TMI Blog2013 (3) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion after minutely verifying the state and the year of make of the machineries. It is also not the claim of the appellants that the said examination by the Expert Committee was done in their presence. In view of all above factors, the report given by the Expert Committee appointed by the Revenue is more reliable. Once the transaction price was not reliable as the true assessable value, the only reasonable method was to determine the value on the basis of market enquiry as it would be next to impossible to find out a contemporaneous import of a similar machinery of similar vintage - Hence, the enhancement of value of the three machines to ₹ 16 lakhs should be upheld. EURO was introduced as an accounting currency only on 1-1-1999 and EURO notes entered circulation only on 1-1-2002. In this regard, a small write-up, as downloaded from Wikipedia, is enclosed. Hence, the prices of machineries manufactured around 1994 could never have been mentioned in EURO. This, coupled with the fact of mis- declaration of age of the machineries, necessitates the discard of certificate produced by the importer, as a whole. Mentioning of price in EURO when EURO was not even conceived mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - The dispute in the present appeal relates to import of three old and used machines by the appellant. As per the Revenue the said machines are more than 15 to 20 years old and the import of the same is in violation of the provisions of Exim Policy 2002 - 2007 inasmuch as the same required a licence for import. The CIF value declared by the appellant as ₹ 10,68,780/- also stands rejected by the authorities below with directions to pay duty on the enhanced value. 2. After considering the submissions made by both the sides, we find that at the time of clearance of the machines, the appellants filed import invoices, packing list as also bills of lading along with inspection certificate issued by C. Choudhary, Chief Engineer, England dated 7-11-2003, forwarded by the overseas supplier. As per the said certificate of the Chief Engineer the visual inspection and test short were carried to identify the machine and to see the actual condition. He accordingly observed that parameters of the machines are within the accuracy range of such type of machines. He also wrote that the original price of the machine in the year of manufacture was Euro 2000. 3. The machines were examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of fine of ₹ 1,50,000/- (Rupees One Lakh Fifty Thousand Only) under Section 125 of the Customs Act, 1962 in addition to duty, whatever it may be, on enhanced value. I also impose penalty of ₹ 1,50,000/- (Rupees One Lakh Fifty Thousand Only) on M/s. Auto Forgings (India) under Section 112 ibid . 5. As is seen from above order of the Joint Commissioner, she has held machineries liable to be confiscated based upon the physical examinations by the Customs as also by the report of the Chief Engineer. As regards valuation, nothing stands discussed by her as to how the value of the same is being enhanced. Surprisingly the adjudicating authority has also not arrived at the correct value inasmuch as no quantification of the same stands done by him. He has simply directed the appellant to pay duty on the enhanced value. What is the enhanced value, the Joint Commissioner is silent about. 6. On an appeal filed against the above order, Commissioner (Appeals) rejected the same by solely relying upon the committee of experts constituted by the Revenue and by rejecting the Chief Engineer s certificate produced by the foreign supplier. He has observed that the Chief Engine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no contravention of Exim policy justifying confiscation of the machine and imposition of penalty upon the appellant. 10. As regards value of the machine, we find that the Assistant Commissioner has not even quantified the enhanced value and simply directed the appellant to pay duty on the enhanced value. Similarly from the order of Commissioner (Appeals) we find that there is virtually no evidence on record to show that the value as reflected in the invoice was not the correct value of the goods. In fact the valuation aspect does not stand discussed by Commissioner (Appeals) at all. We accordingly find no reasons for payment of duty on the enhanced value, which does not stand specified by the lower authorities. In any case there being no rebuttal to the invoice price, the payment of duty on the invoice price is upheld. 