2017 (6) TMI 843 - AT - Customs

Customs Tribunal Upholds Overseas Engineer Certificate, Reduces Penalty

The Tribunal partially allowed the appeal by accepting the declared value based on the overseas Chartered Engineer certificate, reducing the penalty ... Valuation of imported goods - used offset printing machine along with standard accessories - enhancement of value of the imported goods in terms of local Chartered Engineer opinion - Held that: - local Chartered Engineer was not in possession of any additional information to decide the valuation. Virtually, he has not given any reference to the technical manual or information based on which value of the machines have been reassessed. In fact, the local Chartered Engineer has indicated the year of manufacture as 1984 as against 1975 by the Chartered Engineer at load port. Admittedly, the imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the Customs Act, 1962 - redemption fine reduced to ₹ 60,000/- - penalty u/s 112 (a) upheld. Appeal allowed - decided partly in favor of appellant. Issues:1. Disregard of overseas Chartered Engineer certificate by customs authorities.2. Reassessment of the value of imported goods.3. Confiscation of goods for violation of ITC regulations.4. Imposition of penalty on importers.Analysis:Issue 1: Disregard of overseas Chartered Engineer certificateThe appellant imported a used offset printing machine and declared its value based on an overseas Chartered Engineer certificate. However, the customs authorities disregarded this certificate and had the goods assessed by a local Chartered Engineer, resulting in a higher valuation. The appellant argued that the overseas certificate was genuine and should have been accepted. The Tribunal noted that the rejection of the overseas certificate without valid reasons was not justified. The local Chartered Engineer did not provide additional information to support the reassessment, and the rejection was based solely on the opinion of another expert. Referring to precedent, the Tribunal held that such rejection was not valid and ruled in favor of accepting the declared value backed by the original Chartered Engineer certificate.Issue 2: Reassessment of the value of imported goodsThe customs authorities revalued the imported goods based on the assessment of a local Chartered Engineer, leading to a significant increase in the declared value. The Tribunal found that the reassessment was not valid as it was done without sufficient independent reasons for rejecting the overseas Chartered Engineer certificate. The Tribunal emphasized the need for proper justification in disregarding expert opinions and upheld the declared value supported by the original certificate.Issue 3: Confiscation of goods for violation of ITC regulationsThe imported goods were over 10 years old, violating Import Trade Control Regulations and the Foreign Trade Act. Consequently, the goods were liable for confiscation under the Customs Act. The Tribunal affirmed the confiscation of the goods due to the violation of regulations.Issue 4: Imposition of penalty on importersIn addition to confiscation, the importers were also liable for a penalty under the Customs Act. Considering the circumstances, the Tribunal reduced the redemption fine and penalty imposed on the importers.In conclusion, the Tribunal partially allowed the appeal by accepting the declared value based on the overseas Chartered Engineer certificate, reducing the penalty imposed, and affirming the confiscation of goods for violating ITC regulations.