SCANTRANS INDIA PVT. LTD. Vs. CC (SEA)

JUDGEMENT

(1.) This appeal is directed against Order -in -Original No. 628/2003 dated 2.5.2003, by which the Ld. Commissioner has enhanced the assessable value of US 75,000 from the declared value of US 60,000 CIF. He has also confiscated the goods under Section 111(d) of the Customs Act, 1962. However, he allowed the importers an option to redeem the goods on payment of fine of Rs. 10,80,000 under Section 125 of the Customs Act, 1962. He has also imposed a penalty of Rs. 5,40,000 under Section 112(a) of the Customs Act, 1962.

(2.) Aggrieved by this order the appellants have come in appeal on the ground that the Commissioner has not rejected the transaction value in the impugned order and has not given any reasons for jacking up the price to US 75,000. They therefore submitted that the enhancement of value is in violation of Rule 4(2) of the Customs Valuation Rules, 1988. They also prayed that direction be issued to the respondent -Commissioner to re -fix the value accepting the invoice value as the basis of assessment and also for allowing abatement of duty on the basis of the findings of the insurance agency, which the appellant is expecting to receive shortly. They further submitted that the respondent -Commissioner has failed to quantify the extent of damage as per Section 22(2) of the Act. The Indian Chartered Engineer has taken US 2,06,500 as the value of the machine in the year of manufacture but he put the assessable value (CIF) as US 75,000. He has not taken into account the fact that 70% depreciation was due to be abated for arriving at the assessable value. The depreciated value will be US 61,950 whereas the transaction value as reflected in the invoice is US 60,000. Therefore, the certificate issued by the Indian Chartered Engineer is fully in favour of the appellant, the difference being marginal and hence there was no reason for rejecting the declared value. The Indian Chartered Engineer is not sure about the year of manufacture but only says "appears to be more than 10 years old" and has fixed the price at US 75,000. Even if the full depreciation (70%) is allowed on the original price, the net price should have come to US 61,950. He also submitted that seven year old machine is eligible for 70% depreciation and since the machinery under import is taken as more than ten years old by the respondent -Commissioner and since there was no reconditioning, the Indian Chartered Engineer should have recommended the acceptance of the declared value. They further submitted that the machinery under import as per the Chartered Engineer's certificate had certified that the "4 head unit had suffered a major damage in transit resulting in damaged container and impact received, parts necessitating major reconditioning, etc. Therefore, the extent of damage is substantial and this should have been quantified for the purpose of abatement of duty in accordance with the ratio prescribed under Section 22(2) of the Customs Act. They also relied on the judgment rendered in the case of Collector of Customs, Madras v. Sundaram Fasteners Ltd., 1996 (86) ELT 49 (T), wherein it was held that the goods damaged was examined by the Assistant Collector on request of importer but value of the damaged goods was not appraised. In that case independent survey was arranged by the importer, but notice was not given to the Assistant Collector. The Hon'ble Tribunal had ordered that the Surveyor's report has to be accepted as true and reasonable in the absence of any suggestion of manipulation or collusion therein and also in the absence of any technical opinion obtained by the department to challenge the report.

(3.) Appearing on behalf of the appellant Shri R. Ganesan, Adv. has reiterated the above submissions and further argued that there is no clear evidence to hold that the machine is more than ten years old and he wanted the Hon'ble Tribunal to extend the benefit of doubt to the appellant in the matter of age of the machine and considering the fact that the appellant is the actual user, the charge of violation of EXIM policy of importing a machine of more than ten years old may kindly be set aside. He therefore requested the order of confiscation and imposition of fine is unwarranted and he therefore prayed that the order of confiscation and imposition of fine and penalty may be set aside.