TaxTMI 
TaxTMI 
2013 (10) TMI 1329
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....details of the appeals are shown as below : Appeal No. Bill of Entry No. & Date Declared (CIF) Value (in Rs.) Assessed Value Confiscated Value OIO No. & Dt. R.F. (in Rs.) P.P. (in Rs.) Value acceptance Date (a) (b) (c) (d) (e) (f) (g) (h) (i) 282 8180148 dt. 10-10-12 12,29,224,94 14,35,193,87 14,20,503,03 245 dt. 1-10-12 2,84,,000/- 90,000 29-10-12 227 8365804 dt. 31-10-12 12,66,945,68 17,00,620,60 16,83,624,06 199 dt. 7-12-12 3,40,000/- 1,85,000 4-12-12 214 8466649 dt. 12-11-12 3,77,871,26 5,60,262,15 5,54,578,76 177 dt. 13-12-12 1,11,000/- 90,000 12-12- 12 210 8466644 dt. 12-11-12 2,75,818,44 3,51,842,28 3,48,236,29 176 dt. 13-12-12 70,000/- 80,000/- 12-12-12 150 8972043 dt. 8-1-13 38,43,867,43 52,66,348,21 52,13,376,77 66 dt. 7-2-13 10,43,000/- 3,91,000 4-2-13 313 7883094 dt. 7-9-12 6,25,154,75 6,31,406,30 7,93,491,87 285 dt. 10-10-12 1,60,000/- 80,000/- 3-10-12 294 8264413 dt. 19-10-12 6,32,132,38 9,43,044,88 9,33,726,77 278 dt. 20-11-12 1,87,00....
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.... confiscated under Section 111(d) & 111(m) of CA, 1962 and released on redemption fine under Section 125 and imposed penalty under Section 112(a) of CA, 1962 as referred in the subject order-in-originals. 3. The Lower Adjudicating Authority decided the matter on the following grounds :- (i) That, the old and used Old and Used Digital Multifunction Printer was restricted item as per the para 2.17 of Foreign Trade Policy 2009-20014 and paras 2.33 and 233A of HBP and could be imported only against valid specific license therefore said imported goods were liable for confiscation/penalty under Section 111(d) and 112(a) of CA, 1962. (ii) That, the appellant could not produce Load Port Chartered Engineer's certificate and could not be satisfied the department as to the extent of uses or non-uses of said machines after the sale but before export of said consignment therefore valuation under Rule 3 of Customs Valuation Rules, 2007 was not restored and Rule 9 of Customs Valuation Rules was applied. According to Standing Order No. 3/88 and 5/88, depreciation method was adopted as per suggestion of Chartered Engineer and found that ....
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.... redemption fine is approx 20% and penalty is approx 10% which contrary to the ratio of judgment of 2009 (240) E.L.T. 336 of Hon'ble Kerala HC and 2009 (235) E.L.T. 376 of CESTAT, Bangalore in respect of Navpad Enterprises. (viii) That, the findings of OIO is very clear that said goods were not found in market therefore no profit margin could be ascertained but even then Adjudicating Authority arbitrarily imposed redemption fine under Section 125 of CA, 1962 without any reason. (ix) That, appellant had not done any act or omission in relation to said imported goods rendering liable for confiscation therefore penalty under Section 112(a) not imposable. (x) That, appellant did not violated any provisions of Customs Act, 1962/Foreign Trade (Development & Regulation) Act or any law for the time being in force and OIO has been passed on the basis of surmise without any material on record to penalize the appellant. (xi) That, there is no violation of Section 111(d) and 111(m) therefore subject goods are not liable for confiscation and there is no question of invoking Section 112(a) of CA, 1962. (xii) That, the order pas....
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....e. "Old and Used Digital Multifunction Printer" were freely importable up to 28-2-2013 hence said imported goods were not liable to be confiscated under Section 111(d) of CA, 1962. 8. The lower adjudicating authority has observed in findings of OIO that said imported goods were examined in first check in presence of Chartered Engineer and Customs Officials. During examination, the make/model/quantity and country of origin were found as per declaration. The Board's Circular No. 4/2008-Customs, dated 12-2-2008 stipulates that if the other parameters of Section 14 of CA, 1962 are satisfied, the transaction value under Rule 3 of CVR, 2007 can he applied in the importation of second hand machinery sold for export. It means after selling for export, the subject goods should be immediately imported without any further uses abroad. However if transaction value under Rule 3 is rejected, valuation of second hand machinery can be done under Rule 9 of CVR, 2007. The lower adjudicating authority noted that the importer neither did submit load port charted engineer certificate nor satisfied fully to department as to the extent of usage at load port after sale before actual export therefo....
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....taway arrive at a notional value under Rule 9. (iv) It may thus be {3.} seen from the judicial decisions that, before redetermination of value of second-hand machinery under Rule 9, it is essential to reject the transaction value of Rule 3. There would be no difficulty in rejection of transaction value in those cases where the assessing officer is able to assail the documents like Chartered Engineer's Certificate, invoice, etc., as manipulated or fraudulently obtained. Similarly, there will also be no difficulty in rejection of transaction value in cases where the assessing officer proves that certain basic particulars like description, period of usage, extent of the re-conditioning, year of manufacture, model no., price when new, etc., are misdeclared either in the Chartered Engineer's Certificate or in the invoice. There will also be no difficulty in rejecting the transaction value in cases which are hit by the provisions to sub-rule (2) of Rule 3. Difficulties may however be faced in situations other than those described above. (v) {4} (i) Rule 12 empowers the Revenue not to determine the value of the imported goods on the basis of trans....
