TMI Blog2015 (4) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the models of the photocopiers are obsolete models and the manufacturers have discontinued the manufacture of these models. If this is so, a supplier may sell such old and used goods of obsolete model even at throw away price. It is not the allegation of the Department that the appellant and the foreign supplier were related person or that there were circumstances as enumerated in the proviso to sub-Rule (2) of Rule 3 of the Customs Valuation Rules, 2007 on account of which the declared transaction value cannot be accepted. Another situation in which the declared transaction value can be rejected is that covered by Rule 12 of the Cenvat Valuation Rules when the proper officer has reason to doubt the correctness of the declared transaction value. But Rule 12 of the Cenvat Valuation Rules also provides that if after inquiry by the proper officer, the proper officer doubts the correctness of the declared transaction value and rejects the same, he is required to intimate the importer about rejection of the declared value after giving reasonable opportunity of being heard. But no such inquiry has been done in this matter. Merely on the basis of NIDB data which, as discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso the value of the same and further, as the appellant was not having any license to import the said goods, the same were put under seizure on 28.8.2008. 3. It stand observed in the impugned order of the Commissioner that on verification of the prices from the market, it has come to the notice that models mentioned in the invoices were obsolete models and all these models were of 5-10 years old and the manufacturers have discontinued the manufacturing of the said models and hence, the prices were not available. However, the Revenue still insisted on another Chartered Engineers certificate which was produced by the appellant showing the value of the goods as ₹ 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 Engineers certificate from Shri Pankaj Gupta wherein, he after examining the goods opined the value of the same as ₹ 20,13,120/-. 4. The statement of Shri S C Chawla, proprietor of importing firm was recorded wherein he said that he was importing the goods for the first time and the same were purchased from the traders on the agreed upon the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terates the finding of the lower authorities and submits that the appellants has himself agreed to pay the duty at the enhanced value. As such, he cannot be allowed to contend to the contrary. He submits that inasmuch as the goods stand examined by the department as also by various Chartered Engineers and the value stand arrived at ₹ 20 lakhs approximately, the declared value of ₹ 10 lakhs by the appellant cannot be adopted for the purpose of payment of duty. As regards redemption fine and penalty, he submits that the same is commensurate with the and is reasonable and does not call for any further reduction. He accordingly, prays for rejecting the appeal. 8. We have considered the submissions made by both the sides. 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. As already recorded there were 3 Chartered Engineers certificate. The first assessed the value of the goods around ₹ 13 lakhs, second assessed the same around ₹ 16 lakhs, whereas the three Chartered Engineer assessed the same around ₹ 20 lakhs approx. in respect of the same good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. 11. It is further seen that Revenue has procured three different Chartered Engineers certificate 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 ₹ 20 lakhs, Revenue was satisfied and took up the matter for adjudication. 12. It is further observed in the impugned order of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenues prayer for enhancement of the same cannot be accepted. To the similar effect is decision of the Hon ble Kerala High Court in the case of CC, Cochin vs. Office Devices [ 2009 (240) ELT 336 (Ker)] and the decision of the Tribunal in the case of CC, Cochin vs. Dilip Ghelani [2009 (248) ELT 888 (Tri-Bang)]. Some further reference can be made to the following decisions, where redemption fine and penalty was reduced to 10% and 5% of value:- 1. L.K. International vs. CC (Prev) Amritsar Final Order No. C/A/205-212/2012 Cus(DB) dated 25.6.12 2. B.E. Office Automation Products P Ltd. vs. CC (Prev) Amritsar Final Order No. C/A/177-188/2012-Cus(DB) dated 25.6.12 Hon ble Bombay High Court in the case of Tejus Proprietary concern of Tejus Rohitkumar Kapadia [ 2012 (275) ELT 175 (Bom)] has observed that Tribunal is duty bound to follow the binding precedent and further observed that the CESTAT as a judicial body, must realize the importance of doctrine of precedent as in our legal system. Deference to judgments of the Supreme Court is a matter of constitutional principle. Equally unless Coordinate Benches of the Tribunal have due deference and regard for decisions rendered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under CBEC Circular No. 4/2008 dated 12.02.2009 was also not furnished. Those photocopier machines were seized and confiscated resulting in levy of duty as well as imposition of redemption fine of ₹ 5,00,000/- and penalty of ₹ 2.50 Lakhs under Section 112A of the Customs Act, 1962. 2. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned member in the case of Navpad Enterprises Vs. C.C., Cochin 2009 (235) E. L. T. 376 (Tri. Bang.)for drawing above conclusion. 