TaxTMI 
TaxTMI 
2010 (12) TMI 226
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Mumbai 2000 (122) ELT 321 (SC) The learned DR Ms. Indira Sisupal supports the impugned orders for the reasons stated therein. She cites the following decisions of the Honrable Supreme Court in support of the Departments case:- (i)Collector of Customs,CalcuttaVs. Sanjay Chandiram 1995 (77) ELT 241 (SC) (ii)Radhey Shyam Ratanlal Vs. Commissioner of Customs 2009 (238) ELT 14 (SC) 2.The impugned imports were made throughChennaiPortby the appellants who are traders based in Ahmedabad from a trading company inSingapore. The brief facts of the case as stated by the appellants are as follows:- 1.M/s. Viral Copier Services, 20, Hare Krislrna Complex, City Gold Cinema, Ashram Road, Ahmedabad 380 009, the appellants herein, are importers and traders in various office equipments. In the course of their business, they imported a consignment of photocopier parts / components during February 2003 through thePortofChennai. The goods were supplied by M/s.Atronic Trading,Singaporeand the total value for the goods was US$ 4515 (C&F). The appellants claimed assessment of these goods as component parts of photocopiers and filed Bill of Entry No.490522 dated 14.5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he original lower authority to decide the issue within a period of three weeks from the date of submission of the report by the second Chartered Engineer. 5.Consequent to the directions given by the High Court, the appellants arranged for inspection of the goods by M/s. Best Mulyankan Consultants Ltd on 25.7.2003. After inspecting the goods, the above Chartered Engineer issued a certificate dated 28.7.2003 stating that the sub assemblies import do not have any punching mark or specification showing the year of manufacture and the brand name and that in the present condition, these have to be assembled with other missing parts. and put into operation before their condition can be explained. It was further stated that several parts required for completing the copier are missing and that in the condition these are imported, the sub assemblies cannot be called a photocopier. The Chartered Engineers arrived at a value of US$ 15050 (C&F) for the above goods. Subsequent to the receipt of the report by the above Chartered Engineers, the original lower authority issued a show cause notice dated 11.8.2003 alleging that the 43 Nos. sub assemblies imported under cover of the above bill of e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of India Ltd. 6.We further find that the appellants had approached the Honrable Madras High Court in this case before issue of the show-cause notice and the said High Court in its order dated 18.7.2003 had directed the appellants to get a report from M/s. Best Mulyankan Consultants Ltd., Mumbai and submit the same to the customs authorities. The order of the Honrable Madras High Court dated 18.7.2003 is reproduced below:- Petitions under Article 226 of the Constitution of India, praying for issuance of a writ of mandamus, as stated therein. ORDER These writ petitions have been filed for issuance of a writ of mandamus to direct the respondents to release the goods of the petitioners on the value declared by them vide their respective Bills of Entry. 2.Heard the learned counsel for the petitioners and also the respondents. 3.On going through the material available on record and also hearing the arguments advanced by the learned counsel, I direct the petitioners to get a report from M/s. Best Mulyankan Consultants Limited, 307-A, Best Commercial Complex, Beside Andheri Railway Station, Mumbai, and submit the same to the respondents within a period of one week from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tificate dated 13.06.2003 issued by M/s. Superintendence Company ofIndia(Pvt.) Ltd. Chennai appeared to be quite specific. The model numbers appeared to have been identified by them with the help of a technical expert. This report stated that the machines were found in fairly complete condition except few external parts without which also machines work. It appeared that the nature of the goods had been assessed by M/s. Superintendence CompanyIndia(Pvt.) Ltd., Chennai after taking into consideration of the missing minor parts. 13.Compared with the Report issued by M/s. Superintendence Company India (Pvt.) Ltd., Chennai the Report issued by M/s. Best Mulyankan Consultants Pvt. Ltd., Mumbai appeared to have the following limitations and inconsistencies : - 13.1 Against para 26 of the Report, it was stated the the mainframes of the machines are not having any punching marks/specifications of the machines which is expected to be pertinent to demonstrate that the machine is for which model and it is manufactured in which year etc. In the absence of the punching mark /specification M/s. Best Mulyankan Consultants (Pvt.) Ltd., Mumbai, could not reconfirm the model numbers ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... goods as mentioned above and also without ascertaining the utility/functional ability and efficiency. Even the gradation of the machines of heavy duty etc., appeared to have been done by him only based on dimensions. 