TMI Blog2003 (6) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-2002 seeking dismissal of the appeal filed by the party against the said order-in-original, inasmuch as in all these four appeals and in the cross-objection, the issue to be decided is similar, they were heard together and orders were reserved. They are therefore taken up together for disposal according to law. 3.The brief facts of the case are that in all these appeals the appellants have imported used/second-hand jute mill machineries complete with electricals and accessories, under different Bills of Entries on different dates. The assessable value declared by the assessee, in each Bill of entry and percentage of value enhanced and the year of manufacture of the machineries in all these cases are as under : Appeal No. B/E No date Assessable value % enhancement Year of mfr. C/186/02 2767/27-12-01 44,77,263 - 1993 0083/17-1-02 18,19,291 - 1993 C/192/02 0206/31-1-02 17,90,105 33.33% 1994 0244/7-2-02 5,35,726 33.33% 1994 C/207/02 0413/5-3-02 24,02,655 25% 1992 0414/5-3-02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 1969 and the machines imported were more than 10 years old. It was alleged by the department that the appellants have under-invoiced/misdeclared the value of the goods as also the age of the machinery and hence the value declared by them was not acceptable in terms of Rule 4 of the Customs Valuation Rules (Determination of Price of Imported Goods) Rules, 1988. Show cause notices were therefore issued to the appellants and after considering the reply and after granting personal hearing to the appellants, the Commissioner has passed the impugned orders as aforesaid. The appellants have come in appeal against the findings of the adjudicating authority. In the grounds of appeal, they have inter alia stated as under. Appeal No. C/186/02 :A. (a) The finding of the Commissioner that the machineries were more than 10 years old is not correct in view of the fact that there is a certificate dated 10-10-2001 and 22-1-2002 of the Chartered Engineers, M/s. P A Adjustment Co. Ltd. according to which the year of manufacture of the machineries is 1993. As per Certificate dated 23-1-2002 of M/s. Chengde, the said machineries were manufactured in 1993 by M/s. China Textile Machines Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10 years in respect of 42 accessories, mostly motors, whereas the relevant facts were clarified by M/s. Chengde vide their letter dated 30-1-2002 that all the jute machineries were originally manufactured in 1993. However, the electrical motors and other electrical accessories were got damaged due to the running of the machinery and such damaged motors were replaced with easily available and cheap motors till such time the original motors were repaired. The letter of M/s. Chengde cannot be ignored to arrive at a finding against the appellants. (j) The finding of the Commissioner that the appellants did not dispute about the finding of the Customs Team regarding the age of the machinery is incorrect. Appeal No. C/192/02B. : Similar grounds as in appeal No. C/182/02 have been taken in this appeal also. The further grounds taken are that, - (a) As per the certificates of Polysack the said machinery were installed at their Thika factory and these were manufactured and supplied in the year 1994 by M/s. General Textile and the said company was not related to the appellants in any manner. Further, the machineries were inspected by the Chartered Engineers and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of SGS, the Chartered Engineers, was obtained by the department at the time of issue of show cause notice. Further, the conclusion arrived at by the Commissioner that the declared value by the importer appeared to be low by around 30% to 35% considering the residual life of the machinery, is without any basis. (g) The SGS i.e. the Independent Chartered Engineers in their report dated 12-2-2002 had found that most of the spares and accessories were in heavy wear and tear condition, there was no necessity for the Customs Department to seek a further letter dated 20-2-2002 from SGS, the independent Chartered Engineer relating to the value of the machine, particularly when there was a certificate dated 28-8-2001 issued by M/s. P A Adjustment Co. Ltd., Chartered Engineers. Appeal No. C/207/02C. : Similar grounds as in Appeal No. C/186/02 have been taken in this appeal too. Further grounds taken are : (a) As per the Certificate dated 28-1-2002 issued by M/s. Baichewng Jute Textile Stock Ltd. Company, China, the machines were manufactured and supplied in the year 1992 by M/s. China Textile Machine Group, China. (b) Certificate dated 6-2-2002 was issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st this, the value declared by the appellants less than the maximum depreciation allowable. For instance in respect of the first item mentioned in the Chartered Engineer's certificate, the original price of the new machine was USD 2250 and after deducting depreciation of 70% the value would come to USD 675 whereas the value declared by the appellants was USD 1100. Identical is the position in respect of each of the machine. Appeal No. C/210/2002D. : In this appeal also the grounds taken are similar to the grounds taken in other appeals. The further grounds taken are : (a) The finding of the Commissioner that the certificate issued by the Chartered Engineer had been corrected by the assessee in the light of the finding recorded