TaxTMI 
TaxTMI 
2021 (6) TMI 919
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....ith permanent equipment and accessories, store, spares and consumables under Bill of Entry No. 9479981 dated 27.4.2017 by the importer M/s KNK Ship Management. On the basis of various statements recorded during the course of investigation of alleged mis-declaration by the importer, it is alleged that the appellant, M/s Sunrich Logistics Pvt. Ltd., being the Customs Broker under CBLR, 2013 failed to intimate the relation between Shri Anil Vohra, Chartered Engineer and the Customs Broker, to the customs authorities at the time of inspection, valuation and assessment of the used Tug 'KNK Disha' and thereby contravened the provisions 11(d), 11(e) and 11(f) of CBLR, 2013. Also, in the show-cause notice it is proposed forfeiture of security deposit and revocation of the license under regulation 18 of the CBLR, 2013. An Inquiry Officer was appointed and necessary inquiry was conducted under the CBLR, 2013 by the Inquiry Officer. After a detailed inquiry, the Inquiry Officer arrived at the conclusion that violation of Regulations 11(d), 11(e) and 11(f) of CBLR, 2013 by the appellant are not proved. However, on adjudication, the learned Commissioner disagreed with the inquiry report and hel....
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....s business in respect of the subject import. Except rendering professional services in the matter, the Chartered Engineer has not derived any extra pecuniary benefit from the importers or the appellant. He has further submitted that it was the impression of the appellant that despite the Chartered Engineer being an independent consultant of another related company of the appellant, who is not an employee in the said company, hence there is no conflict of interest with the present importer and the consignment imported. Further, Shri Anil Vohra is an empanelled Chartered Engineer with the Mumbai Customs to examine and provide valuation report is thus a qualified neutral party for the job, hence no violation was committed by them. He has vehemently argued that the valuation report prepared by Shri Anil Vohra is not challenged by the Department alleging bias or incorrect. 4. He has submitted that the observation of the adjudicating authority that the F, G & H card holder employees of the appellant have admitted to the breach of regulations by not intimating the conflict of interest as alleged in the show-cause notice is not correct inasmuch as during the course of cross-examination th....
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....ugh another related company M/s Admiral Shipping Ltd., a fact not brought to the knowledge of the Department, therefore, the inquiry reports which observed that the charges of violations of regulations 11(d), 11(e) and 11(f) not proved, is not correct and rightly discarded by the adjudicating authority and consequently charges are held proved. 8. Heard both sides and perused the records. 9. The issue for consideration in the present appeal is whether the appellant - Customs Broker contravened the Regulations 11(d), 11(e) and 11(f) of CBLR, 2013. The facts not in dispute are that M.s KNK Ship Management imported one unit of used second hand self propelled Tug 'KNK Disha' against Bill of Entry No. 9479981 dated 27.4.2017. For clearance of the same, they have engaged the appellant to complete all the formalities with the Custom House including engaging empanelled Chartered Engineer Shri Anil Vohra to assess the value of the used self propelled Tug 'KNK Disha'. On the basis of the valuation report of the Chartered Engineer Shri Anil Vohra and the documents namely, purchase invoice, agreement etc. furnished by the importer M/s KNK Ship Management, the appellant submitted papers with t....
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....the said witnesses. Also, it is submitted that by the Ld. Advocate that the adjudicating authority had misinterpreted the meaning of neutral party in Board's Circular and application of the same to the facts of the present case is out of context. 12. To analyze the arguments advanced, it is necessary to refer the Board's Circular No. 25/2015-Cus dated 15.10.2015, which provides guidelines for valuation of second hand machinery in suppression of earlier clarification issued by the Board. The relevant portion is reproduced as below: - "Circular No. 25/2015-Cus., dated 15-10-2015 F.No. 450/2/2015 - Dir( Cus )( Pt) Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Valuation of second hand machinery - Regarding. The Board has received representations from other Ministries, trade bodies and traders regarding issues arising from the interpretation of Board's Circular No. 4/2008-Cus., dated 12th February 2008 [2008 (222) E.L.T. (T15)]. The circular requires that field formations rely upon a chartered engineer's inspection report while valuing imports of second hand machinery and that inspection/ appraise....
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....uire any importer to have an inspection/appraisement report of second hand machinery from a particular Chartered Engineer The importer shall be free to select any chartered engineer, empanelled by the Custom House for the respective class of goods, if so required." ............................................. 13. The first paragraph of the said Circular clearly explains the objects for laying down revised guidelines in suppression of old one; the purposes was to bring uniformity in the method of valuation/assessment of second had machinery imported adopted at different Customs Houses. 14. It seems that the adjudicating authority in the impugned order merely carried away by the use of the expression 'neutral party' mentioned in para 9 of the said Circular but not examined its contextual use by reading the circular as a whole. A plain reading of para 9 of the Circular dated 15.10.2015, makes it crystal clear that the procedure for computing the value of second hand machinery should reflect the commercial reality resulting into a fair value and needs to be arrived through uniform practice by all custom houses. To achieve such uniformity, it has been emphasized that inspection/ ap....