TMI Blog1983 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... r was not changed until about 1968. In the year 1968, the machine underwent several changes and was given the denomination of SPM 61. In 1972-73, the SPM 61 underwent further modifications which distinguished it significantly from SPM 61. By a Proforma Invoice dated August 2,1975, the Albe offered to the petitioners seven SPM 18 machines which were second hand and completely overhauled. The offer was valid up to the end of March 1976. The petitioners were granted an import licence dated December 24, 1975 for importing seven second hand completely overhauled, automatic SPM 18 machines of the CIF value of Swiss Francs 2,10,000/-. The petitioners, accordingly, placed a purchase order dated January 3,1976 with Albe for supply of seven SPM 18 machines at a price of Swiss Francs 1,79,550/- F.O.B. Switzerland. On March 2, 1976, Albe accepted the said order and issued confirmation letter. One Mario Veri, a Swiss Chartered Engineer, issued a certificate dated May 18,1977, certifying that he had inspected the seven machines and that the selling price was reasonable. The machines were shipped under an Invoice dated May 12, 1977 for Swiss Francs 1,79,500/-. The machines arrived at Bombay in or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector imposed a penalty of Rs. 10,00,000/- on the petitioner under Section 112 of the Act and the assessment was ordered on the valuation determined by the Collector considering the value of each machine at Swiss Francs 1,29,500/-. The petitioners carried an appeal before the Central Board of Excise and Customs but were unsuccessful as the appeal was dismissed by an order dated September 28,1979. 4. The petitioners thereafter filed the present petition in this Court on January 18,1980 to challenge the order of the Central Board of Excise and Customs, but pending the hearing of the petition also preferred a Revision before the Government of India. During the pendency of the petition, the Revision Application was decided by the Government by the impugned order dated March 24, 1981. The revisional authority came to the conclusion that the contentions of the petitioners that the machines imported were second hand SPM 18 machines which had been overhauled before dispatch is correct and deserves acceptance. The revisional authority also came to the conclusion that it is difficult to sustain the charge of under-valuation for the purpose of Import Trade Control because the licence is iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1978 that the sale to the petitioners was a distress sale of the whole stock of the Company which had stopped commercial activities. The petitioners also produced letter dated Sept. 17,1975 from M/s. Mowe offering these very second-hand tip making machines recently overhauled at 35,000 Swiss Francs each. The revisional authority enquired from the Customs Officer attached to the High Commission, London to check up the genuineness of the letter and the same was verified to be true. The revisional authority thereupon relied upon the said letter and came to the conclusion that there was no mis-declaration of under-valuation for the purpose of Import Trade Control. Now Shri Desai submits that if this material produced by the petitioner was relied upon for the purpose of holding that there was no mis-declaration or under-valuation for the purpose of Import Trade Control, it is difficult to appreciate how the revisional authority recorded a finding that there was under-valuation for the purpose of customs duty. I find considerable merit in the submission of the learned counsel. 6. Shri Mehta, learned counsel appearing on behalf of the Department, relied upon the provisions of Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of March 1977. It is well-known that there is a variation or fluctuation in the prices of the machines and more so when the old machines are discarded in the foreign market. The reliance on this letter, in my judgment, does not carry the case of the Department any further. 8. The second piece of evidence on which the revisional authority relied is a telegram from M/s. Mowe addressed to an intending purchaser and which reads as under: "THANKS CABLE 28TH ESTIMATING SPM-18 RECONDITIONING COST SWISS FRANCS 35,000 TO 55,000 EACH DEPENDING CONDITION WRITING REGARDS. MOWE". Relying on this telegram, the revisional authority held that the value of the second-hand machine would be 35,000 Swiss Francs and the reconditioning of the same would require further 35,000 Swiss Francs making a total value of 70,000 Swiss Francs of each of the machines. Thereafter the revisional authority held that it would be equitable to put a f.o.b. value equal to 28,500 Sw. Frs. + 35,000 Sw. Frs. i.e. 63,500 Swiss Francs per machine. It is obvious that the revisional authority has proceeded on a total misconception that the value of the second-hand machine is 35,000 Swiss Francs and the charges of reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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