14.On comparison of the two Reports it thus appeared to emerge that the Report issued by M/s. Superintendence Company ofIndia(Pvt.) Ltd., Chennai was more specific in that the model numbers had been categorically identified with the help of a technical expert. The Report issued by M/s. Best Mulyankan Consultants Pvt. Ltd., Mumbai appeared to be deficient and appeared to have inherent contradictions which were difficult to reconcile as highlighted in the preceeding paragraphs. It appeared that probably since M/s. Best Mulyankan Consultants (Pvt.) Ltd., Mumbai did not have the assistance of a technical expert well-versed with photocopying machines who could identify the model numbers, they could not reconfirm the model numbers which had been identified by M/s. Superintendence Company ofIndia(Pvt.) Ltd., Chennai along with a technical expert. AgainstPara26 of their Report. M/s Best Mulyankan Consultants Pvt. Ltd., Mumbai had clearly stated that the mainframe of the ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....scription of the goods, it appeared that the declared value could not be accepted as transaction value under Rule 4 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. Therefore, the valuation has to be done under subsequent rules by proceeding sequentially. Since the goods under import were old and used goods the same could not be compared to similar such imports and hence the value could not be determined under Rule 5, 6 & 7 of Customs Valuation Rules, 1988. Therefore, it appeared that the value had to be determined under Rule 8 of Customs Valuation Rules, 1988 using reasonable means. 17.The declared value of the goods was only US$4515 C&F (Rs.2,14,463/-) whereas the value appraised by M/s. Best Mulyankan Consultants Pvt. Ltd., Mumbai was US$ 15,050 C&F (Rs.7,14,875). The value appraised by the Chartered Engineer M/s. Superintendence Company ofIndia(Pvt.) Ltd., Chennai was US$ 26750 FOB (Rs. 12,70,625). It appeared from the valuation reports of these two Reports that the importer appeared to have grossly misdeclared the value of the goods in order to evade duty. The Report of M/s. Best Mulyankan Consultants Ltd., Mumbai appeared to be not specific and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....act that certain components were missing. 20.Valuation of the imported goods needs to be done taking into consideration the prevailing international prices for specific models of old and used photocopiers and allowing a deduction to the parts that are missing. The present case against the importer was in pursuance of an intelligence received by the department from the Directorate General of Central Excise Intelligence, Chennai (DGCEI) that certain importers were importing old and used photocopiers by mis-declaring as old used components/mainframes and thereby evading huge amount of duty. During the course of investigations, DGCEI had recovered certain incriminating documents from certain other importers who were adopting the said modus operandi. The recovered incriminating documents included certain price negotiation correspondences for specific models of Old/Used Photocopiers. A comparison of the prevailing international prices of the relevant models of old/used photocopiers based on the evidence recovered by DGCEI vis-`-vis that fixed by M/s Superintendence &Co.is given below. (Current Exchange Rate: 1USD = Rs.46.35; 1UK # = Rs.74.85) Sl. No. Model No.  ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the value of the goods under Rule 8 of the Customs Valuation (DOPIG) Rules, 1988. The value of the goods so determined worked out to US$27450 C&F (Rs.13,03,875/-). The C1F value of the imported goods worked out to USS 27759 CIF (Rs. 13,18,5521- C1F). The duty attempted to he evaded worked out to Rs. 11,09,305/- as shown in the working sheet annexed to the Show Cause Notice issued to the importer. It thus appeared to emerge very clearly that the importer had deliberately mis-declared the description and value of the goods with an intention to evade duty both on the account of valuation and classification. 8.We find that the concurrent finding of the lower appellate authority upholds the finding of the original authority in regard to misdeclaration of the impugned goods as well as misdeclaration of the value. Specially when the Honrable Madras High Court had not specifically directed the customs authorities to accept the report of M/s. Best Mulyankan Consultants Ltd. in preference to the other report of M/s. Superintendence Company of India Pvt. Ltd. and had given the liberty to the authorities below to proceed further in accordance with law, and the authorities below have followe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7) ELT 241 (SC) which held that Rule 3 of the Customs Valuation Rules, 1988 providing for acceptance of transaction value is not a rule of invariable application regardless of the circumstances. In cases of misdeclaration the irresistible conclusion would be that if the real value of the imported goods has not been shown in the invoices, then the declared value cannot be taken as the transaction value. She has also drawn our attention to the Honrable Supreme Courts decision in the case of Radhey Shyam Ratanlal Vs. Commissioner of Customs 2009 (238) ELT 14 (SC) which holds that deemed value under Section 14(1) of the Customs Act, 1962 would prevail when price declared does not reflect the price at which the imported or like goods are ordinarily sold. These two decisions of the Honrable Supreme Court provide adequate amplitude to the customs authorities to reject declared values on the face of misdeclaration of the goods and/or when the values are abnormally low. Customs authorities cannot be precluded from determining correct values for the purpose of charging customs duty and cannot be compelled to accept abnormally low values declared by the importers as has been done by the....