2015 (12) TMI 1044 - AT - Customs

Enhancement of value on the second hand plant and machinery (entire refinery) imported by the appellants under 123 Bills of Entries, and cleared through Chennai, Pondicherry, Karaikal and Cuddalore ports - different approach by different authorities for valuation - Held that - On perusal of the contract agreement entered with the foreign supplier M/s. UHDE, Gmbh, Germany, we find that it is for the supply of entire refinery equipments from the existing mobil refiney, Germany on as is where is condition and includes dismantling, packing, freight etc. As per the terms of the agreement, the existing mobil refinery to be dismantled and supplied to the appellant s site. As per the scope of the contract, and article (2) of the agreement , the said contract covers supply of refinery equipments including containers and documentation from outside India as per the Annexure-A and includes dismantling, shifting services as listed in Annexure-B. The entire refinery equipment will be delivered at CIF terms to the Ports viz Chennai, Pondicherry, Karaikal and Cuddalore. As per article 4 of the agreement, the consideration for the supply of the second hand refinery equipment was around 220 million DM. Vide amendment to the said contract agreement dated 09.04.99, it has been enhanced. Consequent on the finalization of five bills of entries by Chennai Customs, the jurisdictional authorities at Pondicherry, Cuddalore and Nagapattinum have taken up the finalization of assessment of the B/Es and finalized and loaded the value by simply relying the Chennai Customs order dated 04.03.2011. No independent findings given for rejecting the transaction value. On appeal, the Commissioner (Appeal) Trichy had upheld the impugned order of loading the price by 2.195 times and LAA, Chennai set aside the OIO of the AC, Puducherry. Adjudicating authorities at Puducherry, Cuddalore and Nagapattinam failed to determine the value of the second hand machineries in accordance with custom valuation Rules (CVR) read with Board s Circular, instead adopted the percentage of loading done by the DC, Chennai. Interestingly, we find that the two LAAs passed two contra orders, one upheld the OIO of Cuddalore and other LAA set aside the OIO of Puducherry, resulting in both assessee and revenue are before this Tribunal. It is pertinent to see that the order of DC, Chennai, which is adopted by other three authorities is non-exist now as the same has been set aside by LAA, Chennai order dated 27.7.2012. Therefore, in view of the peculiar nature of this case and considering the overall circumstances of the case and without going into the merits of the case, we are convinced that it is a fit case to be remanded to the original authority - whole issue relates to a single project and relates to a single refinery plant to be set up at Cuddalore and requires to examine and re-determine the value afresh by original authority. - Matter remanded back - Appeal disposed of.

Summary

Issues Involved:
1. Rejection of declared value and enhancement of value of imported second-hand plant and machinery.
2. Use of local Chartered Engineer's certificate versus load port CE certificate for valuation.
3. Finalization of provisional assessments and warehousing of goods.
4. Different adjudicating authorities' decisions and the need for a uniform decision.

Detailed Analysis:

1. Rejection of Declared Value and Enhancement of Value:
The appellant imported second-hand plant and machinery from Germany for setting up a refinery. The adjudicating authority rejected the declared value based on the Chartered Engineer's (CE) report, which estimated a higher value than declared. The value was enhanced under Rule 8 of the Customs Valuation Rules, 1998, and the Customs Act, 1962. This decision was challenged, and the Commissioner (Appeals) set aside the enhancement, directing re-determination based on the load port CE certificate.

2. Use of Local Chartered Engineer's Certificate vs. Load Port CE Certificate:
The local CE's certificate was used to enhance the value of the goods, which was contested by the appellant. The Commissioner (Appeals) rejected the local CE's certificate and directed the use of the load port CE certificate for valuation. The appellant argued that each consignment had separate invoices and load port CE certificates, and the valuation should consider these documents rather than a single local CE certificate.

3. Finalization of Provisional Assessments and Warehousing:
The goods were assessed provisionally and warehoused at the refinery site. The finalization of assessments by different authorities led to inconsistent decisions. The Chennai Customs finalized five Bills of Entries based on the local CE certificate, which was set aside by the Commissioner (Appeals). Other authorities followed the Chennai Customs' order without independent evaluation, leading to appeals.

4. Different Adjudicating Authorities' Decisions and the Need for a Uniform Decision:
The adjudicating authorities at Chennai, Puducherry, Cuddalore, and Karaikal had different findings, leading to conflicting decisions. The Tribunal recognized the need for a uniform decision and suggested remanding the case to a single competent authority, preferably a Commissioner of Customs, to re-examine and finalize the assessments uniformly. This would ensure consistency and save time for both the assessee and the Revenue.

Conclusion:
The Tribunal remanded all four appeals to the original authority for re-determination of value and finalization of assessments. It recommended appointing a single adjudicating authority at the level of Commissioner of Customs to handle the entire case, ensuring uniformity and efficiency. The original authority was directed to consider all issues afresh, provide reasonable opportunities to the appellant, and finalize the assessments within three months.