TaxTMI 
TaxTMI 
2023 (9) TMI 1199
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....of its use and; b. physical condition of the parts of the machine did not show any sign of use thereof and the devices were new and unused. 1.1 The goods were further examined by two empanelled Charter Engineers namely Shri NJ Lalwani and Shri Anwar Y Kukad in presence of the Superintendent (Docks). 1.2 Shri Lalwani, in his report No.NJI/Kandla/16-208 dated 16.9.2016 observed that The YOM is March 2014. The main frame, moving parts, foundation are found new and unused and no part of machine is found used. Mould/ die holding holes are in perfect condition. No scratches on painting or any part of machine. Considering the status of moving parts, non-moving parts, hoses, fittings, paintings and accessories, the machine has apparently not been used. My considered opinion machine is old but unused. The present international market value may be USD 135000/- 1.3 Shri Kukad in his report No.AYK:INSP:0439:2016 observed that machine in good condition as unused and new, balance life span is more than 15 years subject to suitable installation and maintenance. The estimated value of identical machine in international market may be USD 130000/-. The value of new machine of this ....
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....e process of law the adjudicating authority vide the impugned order rejected the value declared at Rs.66,73,375/-(USD 98,500/-) of the impugned goods declared under Bill of entry no.6524432 dated 29.8.2016 and re-determined its value to Rs.88,07,500/-(USD 1.30,000/-) under Customs valuation (Determination of value of imported goods, Rules, 2007. Ordered confiscation of the impugned goods under Section 111(m) of the Customs Act, 1962 and as the goods were released provisionally allowed to redeem in lieu of confiscation by imposing redemption fine of Rs.15,00,000/- under Section 125 of Customs act, 1962. Confirmed differential duty of Rs.5,64,012/- under Section 28(4) along with interest under Section 28AA of Customs Act, 1962. Imposed penalty of Rs.56,000/- under Section 112(a) on the appellant. Enforced the bond executed by the appellant at the time of the provisional release of the goods. 1.9 Being aggrieved by the said order the appellant filed an appeal, Commissioner (Appeals) accepted the order-in-original in totality. Being aggrieved by the order of Commissioner (Appeals), Appellants have filed the present appeal. 2. Learned Advocate for the appellant submits that the ma....
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....Rules. Clearly, the present notice does not follow Rule 3 in both these respects. Clearly, therefore, the very basis of the notice is not tenable and, therefore, the notice is required to be set aside with consequential relief. 2.5 It is submitted that the imported machine was intended for the purpose of study of design of the machine. Appellant are also engaged in the manufacture of similar machine and, therefore, for the purpose of understanding design of other manufacturers, this machine was imported. After studying the design, the machine is to be re-exported. This was already communicated to the department under our letter dated 26-8-2016. 2.6 Even in the bill of entry, it was specifically stated that this was temporary import. Considering the purpose behind the import and considering the fact that the machine is old and used, the transaction value cannot be rejected. Furthermore, in the statement of Shri Rajesh Soni, the value was arrived at after depreciation. The machine is of 2014 and the initial value was US$ 1,41,939/- and the value shown by us is after deducting the depreciation. Thus, the basis of the value adopted by us is reasonable, logical and in accordance w....
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....pection, I could not inspect the aforesaid machine as it was covered by hard wooden box lying inside the container which was got opened slightly from the one corner. So I relied upon the documents so produced before me by the CB. Now, on being called by the Superintendent (DE) and DC (DE) for proper inspection of the said goods on the same day i.e. 02-09-2016, I have carefully and thoroughly examined the said machine after removing wooden box from the front side in such a way that it could be examined properly. After thoroughly examination in the presence of the above said officers of Customs (DE) and Customs Broker representative, I observed that the aforesaid imported machine is unused and new and it was used only on trial run. I, therefore, submit my detailed examination report in prescribed Form B which is as under and my earlier issued certificate as mentioned above may please be treated as cancelled." 2.12 The reason shown for change in the opinion, obviously, is factually incorrect. It is not possible to accept the explanation that the Chartered Engineer gave opinion without examining the goods. Further, the reason given for change in the opinion is that the mach....
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....is opportunity was not availed by the department. 2.17 It can be seen that though not a technical expert, the Superintendent Mr. Vaghela, conducting examination on 15-09-2016 for half an hour, could clearly observe that (1) plastic granules were lying in the machine, (2) oil & grease was found in certain places (3) Residua of molten plastic materials in barrel area (4) scratch mark/dent on ram (5) corrosion on various metallic parts (6) condition of threads inside mold fixing plate showing that mold has ben fitted and removed after use (7) General condition panels and distribution devises seems having heat pressure etc, which showed that the machine was used. Thus, even a cursory examination by non-expert, but an experienced departmental officer, show clear fact of the machine having been used. This contradicts not only Docks Examination Officer's opinion but also contradicts experts' opinion on 16-09-2016. 2.18 Further he also submitted that the report of expert on re-examination was shown to both the departmental experts, but they refused the same. That in normal course the machine was meant to be re-exported after 6 months in which case they were entitled to draw b....
