2003 (1) TMI 325 - AT - Customs

Summary

Issues Involved:
1. Eligibility of goods for exemption under Notification 59/86.
2. Correct valuation of the imported goods.
3. Authenticity and admissibility of the documents provided by Italian customs.

Detailed Analysis:

1. Eligibility of Goods for Exemption under Notification 59/86:
The primary issue was whether the imported ice-cream making machine qualified for exemption under Notification 59/86. The relevant entry in the notification exempts "refrigerators and refrigerating equipment including freezing equipment (electrical and others) other than household type refrigerator." The Commissioner denied the exemption on the grounds that the ice-cream making machine was not a simple refrigerator but a complex machine with additional functions like mixing and dispensing. However, the Tribunal referred to its earlier decision in Western Refrigeration Pvt. Ltd v. CCE and the explanatory notes to the Harmonised System of Nomenclature, which include ice-cream makers under Heading 84.18 of the Tariff. The Tribunal concluded that the goods should be entitled to the exemption, as the additional functions were ancillary and did not disqualify the machine from being considered refrigerating equipment.

2. Correct Valuation of the Imported Goods:
The valuation of the imported ice-cream making machine was contested. The appellant declared the value at Rs. 998159/-, while the department alleged it to be Rs. 5846492/-. The department based its claim on a report from Italian customs, which included invoices showing a higher value. The Tribunal noted that the report and invoices were authenticated by Italian customs officers and Carpigiani's Managing Director, Gino Cocchi. Despite the appellant's objections regarding the authenticity and the absence of original documents, the Tribunal found the photocopies admissible under Section 139 of the Customs Act. The Tribunal confirmed the department's valuation, concluding that the declared value was significantly understated.

3. Authenticity and Admissibility of Documents Provided by Italian Customs:
The appellant challenged the authenticity and admissibility of the documents provided by Italian customs, arguing that they were photocopies and not properly authenticated. The Tribunal, however, found that the documents bore the signatures of Italian customs officers and Carpigiani's representative, thus meeting the requirements of Section 139 of the Customs Act. The Tribunal also considered the Supreme Court's judgment in CC v. East Punjab Traders, which dealt with similar issues of document authenticity. The Tribunal concluded that the documents were admissible and reliable, establishing that the actual value of the goods was higher than declared.

Conclusion:
The Tribunal allowed the appeals in part. It confirmed the duty based on the higher value of Rs. 5846492/- and reduced the penalties proportionately. The penalty on Diary Den was reduced to Rs. 25 lakhs and on Harish Shah to Rs. 5 lakhs. The Tribunal's decision was based on the admissibility of the documents provided by Italian customs and the interpretation of the exemption notification, aligning with previous judicial precedents and statutory provisions.