2018 (4) TMI 550 - AT - Customs

Tribunal upholds decision on imported hard disks, deems goods new despite being outdated.

CCE, Hyderabad-II Versus M/s. Big Apple Computers

The Tribunal upheld the Commissioner (Appeals)' decision in a case involving the rejection of declared value of imported computer hard disks. The Tribunal ... Valuation of imported goods - computer hard disks - rejection of declared value - Held that: - the lower authority has rejected the transaction value without nay valid grounds. He has arrived at his decision going by the presumption that the goods were second hand in nature - There is a catena of judicial pronouncements to the effect that the department cannot reject the transaction value in an arbitrary manner - appeal dismissed - decided against Revenue. Issues:1. Rejection of declared value of imported goods by the original authority.2. Confiscation of goods, imposition of redemption fine, and penalty on the importer.3. Appeal by the department against the order of the Commissioner (Appeals).4. Assessment of goods as new or used based on Chartered Engineer's report.5. Valuation aspect and rejection of transaction value by the lower authority.Analysis:1. The original authority rejected the declared value of imported computer hard disks and re-determined the assessable value, leading to the confiscation of goods, imposition of redemption fine, and penalty on the importer. The Commissioner (Appeals) set aside this order, prompting the department to appeal.2. During the hearing, the appellant's representative argued that the goods' newness was inconclusive based on the Chartered Engineer's report, which indicated a high residual life percentage, suggesting prior use. The respondent's counsel contended that the Commissioner's decision was just and comprehensive, warranting no interference.3. The Tribunal noted the Chartered Engineer's findings that the goods were outdated models but appeared unused externally, leading the Commissioner (Appeals) to conclude the goods were new. The Tribunal upheld the Commissioner's decision, emphasizing the Engineer's certification that the items did not appear used, thereby extending the benefit of doubt to the appellants.4. Regarding valuation, the lower authority rejected the transaction value without proper justification, assuming the goods were second hand. The appellants claimed they agreed to the department's value under duress due to mounting demurrage charges. The Tribunal emphasized the lack of valid grounds for enhancing the value, citing precedents prohibiting arbitrary rejection of transaction value by the department.5. Ultimately, the Tribunal found no merit in the department's contentions, leading to the dismissal of the appeal. The order was pronounced in the open court, affirming the decision.