11. In view of our foregoing discussions, the impugned orders are set aside and appeal is allowed with consequential relief to the appellant. (Pronounced in Court on__________) Sd/- (Archana Wadhwa) Member (Judicial) 12. [Per : B.S.V. Murthy, Member (T)]. - I have gone through the order proposed by the learned Member (Judicial) and since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor fitted on head stock was found to be made in the year 1979 and the coolant pump driving motor was found to be made in 1981. Taking into account the wear and tear of the machine, physical condition and type of technology, the experts felt that the machine was more than 10 years old. The expert s opinion also gave the approximate market value has ranging between ₹ 27 lakhs to 35.5 lakhs. The original adjudicating authority, passed an order on 23-2-2004. In his order he has mentioned that the importer vide letter dated 6-3-2004 had waived the issue of show cause notice and requested for personal hearing before deciding the issue. Shri Sujan representing the CHA appeared for personal hearing on 9-2-2004. Thereafter the original adjudicating authority recorded the following as in findings. Findings : I have gone through the records of the case. The case is based on physical examination by Customs and expert and there is nothing to argue about. I am convinced that the whole set of machine has been undervalued by the importer. It is evident that the importer have tried to mislead by distorting the year of manufacture. I, also, based on physical examination of machinery ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Customs Department had valid grounds to get the imported machines assessed by experts. Other than questioning the qualification of the Chartered Engineer, the appellants have not explained the discrepancies which in my opinion are major ones in the report of the Chartered Engineer submitted by them. Even before Commissioner (Appeals), the appellants had questioned the qualification of the Chartered Engineer but never explained the discrepancies found on the machines by the expert committee. It is impossible to imagine why anyone would fix a coolant pump driving motor and main motor of 1979 1981 in a machine manufactured in 1994 if it comes up for repair which would be definitely after 1994. Even now no explanation is available for this discrepancy. Further, there is no explanation from the appellant why one of the machines had a new plate showing the year of manufacture as 1994. This finding has not been contested also. The only ground taken by the appellant before the Commissioner (Appeals) is that before enhancing the value, the procedure required as per Valuation Rules should had not been followed. In this case in view of the fact that appellant waived the issue of show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIFFERENCE OF OPINION 16. Whether the opinion of the expert committee appointed by the Revenue that two machines are older than ten years and therefore could not have been imported without licence has to be upheld as observed by Member (Technical) or to be rejected as held by learned Member (Judicial). 17. Whether the enhancement of value of the three machines to ₹ 16 lakhs has to be upheld as observed by Member (Technical) or the transaction value declared by the importer has to be accepted as held by learned Member (Judicial)? 18. Whether the department was right in rejecting the Chartered Engineer s opinion submitted by the importer as held by learned Member (Judicial) or it has been correctly rejected as held by Member (Technical)? 19. Whether the original value of the machines indicated by the Chartered Engineer in EURO renders the opinion suspect as held by Member (Technical) or the report has to be accepted as a valid one as held by learned Member (Judicial)? 20. The confiscation of the machines is to be set aside as held by learned Member (Judicial) or to be upheld as held by Member (Technical). 21. Penalty imposed has to be upheld as held by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the ld. Member (Technical) is not based on any evidence. There is no evidence whatsoever on record to arrive at the conclusion that the value was changed in the Bill of Entry by CHA. On the contrary, the endorsement made in the Bill of Entry appearing at Page 19 of the appeal is to the effect that the assessable value is enhanced as per the Order-in-Original. The Order-in-Original does not indicate as to how the enhanced value of ₹ 16 lakhs is arrived at. Ld. Member (Technical) has also observed that the appellants had waived the show cause notice. It is settled law as laid down in the case of Khushiram Beharilal v. CCE - 1997 (94) E.L.T. 129 that mere waiver of show cause notice cannot be construed as acceptance of value. It is settled law laid down by Hon ble Supreme Court in the following judgments that even in the case of second-hand goods, the transaction value cannot be rejected unless there is evidence to show that there is violation of any of the clause of the proviso to Rule 4(2) of the Customs Valuation Rules, 1988, justifying rejection of the transaction value : Tolin Rubbers Pvt. Ltd. v C.C.E - 2004 (163) E.L.T. 289 (S.C.) - Motor Industries Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by the foreign supplier gives the year of manufacture as 1994 which means that the goods are not more than 10 years old. As rightly held by ld. Member (Judicial), there is no basis or evidence for rejecting this certificate. The ld. Member (Technical) has doubted the certificate on the basis that the Chartered Engineer was based in England, whereas the machines were exported from Germany. This cannot be the basis for doubting the certificate. In today s world, the area of operation of professionals is not limited by geographical boundaries and after all England and Germany are part of European Union. The other reason given by the ld. Member (Technical) is that the Chartered Engineer has given the price in the year of manufacture of 1994 in terms of Euro whereas Euro was introduced in 1999. This reasoning ignores