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....efore the Superintendent (DE) and DC (DE) another inspection carried out, the CE observed that imported machine is unused and new and it was used only on trial run; the facts of docks examination officer and the facts of charter engineer certificate contradict. the docks examination officer would have occasion to call for expert opinion only if prima facie doubt arose. Thus probability is more that the first opinion of the CE is correct and whereas the second opinion was made under pressure from department; during examination by the Docks examination officer nor by the expert, the CHA or the importer was present. I find that the adjudicating authority has correctly observed at para 13 of the impugned order that the goods were examined by Shri Mihir T Mistry, Government Registered Valuer, under his report No.CIM/2016-17/035A dated 2.9.2016. The Govt. Regd. Valuer has certified as under: "It is to hereby submit that earlier I had issued one certificate in form B on dated 2.9.2016 as prescribed by CBEC vide Circular No.25/2016 dated 15.10.2015 certifying that the machine/goods viz. Injection Moulding machine imported vide Bill of entry No.6524432 dated 29.8.2016 are used with....
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....at the said machine has been used for trial runs only The second noticeable statement of the CE also incorporates the fact that the said machine has been used for trial runs only which leads to the belief that no actual production has been carried out on the said machinery so as to declare as USED. I find that the reasons on which the CE has retracted are valid, logical and judicious inasmuch as visual examination was necessary so as to give proper report. Further, on going through the report No.CIM/2016-17/035A dated 2.9.2016 issued by Shri Mihir T Mistry. Government Registered Valuer, I find that the valuer has categorically indicated that the examination of the cargo was done in the presence of the officers of Customs (DE) and Customs broker representative. The Customs broker is appointed by the importer for clearance of his goods, and hence, his presence during the examination will be treated as presence of the importer. Therefore, his contention that the examination was without the appellant's presence is not tenable. 3.4 I find that further inspection was carried out on the direction of Additional Commissioner (Customs) Mundra, to clear out the contradictory opinion, i....
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....as allowed to carry out the examination of the machinery and they submitted the report dated 29.11.2016 for the examination carried out on 22.11.2016 which appears to be a question answer session between the importer and Chartered Engineer. The report speaks that the consignor is a machinery manufacturer and not an end user of this type of machinery. Further, during the survey/ examination, the surveyors/ Engineers had asked certain questions to the consignees, to one of the question the importers replied that "This machine is manufactured by other manufacturer, and procured for testing/ trial run and for study of design. This machine was run for trial run and for study of design in USA and our supplier had given us the testing reports of trial run and we forward the same to you. This report contains 14 number of pages which show the various data gathered while doing the trial run of the machines." The said report does not allow me to comprehend as to whether the machine has been literally used for production runs or trial runs, which altogether carry a vast difference in terms of interpretations. Hence the earlier reports issued by the CE's relatively appear to be more correct....
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....duction." Thus adjudicating authority has correctly held that though the machine is old, of model March-2014, yet it is unused and new or at the best may have been used for some trial runs and not as such employed for commercial production. I do not find infirmity in the impugned order and no interference is called for in the order passed by the adjudicating authority. 3.9 The appellant further contended that transaction 'value has not been rejected by the adjudicating authority, therefore order of value enhancement as well as confiscation, is incorrect; notice does not show why the transaction value is not correct, merely saying that the machine appears to have not been used, and therefore, may have higher value, is not sufficient basis for rejecting the transaction value, They relied on case law: Divine International 2016(338)ELT142(Tri.-Del); for rejection of the transaction value valuation provisions has to be followed, value of the Chartered Valuer cannot be adopted. The value shall be determined by proceeding sequentially through Rule 4 to 9 of the Valuation rules, the notice did not follow Rule 3, so the notice is not tenable and liable to be set aside; the machine is....
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.... since the machine was never deployed for "Commercial production". As opined by the two in-panel Chartered Engineers the value of machine considering the old technology and conditions may be arrived at USD 1,30,000/- and the same may be accepted as DV fair, as also accepted by the importer. Hence, the value of such imported goods enhanced from the declared price to one by the Chartered Engineer is legally tenable for the purpose of leviability of Customs duty. 3.11 The adjudicating authority has correctly observed in para 27 and para 28 of the impugned goods that Section 111(m) clause reads as "The following goods brought from a place outside India shall be liable to confiscation (m) any goods which donot correspond in respect of value or in any other particular with the entry made under this Act." The goods imported by the appellant is laible for confiscation in terms of Section 111(m) since the same has been mis-declared by the importer with reference to the description and the value. The goods are liable for confiscation it becomes imperative to impose the penalties under Section 112(a)(ii) of the Customs Act, 1962. In view of the above, I do not find infirmity in the impugne....
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....that the goods even as per the party were used only to some extent, stated to be in some trial runs. The examination reports relied upon by the department, atleast some of them do mention possibility of such use. The authorities below have ousted the description of the party as given in the bill of entry on the ground that use in trial run cannot be equated with commercial use. While agreeing with the department that extent of usage can have impact on valuation, we are not inclined to go with the department's view point that the same were not as per the description of expression 'used' of the appellant for the following two reasons: (1) When there is conflict in the departmental examination reports of the machine being new or used to some extent in trial run, the benefit of doubt of such conflicting views must go in favour of the appellant. Therefore, even if the use was for trial run as mentioned by Shri Mihir T Mistri, Government Registered valuer, vide his letter dated 02.09.2016, and as given by Superintendent (Docks) as Member of Committee in his report dated 15.09.2016, same is sufficient to consider that the machine was used and therefore the description given by th....