2001 (5) TMI 517 - AT - Customs

Summary

Issues Involved:
1. Classification of imported copier components.
2. Applicability of Rule 2(a) of the Rules for Interpretation of the Customs Tariff.
3. Validity of the declared value of imported goods.
4. Legality of the enhancement of the declared value.
5. Application of import policy and special import license requirements.
6. Principles of natural justice in the examination of evidence.

Detailed Analysis:

1. Classification of Imported Copier Components:
The primary issue is whether the copier components imported by M/s. Unitop Office Automation are classifiable under sub-heading 9009.90 of the Customs Tariff Act (CTA) as claimed by the appellants, or under sub-heading 9009.21 as determined by the Commissioner of Customs. The appellants argued that they imported old and used re-conditioned components, not complete photocopiers. However, the Commissioner held that the consignment constituted complete photocopiers, as no significant parts were missing, thus classifying them under sub-heading 9009.21.

2. Applicability of Rule 2(a) of the Rules for Interpretation of the Customs Tariff:
The appellants contended that Rule 2(a) is not applicable as the imported components were about 80-85% of a complete machine, which does not constitute a complete photocopier. They supported their claim with certificates from Chartered Engineers and a letter from the exporter. However, the Department's examination, supported by the Training and Technical Manager of Canon India Pvt. Ltd., indicated that the imported goods had the essential character of complete photocopiers. The Tribunal upheld the application of Rule 2(a), concluding that the imported goods should be treated as complete photocopiers since the missing parts were found in the consignment.

3. Validity of the Declared Value of Imported Goods:
The appellants declared the value of the imported goods based on the invoice, which was significantly lower than the value determined by the Commissioner. They argued that the declared value should be accepted as the transaction value under Rule 4 of the Customs Valuation Rules. However, the Commissioner did not accept the declared value, noting discrepancies in the goods' description and the valuation provided by the Department.

4. Legality of the Enhancement of the Declared Value:
The Commissioner enhanced the value of the imported goods to Rs. 20,37,757.80, based on the assessment that the goods were complete photocopiers. The appellants argued that the valuation was arbitrary and not based on comparable goods. The Tribunal found that the Commissioner correctly determined the value under Rule 8 of the Customs Valuation Rules, as the declared value could not be accepted due to the mis-declaration of the goods. The Tribunal upheld the enhanced value, noting that the appellants did not provide any other comparable prices.

5. Application of Import Policy and Special Import License Requirements:
The appellants claimed that their Special Import Licence permitted the import of old, used, and re-conditioned components. They argued that Rule 2(a) should not affect the import's validity under the Import Policy. However, the Tribunal concluded that if the imported goods are treated as complete photocopiers, they are subject to import restrictions and require a specific license, which the appellants did not possess. Consequently, the goods were liable for confiscation under Section 111(d) of the Customs Act.

6. Principles of Natural Justice in the Examination of Evidence:
The appellants contended that the expert opinion from Canon India Pvt. Ltd. was obtained without their knowledge and should not be relied upon. They also argued that they were not provided with complete reports, violating the principles of natural justice. The Tribunal found no violation of natural justice, as the appellants had the opportunity to cross-examine the expert. The Tribunal reduced the redemption fine to Rs. 25,000 and the penalty to Rs. 15,000, considering the goods' old and used condition.

Conclusion:
The appeal was largely rejected, with minor modifications to the redemption fine and penalty. The Tribunal upheld the classification of the imported goods as complete photocopiers and the enhanced valuation determined by the Commissioner. The import restrictions and the requirement for a specific license were affirmed, and the principles of natural justice were deemed to have been observed.