2024 (3) TMI 1248 - AT - Customs

Customs Department cannot re-assess goods for valuation after final clearance without challenging original assessment order

CESTAT Chandigarh held that Customs Department cannot re-assess goods for valuation after final clearance. Second-hand printing machines were initially ... Valuation - Validity of Re-determination of Value - Goods have already been cleared from the port of import after examination and enhancement of value - Valuation based on Chartered Engineer Certificate - Import of second-hand printing machines - No opportunity to cross-examine the Chartered Engineer - seizure - provisionally released on execution of Bond and Bank Guarantee - confiscation - differential duty - penalty - HELD THAT:- We are of the considered opinion that the Department cannot re-assess the impugned goods for the second time. We find that the investigating officers did not question the Chartered Engineer, who issued the certificate on import and have also not questioned the proper officers, who allowed the clearance of Bill of Entry after the initial re-assessment. Department has not brought forth any omission or commission on the part of the Chartered Engineer or the proper officer so as to necessitate the revision of the assessment order passed in respect of the impugned goods. The assessment orders, which have attained finality, have also not been challenged; the same were neither stayed nor set aside by a competent higher forum or authority. Thus, we find that the Department is not within their right to subject same machines to another examination and assessment. We find that Department has seriously erred in re-determining the value of the impugned goods; the value of which is already enhanced at the time of import. We find that CVR 2007 does not give any scope for such re-assessment particularly when there was no challenge to the assessment made at the time of import by way of filing any appeal. Moreover, we find that whatever is construed as evidence in the impugned case pertains to import of some other machine albeit by the same importer. We find that evidence in one case cannot be a basis for confirmation of offence in some other case; such a confirmation defies all established principles of law. The impugned order passed without giving an opportunity to the appellants to cross-examine the Chartered Engineer is a serious violation of principles of natural justice. An order passed in this manner cannot be held to be legal, proper and justified. We find that the Revenue has not made out any case for redetermination of the declared value which was already enhanced at the time of import. Therefore, there is no violation of any of the provisions of the Customs Act by the appellant-importer and thus, the goods are not liable for confiscation and no differential duty is payable by the appellant importer. Consequentially, no penalty is imposable either on the appellant-importer or their directors. Thus, the impugned order is set aside and the all the appeals are allowed, with consequential relief, if any, as per law. Issues Involved:1. Legality of the re-determination of the value of second-hand printing machines.2. Admissibility of Chartered Engineer Certificates.3. Applicability of Board's Circular and Customs Valuation Rules.4. Violation of principles of natural justice.5. Imposition of penalties on the appellant and their directors.Summary:1. Legality of the re-determination of the value of second-hand printing machines:The appellants, importers of second-hand printing machines, challenged the Order-in-Appeal dated 28.8.2012, which confirmed the re-determination of value, differential duty, and penalties imposed by the Additional Commissioner. The Tribunal found that the Department could not reassess the goods for the second time after they were cleared from the Port of import following an initial re-assessment and enhancement of value. The assessment orders had attained finality and were neither stayed nor set aside by a competent higher forum or authority.2. Admissibility of Chartered Engineer Certificates:The Department's reliance on a second Chartered Engineer certificate for re-determination of value was found improper. The Tribunal noted that the investigating officers did not question the Chartered Engineer who issued the certificate on import, nor the proper officers who allowed the clearance of the Bill of Entry after the initial re-assessment. This omission invalidated the Department's case for revaluation.3. Applicability of Board's Circular and Customs Valuation Rules:The Tribunal agreed with the appellants that the Board's Circular was no longer relevant with the introduction of new Customs Valuation Rules, 2007. The method of assessment of second-hand machinery by following the depreciation method was incorrect, as upheld by the Apex Court in the case of Tolin Rubbers Pvt. Ltd. The Tribunal emphasized that the CVR 2007 does not permit re-assessment once the value has attained finality.4. Violation of principles of natural justice:The Tribunal held that the impugned order was passed without giving the appellants an opportunity to cross-examine the Chartered Engineer, constituting a serious violation of principles of natural justice. Such an order cannot be considered legal, proper, or justified.5. Imposition of penalties on the appellant and their directors:The Tribunal found no violation of any provisions of the Customs Act by the appellant-importer, thus concluding that the goods were not liable for confiscation and no differential duty was payable. Consequently, no penalty was imposable on the appellant-importer or their directors.Conclusion:The impugned order was set aside, and all appeals were allowed with consequential relief as per law. The Tribunal pronounced the order in the open court on 28/03/2024.