TaxTMI 
TaxTMI 
2026 (3) TMI 113
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....ich were imported from Germany. Both the category of items viz., articles of base metal and flanges of plastics were described as per constituent material and these were classified under Customs Tariff Item (CTI) 8487 9000 and CTI 3926 9099, respectively, of the Customs Tariff Act, 1975 with declared assessable value of Euro 10387.50 FOB with freight element of 1650 USD, insurance of Rs.539/- / Rs.10,03,355/-. The importer had requested for first check examination of imported goods by jurisdictional customs authorities at the port of import, before assessment of such goods, as part of the goods were of 'used' nature and partly of unused goods. 2.3 The customs officers posted in the Docks examination area had examined the imported goods covered under the impugned B/E under the supervision of Deputy Commissioner of Customs, Docks and reported that the consignment consisted of old & used second-hand nuts, bolts, pipe fittings, V joints etc.; articles of plastics are also found old and used and it requires NOC from Pollution Control Board and PSIC. Since, all the goods were found to be old & used other than capital goods, they stated that it is not allowed for import. Further, the C....
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....efore the assessment. 3.3 He further submitted that the estimated value of goods by the Chartered Engineer given in his certificate is at Euro 16,500 (FOB); however, the original authority had re-determined the assessable value on the basis of contemporaneous imports, without even disclosing the details of such imports and its value, whether it was the lowest of the comparable value as per Rule 5(3) of the Customs Valuation (Determination of Valuation of Imported Goods) Rules, 2007. Therefore, he pleaded that such re-determination of value by the original authority, which was upheld by the first appellate authority has no force of law. 3.4 In support their stand, he had relied upon the following judgements of the various judicial forums: (i) RKG International Private Limited Vs. Commissioner of Customs (Export), Nhava Sheva - 2018 (362) E.L.T. 162 (Tri. - Mumbai) (ii) Makali Metals Private Limited Vs. Commissioner of Customs, Raigad - 2001 (138) E.L.T. 607 (Tri. - Kolkata) (iii) Commissioner of Customs, Mumbai Vs. B. Arunkumar's International Limited 2004 (177) E.L.T. 152 (Tri. - Mumbai) 4. Learned Authorized Representative appearing for the Reve....
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....alue of the consignment was Rs.10,03,355/- and the duty leviable thereon was Rs.2,60,233/-. Further, I find that the unit FOB value was declared to be EUR 0.589980 per kgs & EUR 0.426471 per kgs. Further, I find that the said bill of entry was filed under 1st check and the docks officials examined the goods under supervision of DC/DOCKS. On examination of the goods, I find that the same was found to be old & used second hand nuts, bolt, pipe fittings V joints, wheels etc. There was no visible re-conditioning noticed, year of Manufacture was as per C.E. Certificate, residual life was as per C.E. Certificate and DV appeared to be low and may be taken as per C.E. Certificate. Further, I find that Item No. 2 of B/E i.e. Articles of Plastic are also found old & used and it requires NOC from Pollution Control Board and PSIC. Since all the goods were found to be old & used other than capital goods & it is not allowed for Import. Further, I find that the imported items are not scraps and they should not fall under the purview of mandatory no objection from Pollution Control Board and as such policy Circular no. 20/2002-2007 dated 12.03.2003 is not applicable. 10. Further, I find t....
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....thority had reasons to doubt the correctness of the declared value as provided under Rule 12 of the Customs Valuation (Determination of Valuation of Imported Goods) Rules, 2007. Considering the said expert opinion rendered by the Chartered Engineer, who being an expert in the field had given the estimated value of the impugned goods after inspecting the physical condition of the goods. An expert in the field of scrap / old & used goods can seldom fail to give inappropriate value of the goods. I therefore, find giving due consideration to the Chartered Engineer's Certificate, the adjudicating authority proceeded to redetermine the declared value to EUR 16,500.00 (FOB) as estimated by the Chartered Engineer. 11. I find the appellant has also contended that the estimated value of EUR 16,500.00 (FOB) given by the Chartered Engineer is on the basis of new equivalent tool room parts/spares. On detailed reading of the Chartered Engineer's Certificate, it can be distinguished that the Chartered Engineer, only after considering the condition of the goods and in comparison of the new equivalent spares had arrived at the estimated value of the goods. I therefore, find no subs....
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....rtain difficulties in applying Rule 4 or 5 of CVR, 2007. These difficulties arise from the fact that the goods being valued are used second hand machinery/goods, and it may be difficult to find data relating to sales of such goods to India, which could be considered identical or similar and meet all the requirements of Rules 4 and 5 of the CVR, 2007. Similarly, application of Rule 7 of CVR, 2007 whereunder goods being appraised are valued on the basis of subsequent sales of identical or similar goods in India, may also not be possible because the goods being appraised are imported for use rather than for resale, and it is difficult to find such sale of identical or similar goods. Furthermore, Rule 8 ibid deals with the computed value method which is based, among other things, on the cost of production of the goods being appraised plus an amount for profit and general expenses, which is not possible to calculate assessable value of second hand goods, based upon the cost of production. Thus, there are difficulties faced by the customs officers in appraising the value of second hand goods under Rule 3 ibid, and where there may be difficulty in applying Rules 4 to 8 of CVR, 2007, which....
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....lowed general engineering principles. 3.0 Chartered Engineer's comments 3.1 Present condition and estimated residual life We carried out the physical inspection of the goods and we found various parts/spares like nuts, bolts, motor, motor belts, elbows, pipe fittings, V-joints, cables, metal wire, plastic pipes, grinding wheels etc. Our keen observation reveals that most of the tool room parts/spares/ accessories were found used one. For our assessment purpose we have considered lump sum amount for both used and unused tool room parts/scares/accessories. We have considered only used / unused article of base metal i.e., value EUR 10,097.50 for our assessment purpose. Looking at the physical condition of the tool room parts/ spares/accessories, we opine that the used parts/spares/accessories would fetch at least 80% of the original estimated residual life whereas the unused parts/spares/ accessories would fetch original estimated residual life. 3.2 Present sale price If we reckoned the condition of the C.G., as tabulated on page #2 and compare them with new equivalent tool room parts/spares/accessories, they make an estimated ....
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....reasonable cause for enhancement of value on the basis of chartered engineer's certificate discarding the transaction value and set aside the impugned therein. The relevant paragraph of the said order is quoted below: "4.1 From the above opinion of the Chartered Engineer, it can be seen that the Chartered Engineer nowhere disputed about the description of the goods declared by the appellant and more or less he agreed that the description was made correctly in the Bill of Entry. The Chartered Engineer also opined that the imported goods can either be used for melting purposes. Therefore, the goods declared as heavy melting scrap is not incorrect. It is also clear that the railway scrap consisting of axles cannot be used as axles. The same can be used only as a melting scrap or by turning, cutting and grinding. Therefore, the goods cannot be used as such. Therefore, there is no basis for making allegation against the appellant regarding the misdeclaration of the goods and the goods imported does not fall under the restricted category. Therefore, the same is not liable for confiscation. As regards the enhancement of the value, the apprehension of the Revenue is that since the....