by the Commissioner in his earlier order dated 15-2-2002 relating to other imports is without any basis. The certificates in the present case is issued on 24-11-2001. Therefore, the finding of the Commissioner that the certificate has been corrected based on his order dated 15-2-2002 is not correct and is baseless. (b) There are total 128 numbers of machinery and their electricals and accessories. Even as per the report of the Customs T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he new machines of identical nature as certified by the foreign Chartered Engineer, he has chosen to ignore the certificate regarding age of the machinery given by the same Chartered Engineers and this amounts to accepting or rejecting the certificate in part and it is well settled that a certificate cannot be accepted or rejected in part. He has also invited our attention to the Circular issued by the Ministry vide F. No. 493/124/86-Customs (Sea), dated 19-11-1987 under which the Certificate issued by the foreign Chartered Engineer was directed to be accepted by the Department and the Commissioner cannot "proceed beyond the scope of the instructions issued by the Department. He has also invited our attention to the following case laws in support of his plea for allowing the appeals : (1) 2001 (129) E.L.T. 273 (S.C.) in the case of K.R. Steel Union Ltd. v. CC, Kandla. In this case the importer had imported new parts constituting 9% of the total value along with second-hand goods of not more than 10 years old and the department took the view that the importer had imported new machinery in the guise of old machinery and on appeal before the Hon'ble Supreme Court the Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action value declared by the appellants under Rule 4 of the CVR and proceeding to determine the value under Rule 8 of the CVR and whether merely because certain parts/ accessories imported along with the main machineries were found to be of more than 10 years old, confiscation is warranted in respect of all the machinery imported. 7.We observe that the Commissioner has proceeded to reject the value declared by the appellants on the ground that the Certificate issued by the foreign Chartered Engineer cannot be accepted. This conclusion was reached by him based on the examination report of the M/s. SGS India Ltd. an independent Indian Chartered Engineer according to whose report, parts of the machines mostly motors, switch boards, electrical items, etc. etc were much more than 10 years old and the visual examination also proved the wear and tear. Further the said Chartered Engineers have also certified that the machines have more than 10 years residual life. It was on these basis that he came to the conclusion that the foreign Chartered Engineer's certificate regarding year of manufacture cannot be accepted. However, he has not commented on the value of the identical new machines c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer appeared to be low by around 30 to 35%. Guided by the certificate issued by M/s. SGS India Pvt. Ltd. the Commissioner proceeded to enhance the value by 33.33% and ordered confiscation of all the goods covered under four Bills of Entry in this appeal with option to redeem the same and imposed penalty. 7.3.In Appeal No. C/207/02 according to the report of M/s. SGS India Pvt. Ltd. in respect of one electric switch board, 21 electrical Switch board with main control panel, and three AC contacts that the age was found to be more than 10 years. However, the Commissioner has proceeded to confiscate all the items covered by three Bills of Entry in this appeal and levied fine and imposed penalty after enhancing the value by 25%. He has also taken note of the examination report of M/s. SGS India Pvt. Ltd. independent Chartered Engineers who examined the goods and certified that the machinery would have minimum residual life of 10 years and that the value declared by the importer appeared to be less by 10%. Commissioner has however chosen to reject the report of M/s. SGS India Pvt. Ltd. so far as it related to the value, by holding that machinery which are less than 10 years canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st between the sellers and the buyers so as to come within the ambit of the exceptions clause envisaged under Rule 4(2) of the CVR, 1988. In the circumstances we do not find any material to support the view taken by the Commissioner that the value cannot be fixed under Rule 4 of the CVR and that it has to be fixed under Rule 8 thereto. Therefore, we are of the considered opinion that rejection of the foreign Chartered Engineers' certificate on allegation of mis-declaration of the value was not correct. We therefore, hold that there was no mis-declaration on the part of the appellants in regard to the transaction value declared by them. We have taken note of the fact that certain parts/accessories whose age was found to be more than 10 years old have been imported along with the main machinery, as found out during the joint inspection of the goods by M/s. SGS India Pvt. Ltd. the independent Chartered Engineers in India. The details of old parts accessories which were of more than 10 years old are set out in each appeal as noted above. 9.The importers have also admitted that certain parts, accessories as noted in each appeal have been imported along with main machinery. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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