the fact that Euro merely replaced the former European Currency Unit (ECU) in ratio of 1:1. Since the Chartered Engineer has issued the certificate in 2004 by which time Euro was in existence, he has given the Euro equivalent of ECU which in any event was in the ratio of 1:1 to Euro. It is therefore submitted the view taken by ld. Member (Judicial) is correct i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the importer, the same can be ignored as the same was not based on true state of the machineries or the documents. Since the Expert Committee nominated by the Department has given their opinion after minutely verifying the state and the year of make of the machineries. It is also not the claim of the appellants that the said examination by the Expert Committee was done in their presence. In view of all above factors, the report given by the Expert Committee appointed by the Revenue is more reliable and the Hon ble Member (Technical) s view that two machines are older than 10 years and therefore could not have been imported without licence has to be upheld. In this regard, reliance is placed on the following decisions :- Michigan Tyres Ltd. v. C.C., Mumbai - 2002 (150) E.L.T. 420 (Tri.-Del.) Essar Steel Ltd. v. C.C., Ahmedabad - 2004 (166) E.L.T. 90 (Tri-Mum.) Difference of Opinion at (ii) : In view of the facts narrated above, it is apparent that there was misdeclaration in the age of the machineries with a view to illegally importing what, otherwise, was a restricted item. It may also please be seen that the Chartered Engineer had mentioned the original value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uled that the Chartered Engineer s certificate was correctly rejected by the Department. If that is the case, there is no alternative but to hold that the Department was right in relying upon the certificate given by the Committee of Experts appointed by the Department which opined that the machineries were more than 10 years old. In any case, as elaborately submitted at Point No. (i) above, the Chartered Engineer s opinion submitted by the importer was correctly rejected for the reasons given at Point No. (i). Difference of Opinion at (iv) : As has been submitted in Point No. (i) above, EURO was introduced as an accounting currency only on 1-1-1999 and EURO notes entered circulation only on 1-1-2002. In this regard, a small write-up, as downloaded from Wikipedia, is enclosed. Hence, the prices of machineries manufactured around 1994 could never have been mentioned in EURO. This, coupled with the fact of mis- declaration of age of the machineries, necessitates the discard of certificate produced by the importer, as a whole. Mentioning of price in EURO when EURO was not even conceived makes it clear that the certificate was a sham. The value certified vide this certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed by the appellants anywhere in the grounds of appeal. If there is no dispute as to the inspection done by the experts as regards the age of the machines, only challenging the qualification of the said Engineer may not carry the case of the appellant any further. 30. As regards the valuation aspect, I find that both the lower authorities have only held that enhancing the value of the machinery which have been imported from ₹ 10,79,468/- to ₹ 16 lakhs. I find that for arriving at the enhanced value and for rejecting the transaction value, the lower authorities are duty bound to follow the provisions of Customs Valuation Rules in its entirety. In my view, if the transaction value is sought to be rejected by the lower authorities, the enhancement or re-determination of the transaction value needs to be done in an appropriate manner as has been settled by various judicial forums. With respect, I may reproduce the ratio of the judgment in the case of Tolin Rubbers Pvt. Ltd. (supra), wherein their Lordships have held as under : The appellant before us imported certain machinery under Bill of Entry dated 22-1-1996. The Assessing Authority held that the machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared by the appellant could be rejected by the lower authorities as in this case, there is an exceptional situation. At the same time, re-determination of enhanced value has to be done on acceptable method as has been laid down by the law. In this case, I find that both the lower authorities have not followed the provisions of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. Hence, the enhanced value arrived at by the lower authorities has to be held as incorrect and to that extent the order of ld. Member (Judicial) is correct and I agree with her order. 32.3 As regards Point No. (iii), (iv), (v) and (vi) of difference of opinion, I find that since I have already held that the age of the machineries has been incorrectly put forth by the importer and having held that report of expert chartered by the Revenue seems to be correct. Accordingly, I hold that for the difference of opinion at Points (iii), (iv), (v) and (vi), the ld. Member (Technical) s view is correct. 33. Accordingly, I answer the reference made to me as indicated hereinabove. 34. Registry is directed to place the file before the Bench for further action. Sd/- (M.V. Ravindran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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