ZAZMAN EXPORTS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) DISPUTE is with regard to import of 6 Nos. of second hand Rubber Sole Direct Vulcanizing Presses and 1 number used pre -heater for vulcanizing presses. The clearance of these goods were sought from the Madras Customs vide Bill of Entry No. 226909 dated 8 -7 -1999. At the time of import second hand machinery was not permitted to be imported under OGL. Appellant, therefore, required a specific import licence. On account of their inability to produce the same, the goods have been confiscated under Section 111(d) of the Customs Act. The Adjudication also took the view that, the goods being second hand, invoice value cannot be straightaway accepted, as there is no standard price available for enabling comparison. The adjudicating authority, therefore, fixed the value after giving a depreciation of 70% from the value of original machinery at 10,000 indicated in the certificate of the Chartered Engineer, which accompanied the goods. Therefore, the adjudicating authority also held that the value of the goods had been misdeclared, making the goods liable to confiscation under Section 111(m) of the Customs Act as well. In the light of these findings, the Commissioner confiscated the goods with an option to redeem the same on payment of fine of Rs. 2.75 lakhs. He also imposed a penalty of Rs. 30,000/ - on the appellant. Assessment of the goods to Customs Duty at a value of Rs. 13,21,697/ - was also ordered as against the declared value of Rs. 2,11,476/ -.

(2.) ARGUING the appeal today the ld. representative of the appellant has submitted that the appellant had applied to the DGFT before import for issue of a licence for the import of the goods and have since been given the said licence. The licence permits the import of 15 Nos. of machinery at a value of over Rs. 4.6 lakhs and it also covers "goods already shipped/arrived". He submits that as the import remains regularized under the licence, confiscation of the goods for violation of Section 111(d) of the Customs Act and imposition of penalty have become unjustified. With regard to valuation of the goods it was submitted that the machines were about 20 years old at the time of their import. Therefore, limiting the depreciation to 70% was not correct. He also submitted that the transaction value should be the basis for assessment to Customs Duty. Reference in this context was made to the decision of the Tribunal in the case of Sree Rajendra Mills Ltd. v. CCE, Madras reported in 1996 (12) CXLT (Trib) Cus -18.

(3.) THE ld. DR submitted that the confiscation of the goods was justified at the time of their import as the appellant failed to produce the import licence. The valuation also could not be faulted as the price indicated in the Chartered Engineer's Certificate was taken as the basis. He also submitted that the valuation has been done on a sound principle or granting depreciation as normally allowed from the original value. He also pointed out that in the adjudication proceedings the representative of the appellant had conceded that the value may be enhanced.