TMI Blog2004 (11) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... red value of the goods. These certificates certified the goods to have been manufactured in December 1993 and further certified that the prices mentioned in the relevant invoices were reasonable. The department suspected undervaluation of the goods and got them inspected and valued by a domestic Chartered Engineer, one Shri Joseph Jebaraj, who, in his reports, dated 5-5-2003, stated that the machines could have been used for a period of more than ten years. In respect of the ten machines imported by M/s. V.S.P. Co., the domestic Chartered Engineer estimated the value of the machines at US $ 300000 [Rs. 1,43,55,000/-] @ US $ 30000 per machine. In the case of the seven machines imported by M/s. Muthu Corporation, the Chartered Engineer estimated the value of the goods at US $ 210000 [Rs. 1,00,48,500/-] @ US $ 30000 per machine. The Department recorded statements from one Shri Durai Palanisamy who had been authorized to give such statements by both M/s. V.S.P. Co. and M/s. Muthu Corporation. Shri Durai Palanisamy in his statements dated 6-5-2003 and 14-5-2003 accepted the domestic Chartered Engineer's estimates of the value of the goods. The DRI also received faxed letters, dated 4-5- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he allegation of undervaluation was upheld by the Commissioner. Again, on the basis of the local Chartered Engineer's reports, the Commissioner held that the goods were more than ten years old and hence could be imported only under a valid import license. As no such licence was produced, the adjudicating authority held the goods liable to confiscation under Section 111(d) (m) of the Customs Act. It also held the importers liable to penalties under Section 112(a) of the Act. Accordingly, the adjudicating authority passed similar orders in the cases of M/s. V.S. Palanisamy Company and M/s. Muthu Corporation. In the case of M/s. V.S.P. Co., a demand of duty of Rs. 13,28,497/- was raised on the enhanced value of the ten machines, while, in the case of M/s. Muthu Corporation, a demand of duty of Rs. 9,29,948/- was made on the enhanced value of the seven machines. In both cases, the goods were confiscated as above, but with option for redemption on payment of fine [Rs.4.00 lakhs in the case of M/s. V.S.P. Co. and Rs. 3.00 lakhs in the case of M/s. Muthu Corporation]. Penalties of Rs. One lakh and Rs. 50,000/- were also imposed on M/s. V.S.P. Co., and M/s. Muthu Corporation respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of contemporaneous import of identical/similar goods would not arise, was imported, the depreciation method of valuation would be the appropriate residual method under Rule 8 of the Customs Valuation Rules which could be invoked to the exclusion of other rules. In this connection, Counsel pointed out that, according to the Board's instructions, the value depreciation admissible to Second-hand machinery was 16% for the first year, 14% in the second year, 12% for the third year, 10% for the fourth year and 8% each for the subsequent years, with the restriction that the total depreciation was not to exceed 75%. According to Counsel, if the original value of the goods [as in December 1993] in any one of the present cases was scaled down in the above manner, the result would be a value approximating to the transaction value declared in the relevant invoice. 4. Finally ld. Counsel relied on our Final Order No. 599/2004, dated 17-5-2004 which was passed in Appeal No. C/308/2003 [Anish Kumar Spinning Mills v. C.C., Tuticorin - 2004 (172) E.L.T. 394 (T)], wherein the transaction value of imported Second-hand machinery, supported by overseas Chartered Engineer's certificate, was ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of similar machines for the purpose of determining the value of the subject machines. However, no record of inspection of any such similar machines were produced by him. It is also pertinent to note, in this connection, that the Chartered Engineer in his cross-examination admitted that he was not one of the registered Chartered Engineers on the rolls of the Department. In answer to question No. 8, the Chartered Engineer stated that his value was based only on "year of manufacture". However, in answer to question No. 13, he stated that he had not specified the "year of manufacture". He also concedes that he was not possessed of any documentary evidence for the findings recorded in his reports. For these reasons, we are unable to consider the local Chartered Engineer's reports as reliable. On the other hand, we find, the Commissioner has not stated any reason to discredit the findings of the overseas Chartered Engineer. It was without rejecting those findings that ld. Commissioner ventured to rely on the local Chartered Engineer's reports. In a similar situation, in the case of M/s. Anish Kumar Spinning Mills, we held as under : "The adjudicating authority has rejected the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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