2018 (4) TMI 854 - AT - Customs

Import of used MFD Copiers: Appeals dismissed, valuation challenge rejected, goods confiscated.

The appeals were dismissed, upholding the Order-in-Appeal regarding the import of used MFD Copiers without proper licenses and valuation disputes. The ... Rejection of transaction value for non-production of load-port Chartered Engineer inspection/appraisement certificate - re-determination of assessable value based on Chartered Engineer appraisal and application of correct depreciation - import of used/second-hand machinery treated as prohibited/hazardous import for lacking prior environmental clearance - confiscation of goods with option of redemption and imposition of redemption fine and penaltyRejection of transaction value for non-production of load-port Chartered Engineer inspection/appraisement certificate - re-determination of assessable value based on Chartered Engineer appraisal and application of correct depreciation - Validity of rejection of declared transaction value and correctness of value re-determination by customs authorities - HELD THAT: - The Tribunal upheld the rejection of the declared transaction value because the importers did not produce the load-port inspection/appraisement certificate as required by CBEC circular No.25/2015, providing a reasonable ground to suspect the accuracy of the invoices. The Tribunal accepted that local Chartered Engineer (C.E.) certificates produced in India were properly relied upon; however, the First Appellate Authority found that the C.E. who initially appraised values had applied a uniform depreciation rate without regard to year of manufacture and other particulars, and accordingly the original authority re-determined values after rectifying the C.E.'s approach. The Tribunal found the re-determination and the method of valuation by the authorities to be legally sustainable, noting that importers had been heard, shown the C.E. certificates, and had accepted the values earlier; and that the values adopted represented C&F (assessable) value rather than a notional market value from which duties or profit margin could be separately deducted. [Paras 5, 7]Rejection of declared value for non-production of load-port C.E. certificate and the re-determined assessable value by the lower authorities sustained; no interference warranted.Import of used/second-hand machinery treated as prohibited/hazardous import for lacking prior environmental clearance - confiscation of goods with option of redemption and imposition of redemption fine and penalty - Whether the imported used copiers constituted prohibited/hazardous imports and whether confiscation and penalties were justified - HELD THAT: - The Tribunal held that the imported used multifunctional copiers were brought in without prior permission from the Ministry of Environment and Forests and without the requisite licence under the Foreign Trade Policy 2015-2020, and that they had been classified as 'hazardous waste' under the applicable hazardous-waste rules. In these circumstances the goods were correctly held to be of a prohibited nature, and the actions of confiscation with the option of redemption and imposition of redemption fine and penalties were sustained as lawful. The Tribunal found no merit in the appellant's contention that the goods were not hazardous or that the penalties were incorrect. [Paras 7]Imports held prohibited/hazardous for lack of prior environmental/FTPB permission; confiscation, redemption option, and penalties upheld.Final Conclusion: The appeals are devoid of merit and are dismissed; the valuation re-determinations, confiscation of the goods as prohibited/hazardous imports, and the consequential redemption fines and penalties imposed by the lower authorities are sustained. Issues:Appeal against Order-in-Appeal regarding import of used MFD Copiers without proper licenses and valuation disputes.Analysis:The appeals were directed against a common Order-in-Appeal dated 07.04.2017. The appellant had imported used MFD Copiers from Sharjah, UAE, and USA, which were classified as hazardous waste under the Foreign Trade Policy. The goods arrived without load port Chartered Engineer Certificate and proper license, leading to confiscation, fine, and penalty imposition. The value declared in the Bill of Entry was enhanced by the Adjudicating Authority, and duty liability was calculated. The appeals were rejected by the First Appellate Authority upholding the Order-in-Original.The main contention raised by the appellant was the inconsistency in valuation by the Chartered Engineer, arguing for a reduction in redemption fine and penalty. The Departmental Representative supported the lower authorities' findings. The challenge primarily focused on the valuation enhancement based on the Chartered Engineer's certificate. The circular No. 25/2015 regarding inspection reports by overseas Chartered Engineers was not followed, leading to rejection of the declared value. The First Appellate Authority's findings on valuation were deemed correct and legally sound, not warranting interference.The rejection of the declared value was justified due to non-compliance with load port inspection requirements. The Chartered Engineer's valuation was considered appropriate, and the appellant's arguments against it were dismissed. The goods were held as prohibited due to import violations, justifying confiscation. The Impugned Order was upheld as correct and legal, leading to the rejection of the appeals. The judgment was pronounced at the conclusion of the hearing.