ANISH KUMAR SPINNING MILLS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants had imported nine units of second -hand machinery viz. "Rieter C 1/3 Model Carding. Machines" and sought clearance thereof under a Bill of Entry dated 29 -9 -2003 wherein the value of the goods was declared as USD 27,000/ - (Rs. 12,42,000/ -) and its year of manufacture as 1994. On an examination by SUB, the machinery was found to be old and used. The Chartered Engineer, to whom the matter was referred by the Custom House, examined the goods and reported that the machinery had been used for 10 to 15 years. He also assessed its value as Rs. 32,40,000/ -. The Custom House also made enquiries with M/s. Rieter LMV Machinery Ltd., Coimbatore, which revealed that Rieter C 1/3 Model Carding Machine was last manufactured in 1982 -83 and the approximate value of the new machine was Rs. 14 lakhs. It thus appeared to the Customs authorities that the imported machinery was more than 10 years old, which could not be imported without specific import licence. The appellants could not produce any such licence. The authorities also felt that the goods had been grossly undervalued with intent to evade payment of Customs duty. They held the goods to be liable for confiscation under Section 111 and the importers (appellants) to be liable for penalty under Section 112 of the Customs Act, 1962. The Commissioner upheld this view and passed the following order : -

(2.) EXAMINED the records and heard both sides. The value of the secondhand machinery was declared by the importer as Rs. 12,42,000/ - and the year of manufacture of the goods was declared as 1994. In support of these declarations, the importer had produced a Certificate from the Chartered Engineer of the foreign supplier of the goods. That Certificate certified (i) that the year of manufacture of the machinery was 1994, (ii) the machinery was purchased by the appellants from a dealer dealing in used machinery, (iii) that the residual life of the machine was more than 10 -15 years, (iv) that the value of the machinery as on the date of its manufacture was US 7,000/ - and (v) that, as on the date of its sale as second -hand machine to the appellants, a value of US 3,000/ - was reasonable. The Commissioner did not accept this Certificate. He rejected the declared value for want of manufacturer's invoice or any other evidence. We note that the Commissioner has accepted the fact that the goods were imported from a dealer and not from a manufacturer, In respect of second -hand machinery imported from a dealer, it could not have been possible, in the normal course, for the importer to produce the manufacturer's invoice. This aspect, it appears, has been overlooked by the Commissioner. The Commissioner has also observed that there is no evidence from the importer in support of the declared value. This finding also does not appear to be sound inasmuch as the Certificate of the foreign supplier's Chartered Engineer had categorically certified that the value of US 3,000/ - per unit was reasonable. The adjudicating authority has rejected the transaction value of the goods on the basis of a Certificate of the domestic Chartered Engineer, which was obtained subsequent to the filing of the Bill of Entry. We find that the transaction value was supported by the foreign supplier's Chartered Engineer's Certificate, which evidence was rejected by the Commissioner for reasons which are not convincing. The department had no case that the foreign supplier's Chartered Engineer's Certificate was not genuine or authentic or that it was obtained fraudulently or that it was not relevant. The evidence in support of the transaction value, furnished by the importer through the said Certificate, has been rejected by the Commissioner on the basis of a subsequent opinion of another expert, which is not justifiable. The opinion of one expert cannot be rejected on the basis of that of another expert unless there is sufficient independent reason for such rejection. In this case, there is no such reason for rejecting the foreign supplier's Chartered Engineer's Certificate.

(3.) IT is also pertinent to note that, even after obtaining the domestic Chartered Engineer's opinion, the department made market enquiries, in which it was found that the value of the subject goods could be Rs. 14 lakhs as at the time of its manufacture. It is not known as to why the Commissioner did not rely on the market enquiry results to doubt the correctness of the domestic Chartered Engineer's valuation.