TMI Blog2010 (7) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. Ms. Indira Seshupal, SDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. M/s. Crystal Dot Scan Pvt. Ltd., Vijayawada, has filed an appeal (No. C/26/2006) seeking to vacate the order of the Commissioner of Central Excise dated 28-10-2005 vide which, the Commissioner re-determined the assessable value of Computer to plate machine imported by the appellant as Rs. 35,99762/-; demanded differential duty of Rs. 18,28,679/- with applicable interest; confiscated the impugned machine under Section 111(m) of the Customs Act (the Act) offering an option for redemption on payment of a fine of Rs. 6 lakhs and imposed penalty of Rs. 18,28,679/- on CDSL under Section 114A of the Act. The Commissioner also imposed a penalty of Rs. 50,000/- on Shri V. Srinivasa Raju, Managing Director of the appellant firm under Section 112(a) of the Act. He has filed Appeal No. C/27/2006 seeking to quash this penalty. 2. The facts of the case are that the appellant had imported a Computer to Plate Machine (CTP) model M-Andromeda A1300M under Bill of Entry No. 1988 dated 16-8-2002 and Composite Express RIP Software under Bill of Entry No. 1987 dated 16-8-2002. The Bill of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures compared to the model for which 72000 Euros had been quoted. The importer had explained that a lesser price was subsequently offered owing to uncertainty as to the acceptability of the new technology involved in the machine imported. He also rejected the averment of the importer that the imported machine could produce 2540 Dots per Inch (DPI) only and that in order to obtain 2810 DPI or 1270 DPI, an optical element was additionally required, which accounted for the difference between the offer price and the price charged on them. The importer had furnished a certificate from the supplier for having received USD 21560 as per the invoices for the goods imported. The appellant had contended that the notice had not spelt out as to what could be inferred against the importer from the dates of the invoices and despatch of the goods. The Commissioner found that as per the price list of Andromeda CTP machines, the price ranged from 55224 Euros for a small size manual machine to 148000 Euros for a bigger size automatic machine. The price of the subject A1300M had to fall between these two prices. He found that the price of a CTP machine performing on thermal image settings imported thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine the value of the subject machine was against law. M/s. Applied Mechanics and Systems Pvt. Ltd. was the authorised distributor of the foreign supplier. The importer was not a dealer or distributor of M/s. Lithotech. The imported machine was not examined by a competent Chartered Engineer before its value was determined. The configuration and features were not examined and evaluated. The Commissioner could not have rejected the transaction value after recording that there was no contemporaneous import of identical or similar goods. The Commissioner invoked Rule 8 of CVR without sequentially considering if the previous rules of valuation applied. 5.2 The appellants relied on the ratio of the judgment of the Apex Court in Eicher Tractors Ltd. v. CC, Mumbai [2000 (122) E.L.T. 321 (S.C.)], CC, Calcutta v. South India Television (P) Ltd. [2007 (214) E.L.T. 3 (S.C.)] and CC, New Delhi v. Prodelin India (P) Ltd. [2006 (202) E.L.T. 13 (S.C.)] in support of its claim on valuation. The demand of differential duty, interest, order of confiscation and penalty were not sustainable. The impugned order was liable to be set aside. 6. We have heard both sides. 7. We have carefully peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3). In the instant case, we find that the Commissioner has not been able to show that the transaction value fell within the exceptions particularised under Rule 4(2). The price could not therefore, be held as unacceptable for assessment. We note that the Commissioner had relied on a draft of an agreement intended to be entered into among M/s. Lithotech, M/s. Applied Mechanics and Systems Pvt. Ltd. and M/s. Cystal Dot Scan Pvt. Ltd. to reject the invoice value. The agreement was not signed. Invoice value was suspected for the reason that proforma invoice and proper invoice were of the same date; unsigned copies of invoice were faxed by the supplier on 9-7-2002 and the actual invoice dated 4-7-2002 was recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of a CTP machine working on thermal imaging technology imported through ACC, Hyderabad in March 2002 to determine the price of the subject machine working on violet laser plate technology. This is not permissible in law. We find that the Commissioner adopted an unreliable method to determine the value. 7.3 We find that if value declared is rejected, Revenue should establish with details of contemporaneous imports of such or similar goods, that the price declared is not correct transaction value and the value has to be determined under CVR. We find that the Commissioner did not reject the transaction value for valid reasons in the absence of contemporaneous imports of comparable CTP machines at higher prices. In the case of CC, Calcutta v. South India Television (P) Ltd. (supra), the Apex Court made the following observations : 6. We do not find any merit in this civil appeal for the following reasons. Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Under Section 2(41), value is defined to mean value determined in accordance with Section 14(1) of the Act. Section 14 of the Customs Act, 1962 is the sole repositor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A.) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Under-valuation has to be proved. If the charge of under-valuation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege under-valuation, it must make detailed inquiries, collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving under-valuation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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