2005 (2) TMI 677

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....rance of the machinery was sought under an EPCG licence issued by the Foreign Trade Development Officer, Madras. This licence had permitted to import "one set of Murata Mach Coner Type 7-II, 60 drums, Magazine type year 1986, Uster D4-MK 20 Electronic yarn cleaner, Auto doffer 2 heads, Air Splicer Gl, MMM System, LUWa D-type below cleaner, 5" Traverse cheese take-up machine Serial No. 86sX 100090 complete with standard accessories" up to a value limit of US $ 60,000 (Rs. 21,42,000/-). In the above Bill of Entry, the importer declared the assessable value of the above machinery as Rs. 21,63,420/-, which was supported by the invoices raised on them by the Japanese supplier. This invoice also indicated that the goods were supplied as per order....

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..... The authorities also held the goods liable for confiscation under Section 111(m) of the Customs Act and also held the importer liable for penalty under Section 112 of the Act, on the ground of misdeclaration of value of the goods. As the importer required the machinery urgently for the purpose of production to meet export obligation under the EPCG scheme, they provisionally accepted the department's proposal as to the valuation of the goods. Accordingly, they obtained clearance of the goods on execution of bond and production of Bank Guarantee for Rs. 5 lakhs, apart from payment of duty on the assessable value of Rs. 31,26,985/- proposed by the department. Subsequently, the department issued a show cause notice to the assessee for enhance....

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....d the same was equal to EPCG licence value of US $ 60,000. Hence there was no value in excess of the licence value and hence no question of assessment on merits. Ld. Commissioner erroneously compared the subject goods with incomparable goods for the purpose of valuation. The machinery covered by the contemporaneous Bill of Entry was of 1981 make and was much older than the machinery imported by the appellants. Therefore, the valuation done by the Commissioner on the subject machinery was contrary to the settled principles of valuation. Ld. Consultant relied on the Tribunal's decision in Gujarat Ambuja Cements Ltd. v. CCE, Ahmedabad - 2003 (157) E.L.T. 188 (Tri. - Del.) and the Supreme Court's judgment in Tolin Rubbers Pvt. Ltd. v. CC, Cochi....