2008 (11) TMI 475 - AT - Customs

Appellate Tribunal upholds import legality of splitting machine under EPCG license, dismissing Revenue's arguments.

The Appellate Tribunal upheld the legality of the import of a splitting machine, manufactured in 2003, under an EPCG license, rejecting the Revenue's ... Valuation - Undervaluation Issues:1. Validity of import of splitting machine2. Determination of the value of the splitting machineIssue 1: Validity of import of splitting machineThe respondent imported second-hand machinery, including a splitting machine, under an EPCG license. The Department discovered discrepancies in the year of manufacturing for the machines declared in the invoice and the actual year of manufacture. The splitting machine was found to have been manufactured in 2003, not 1996 as declared. The Department confiscated the machines and imposed penalties. The Commissioner (Appeals) held the import legal, stating that only capital goods over 10 years old couldn't be freely imported, and since the splitting machine was from 2003, there was no irregularity. The Appellate Tribunal upheld this decision, finding no substance in the revenue's argument against the import's validity.Issue 2: Determination of the value of the splitting machineRegarding the value of the splitting machine, the Chartered Engineer certified its value in 1996 as Euro 55,000 and Euro 32,000 for new machinery in 2004. The Revenue argued for a value of Euro 52,200 based on depreciation and reconditioning costs. However, the Tribunal noted that the value mentioned by the Engineer was for 1996. As the machine was manufactured in 2003, its value could not exceed Euro 32,000. The Tribunal rejected the transaction value, setting the machine's value at Euro 32,000. Due to misdeclaration, the confiscation was upheld, with a redemption fine of Rs. 1,50,000. The Revenue's appeal against the penalty imposition was rejected as the importers' appeal against the penalty had already been allowed by the Tribunal.In conclusion, the appeal was partly allowed, upholding the validity of the splitting machine's import while determining its value at Euro 32,000 and imposing a redemption fine of Rs. 1,50,000.