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....to that in the case of second-hand machinery, as explained hereinabove. (x) {7} In cases where the declared value is rejected, and assessable value is re-determined, the assessing officer shall issue a detailed speaking order, giving the reasons for such rejection, by invoking the provisions of Rule 12 or Rule 3(2), as appropriate, and giving the reasons for re-determination of value under appropriate provision. (xi) Guidelines; {8} (a) the assessing officers must insist on importers submitting a certificate issued by an independent Chartered Engineer or any equivalent in the country of supply, (b)xxxxx (c) In the absence of proper Load Port Certificate, a local Chartered Engineer's Certificate may be accepted. Each Custom House may consider issuing Public Notices giving names and addresses of Chartered Engineers, whom the trade can contact for issuance of CE Certificate. 10. The above C.B.E. & C. Circular 4/2008 is clear that 'declared value' can be rejected (a) if invoice/certificate of chartered engineer is manipulated/fraudulently obtained (b) if certain basic particulars of imported goods found to be misdeclared (c) if price is....
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....ar "A close reading of the local Chartered engineer certificate dated 23-3-2007 indicates that the said report has been issued after conducting "local market survey for value of this type of old goods." It is settled legal position that the value of the imported goods cannot be based on the value of the goods in the local market". There are no reasonable grounds/justification on record to reject the transaction value and enhancement of value based on Chartered Engineer's certificate by applying Valuation Rule 9 of CVR, 2007. Held by Hon'ble Tribunal (Delhi) in case 2013 (293) E.L.T. 243 (Tri.-Del.) CCE, Delhi v. Best Mega International that "difference between declared value and value of chartered engineer is very small as such no evidence has been produced by the Department that the declared transaction value is incorrect and/or that the respondent had made additional payment to the supplier over and above declared value. In view of these circumstances we are of the view that the allegation of misdeciaration of value is also without any basis and as such there is no infirmity in the order of the Commissioner (Appeals) on this point." 13. The appellant vide their letter (da....
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.... without any protest therefore I do not interfere in value enhancement and payment thereof. 1 find that appellant gave up his right of SCN/PH/OIO to avoid demurrage charges therefore value enhancement by Adjudicating Authority and acceptance by appellant cannot be reopened in appeal. 18. However I also find that there was no acceptance or consent of appellant for imposition of redemption fine under Section 111(d) & (m) and penalty under Section 112 of CA, 1962. Therefore imposition of fine and penalty without consent can be challenged in appeal. Since said imported goods were not restricted/prohibited goods under FTP/HBP/ITC/Customs law or any other law therefore confiscation under Section 111(d) is void and illegal as discussed in para 7 above. 19. Section 111(m) of the Customs Act provides for confiscation of the goods only if the goods declared in the bill of entry do not correspond in respect of the value or in any other material particular with the entry (bill of entry) made under the Act. In this case, the appellants had declared the goods correctly in description/quantity/value and classified them under proper chapter heading of Customs Tariff. Further, the C....
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....e and correct but as per practice of Kolkata Customs House and to avoid mounting demurrages we are accepting the enhanced value as suggested by the Government approved Chartered Engineer M/s. ELBI Consultancy (India) Private Ltd. We do not want any SCN, PH and A.O.xxxxxxxxxxx. We do request to take lenient view and release our consignment immediately to save the demurrage since this consignment is incurring detention and storage charges about Rs. 5000.00 per day from the date of entry of vessel." 21. In his consent letter appellant had not given any consent for confiscation under Section 111(d) CA, 1962 but acceptance of enhanced value was given to Department. Moreover in most of the imported items/model etc. the declared value of appellant is higher than depreciated value worked out by Chartered Engineer in column no. G&H table-2 but on notion it was enhanced by small amount in column no. (I) table-2 of OIO. Therefore there is no mala fide on record for undervaluation. The acceptance of enhanced value was not absolute but it was given only to avoid the mounting demurrages. In case 2008 (231) E.L.T. 318 (Tri.-Kolkata) Royal Enterprises v. Commissioner of Cus. (Port), Kolkat....
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....erefore, in the instant case, the provisions of Section 11l(m) are not attracted at all. Hon'ble Tribunal (Delhi) in case 2013 (293) E.L.T. 243 (Tri.-Del.) CCE, Delhi v. Best Mega International held that "difference between declared value and value of Chartered Engineer is very small as such no evidence has been produced by the Department that the declared transaction value is incorrect and/or that the respondent had made additional payment to the supplier over and above declared value. In view of these circumstances we are of the view that the allegation of misdeclaration of value is also without any basis and as such there is no infirmity in the order of the Commissioner (Appeals) on this point." 23. The case laws M/s. Navpad Enterprises - 2009 (235) E.L.T. 376 (Tri.-Bang.) affirmed by Hon'ble Kerala High Court and same stand taken by Hon'ble Tribunal, Kolkata in M/s. Sambhav Enterprises cited in OIO for imposition of fine/penalty upto tune of 10% and 5% is relevant when goods were imported against the restriction of EXIM Policy but in this subject matter said imported goods were not imported against any restriction but were freely importable upto 28-2-2013 as discussed a....