5. The reasoning and finding recorded by the learned judicial member being not according to law as stated by Supreme Court in above case and facts on record, I record my separate order in the following paragraphs. 6. 105 Pcs. of old and used Photocopy Machines of different model alongwith their parts kept in 60 boxes were imported without licence required under Exim policy. Examination by the Custom showed presence of two machines having Model No. IR 6000 and IR 330 in place of IR600 and IR300. Misdeclaration of description was proved. So also the consignment was undervalued. This is obvious that misdeclaration usually results in misdeclaration of value. 7. There was significant variation in the valuation made by the Chartered Engineer in respect of the imported goods. While one such valuation was ₹ 13 Lakhs, the other was around ₹ 16 Lakhs. Due to such inconsistency, a certificate from Shri Pankaj Gupta was produced indicating the value of the import as ₹ 20,13,120/-. This is on record. Chartered Engineer s Certificate were p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (TECHNICAL) MEMBER (JUDICIAL) Date of Hearing/order 12/12/2014 Per. Rakesh Kumar :- The appellant, a proprietorship concern, imported a consignment of 105 old and used photocopier machines of assorted make and filed a bill of entry dated 03/07/08 for their clearance. The declared value of the goods, as per the supplier s invoice, was ₹ 10,13,256/-. Since there was no Chartered Engineer s certificate alongwith the supplier s invoice, the appellant produced a certificate dated 11/07/08 of the Chartered Engineer M/s Rajesh Burman and Associates who estimated the value of the goods as ₹ 13,51,080/-. It appears that the Department was of the view that the Charter Engineer s report does not contain the required details and hence the same was not acceptable. The Chartered Engineer M/s Rajesh Burman was asked again to give his opinion and he after examining the goods 100% gave an opinion dated 01/09/08 giving the value of the goods as ₹ 16,18,920/-. Since the Department was of the view that in view of the NIDB data, the value of the goods is much higher, the opinion of another Chartered Engineer Shri Pankaj Gupta was obtained and accordingly on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 recorded by him held that the declared transaction value is not acceptable and that the Commissioner has correctly enhanced the transaction value to ₹ 20,13,120/-. He also held that there is no justification for reducing the redemption fine to 10% of the value and penalty to 5% of the value. 3. Accordingly, on account of difference of opinion between Member (Judicial) and Member (Technical), the following point of difference has been referred to the undersigned for decision :- Whether 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). 4. Heard both the sides in respect of point of difference. 5. Shri K.K. Sharma, Advocate, the learned Counsel for the appellant, pleaded that the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Chartered Engineer s certificate which had earlier ordered the value of the goods as ₹ 13,51,080/- and subsequently 100% on examination of the machines reversed the value to ₹ 16,18,920/-, that when the appellant themselves in a statement given under Section 108 of the Customs Act, 1962 had accepted the value determined by the Department, they cannot plead that the value given by the Chartered Engineer is not correct and the declared should be accepted, that the Apex Court in a series of judgment has held that quantum of redemption fine must be sufficiently high to mop up the entire margin of profit as nobody should be allowed to make profit by importing any goods in contravention of the Exim policy, that in this case the appellant had imported a consignment of 105 old and used photocopiers without any licence, while the import of old and used photocopier, as per the Exim policy requires an import licence, and that, in these circumstances, it would not be correct to reduce the redemption fine and penalty. He, therefore, pleaded that it is the order recorded by Member (Technical) which is correct. 7. I have considered the submissions from both the sides and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he declared transaction value can be rejected is that covered by Rule 12 of the Cenvat Valuation Rules when the proper officer has reason to doubt the correctness of the declared transaction value. But Rule 12 of the Cenvat Valuation Rules also provides that if after inquiry by the proper officer, the proper officer doubts the correctness of the declared transaction value and rejects the same, he is required to intimate the importer about rejection of the declared value after giving reasonable opportunity of being heard. But no such inquiry has been done in this matter. Merely on the basis of NIDB data which, as discussed above, is not relevant in this case, the declared transaction value could not be rejected. Therefore, on the issue of valuation, I agree that the decision of Member (Judicial). 10. As regards of quantum of redemption fine and penalty, it is settled law in the cases of import of restricted goods without import licence, the quantum of redemption fine should be sufficiently high to neutralin the entire margin of profit. Member (Judicial) has reduced the fine to 10%. According to the Department it should be 50% of the declared value. However, if the Department seek ..... X X X X Extracts X X X X X X X X Extracts X X X X
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