2008 (10) TMI 192 - AT - Customs

Tribunal Upholds Import Valuation Decision with Expert Certificate, Confiscation, and Penalties

The Tribunal upheld the Commissioner's assessment of the assessable value of imported used colour monitors based on a Chartered Engineer's Certificate, ... Valuation of Second Hand Machinery – The impugned goods are used colour monitors. They were restricted for import and were imported without requisite licence contravening the provisions of Section 111(d) of the Act. As regards the second-hand machinery, appraisal by chartered engineers empanelled for the purpose by the department is an established practice. - the original authority had assessed the value of the consignment at Rs. 8.85,828/- by depreciation method. The same was rejected by the Commissioner (A) as unsubstantiated and the value fixed at Rs. 4,03,402/- relying on the certificate of SGS. – value of second hand goods can not be equated with new goods – value adopted by commissioner (A) upheld - As the goods have been imported in contravention of prohibition, the same were confiscated under Section 111(d) of the act – confiscation and penalty upheld. Issues:1. Assessment of assessable value of imported used colour monitors.2. Confiscation of imported goods under Section 111(d) of the Customs Act, 1962.3. Reduction of redemption fine and imposition of penalty.Assessment of assessable value:The case involved the import of used colour monitors with a declared value of US $6750, which was enhanced by the original authority to US $18708.88 using the depreciation method. The Commissioner (A) found that the rejection of the transaction value was based on a Chartered Engineer's Certificate, which the lower authority could not reject without proper justification. The Commissioner determined the assessable value at US $8520, considering the importer's agreement to the enhancement based on the certificate. The Tribunal upheld the Commissioner's decision, stating that appraisal by recognized chartered engineers for low-priced electronic items like used monitors is a common practice, and the valuation based on the certificate was justified due to the unique factors involved in assessing second-hand goods.Confiscation under Section 111(d):The imported monitors were confiscated under Section 111(d) of the Customs Act, 1962, as they were imported without the requisite license. The Commissioner (A) sustained the confiscation but reduced the redemption fine from Rs.1,75,000 to Rs.1,00,000, considering the nature of the goods and the circumstances. The Tribunal acknowledged that ideally, the matter should have been remanded to ascertain market value and profit margins before ordering the redemption fine. However, considering that electronic items usually yield a fair profit margin, the redemption fine of Rs.1,00,000 was deemed reasonable. The Tribunal found no grounds to interfere with this aspect of the impugned order.Reduction of redemption fine and imposition of penalty:The penalty of Rs.20,000 imposed in the original order was affirmed as reasonable by the Commissioner (A) and sustained by the Tribunal. The appellants challenged the redemption fine and penalty, arguing that the order was arbitrary and lacked justification. However, the Tribunal found the redemption fine and penalty to be reasonable under the circumstances. The impugned order was upheld, and the appeal filed by the importer was dismissed, indicating that there was no basis for interference with the Commissioner's decision regarding the redemption fine and penalty.In conclusion, the Tribunal upheld the Commissioner's assessment of the assessable value based on the Chartered Engineer's Certificate, the confiscation of the imported monitors under Section 111(d), the reduction of the redemption fine, and the imposition of the penalty. The decision highlighted the importance of expert appraisal for low-priced electronic items and considered the specific factors involved in valuing second-hand goods. The Tribunal found the actions of the authorities to be justified and reasonable, leading to the dismissal of the importer's appeal.