TaxTMI 
TaxTMI 
1998 (8) TMI 250
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....offset printing machine. The impugned order discards the transaction value of Australian Dollars 47,000 on the grounds that the Chartered Engineer's certificate supporting the invoice value is not reliable, as it shows year of manufacture as 1972 instead of 1973, as ascertained by Deptt. from German manufacturer. 2. Learned SDR, Shri Victor Thiagaraj argues that as age of machine has direct nexus to its fair value, therefore the said error in the said certificate is sufficient grounds to reject the invoice (transaction) value. This is further supported by fact, so presses ld. SDR, that as per ITC policy AM 82-87, Para 25, where value is over Rs. 1 crore, a certificate from designated authority (Appendix XI-A of Hand book) is necessary....
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....re not aware that department would allege it to be more than Rs. 1 crore; and (f) while transactions value is accepted for other 2 items imported together with this one, only transaction value of this is disputed. (g) Learned Advocates cites 1992 (58) E.L.T. 137 (Tribunal) and submits that this is final law as in appeal to Supreme Court in 1993 (67) E.L.T. 209 (S.C.), deptt. did not raise issue of valuation. (h) He also cites 1998 (100) E.L.T. 126 (Tribunal) in case of Chem Crown (I) Ltd. (i) He further cites the case laws of Debabrata Ghosh in 1993 (68) E.L.T. 551 (Cal.) wherein it has been clearly laid down that Revenue cannot discard Rules 4 to 7 and straightway go to Rule 8 ibid for valuation of second-hand machi....
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....n 14 as well as Rules 3 & 4 of Customs Valuation Rules, we find that there is no specific exclusion to the effect that a transaction value of second-hand machinery is not acceptable particularly because no exactly comparable imports can be found or exist. Therefore, the concept of Transaction Value in Rules 3 & 4 are clearly applicable to second-hand goods also. For the same reason, ld. SDR's contention that cases cited by ld. Advocate stand distinguished being for new goods is not acceptable. (d) The facts of this case do not show that any of the conditions as specified in sub-rules (a) to (d) of Rule 4(2) are attracted in this case to allow discarding of the transaction value. These read as under :- "(2) The transaction value ....
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....ill & Magor cited in impugned order and relied upon by ld. SDR is of pre-1988 vintage, when these Rules were not in existence and is, therefore, irrelevant after their commencement; (g) that merely because the Chartered Engineer's certificate errs on date (year) of manufacture, this by itself does not render the invoice fraudulent. It has been argued that age of the machine has nexus to its value. We have no quarrel with this as a principle of valuation under Rule 8. But since this is not a reason prescribed under Rule 4 to reject the transaction value, therefore, it cannot be legally held that wrong age in such a certificate, ipso facto, vitiates the invoice value. The negotiated price was arrived at after the MD Shri Shetty, physica....
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....es against the very argument of ld. SDR that there is a nexus between age and value. The said order thereafter, goes on to base the valuation on value of imports of similar machines minus depreciation. In the present case, the impugned order clearly holds that no such comparative price is available. On this count also, the said order needs to be distinguished and cannot be relied upon by us; (j) in Order No. 1947/96, dated 9-10-1996, in this very case, wherein this Tribunal had remanded the matter to ld. Commissioner for de novo consideration, it has been observed as under on Page 5 : "If all second-hand machineries are to be assessed based on the depreciation method then the valuation rules would lose their validity. Before resortin....
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.... either contemporaneous imports of like goods at higher values being shown or proof of the transaction not being in normal course of international trade etc." Again, findings in Para 13 thereof as under are also relevant to this case and is reproduced below :- "We find that unless Rule 4 is clearly held as not applicable due to either fraud etc. or contemporaneous imports at higher prices, we cannot proceed to apply any other subsequent Rule, let alone jump staightaway to Rule 8, merely because the manufacturer's price for original goods is available. Section 14 read with Rule 4 recognises the primacy of transaction value, whether it be new goods or second-hand machines. What is material is that the transaction be successfully challenged ....