2000 (5) TMI 368 - AT - Customs

Summary

Issues Involved:
1. Determination of the date for the rate of duty - landing of goods vs. presentation of Bill of Entry
2. Valuation of second-hand machinery imported - depreciation deduction as per Income Tax Act

Analysis:

Issue 1: Determination of the date for the rate of duty
The appeal raised concerns over whether the date for determining the rate of duty should be the date of goods' landing in India or the date of presenting the Bill of Entry. The Revenue contended that the rate of duty should be based on the date of goods' arrival, while the Collector (Appeals) argued for the date of Bill of Entry presentation. The Revenue highlighted that the Bill of Entry was filed before the goods' arrival, invoking the Proviso to Section 15 of the Customs Act. The Tribunal noted that the Bill of Entry lacked an entry inwards number, signifying its submission before the entry inwards, which is crucial for completing the import process. Citing legal precedents, the Tribunal emphasized that until entry inwards is granted, the import is not finalized, supporting the Revenue's stance. Consequently, the Tribunal ruled in favor of determining the rate of duty based on the date of goods' arrival and entry inwards.

Issue 2: Valuation of second-hand machinery imported
Regarding the valuation of second-hand machinery, the dispute revolved around the application of depreciation as per the Income Tax Act. The Revenue argued against applying Income Tax Act provisions for depreciation, asserting that valuation should adhere to the Customs Act and Valuation Rules. The proper officer had allowed a 15% annual depreciation on the machinery's value under Rule 8 of the Customs Valuation Rules. The Tribunal concurred with the Revenue, emphasizing that Income Tax Act provisions for depreciation are inapplicable for customs valuation. Analyzing the calculation chart presented by the Revenue, the Tribunal found no justification for inflating the imported goods' value based on price rise, as the increase was attributed to currency fluctuations. Consequently, the Tribunal upheld the depreciation at 15% per annum and directed the addition of freight, insurance, and landing charges to determine the CIF value for customs duty calculation.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, affirming the determination of the rate of duty based on the date of goods' arrival and entry inwards, and upholding the valuation methodology under the Customs Act and Valuation Rules for the imported second-hand machinery.