Certificate were procured by the Department is without any evidence on record. Mere reliance on judgments shall not serve purpose of law since decision in each case depends on its facts situation and the case to be governed by the citation should be within the four of the judgment relied.

Therefore on the basis of factual matrix of the case, evidence on record and following Supreme Court Judgment in Mansi Impex case , he was of the firm view that proved mis-declaration relating to description and valuation of the offending import without licence under EXIM Policy provisions calls for confirmation of the adjudication consequence.

Difference of Opinion

Whether on assessable value as determined in adjudication by the revenue is to be set-aside and redemption fine and penalty are to be reduced to 10% and 5% respectively as held by Learned Member (Judicial).

OR

Whether the valuation as enhanced by revenue based on Chartered Engineer's Certificate are to be upheld as importations have taken place without licence and no land port Chartered Engineer's Certificate has been produced and further redemption fine and penalty as ordered by Commissioner is to be upheld as held by Member (Technical).

(See 2014-TIOL-678-CESTAT-DEL)