PALLAV ENTERPRISES Vs. COMMR. OF CUS. (APPEALS), HYDERABAD

JUDGEMENT

(1.) BOTH these appeals raises common question of law and facts, hence, they are taken up together for disposal as per law.

(2.) THESE appeals arises from Order -in -Appeal Nos. 75 and 76/2005 (H -II) Cus. dated 12 -9 -2005. The Additional Commissioner enhance the value of Computer Monitors and P -III systems imported by the appellants vide their Bill of Entry 2526 dated 12 -7 -2005 from a total value of GBP 5974.15 declared to Rs. 10,29,861/ - and in respect of Bill of Entry No. 2571 dated 27 -7 -2005 from the total value is US $ 10560 declared to Rs. 10,50,105/ -. The goods were confiscated under Section 111(d) of Customs Act, 1962 for violation of EXIM Policy with an option to redeem the goods at redemption fine of Rs. 2.5 lakh and penalty of Rs. 75,000/ - in respect of Order -in -Appeal No. 75/2005 and redemption fine of Rs. 2.5 lakh and penalty of Rs. 80,000/ - in respect of Order -in -Appeal No. 76/2005. The appellants have challenged the enhancement of valuation as well as confiscation and imposition of penalty. The department had adopted Rules 5 to 8 and assessed the goods on the basis of the Chartered Engineers value. This has been challenged on the ground that the department cannot challenge the assessment arrived at by them without any proper evidence and the Chartered Engineers valuation cannot be accepted as true and correct.

(3.) THE learned counsel submits that the issue has now been resolved in the case of M/s. Motor Industries Co. Ltd. (Now M/s. Bosch Ltd.) v. CC vide Civil Appeal No. 7179/2002 by Apex Court vide their order dated 23 -4 -2008 [2003 (157) E.L.T. A150 (S.C.)]. The Apex Court has held that in respect of second -hand machineries also the department cannot straightaway proceed to assess the goods under Rules 5 to 8 of the Customs (Valuation) Rules by rejecting the transaction value. The Apex Court has held that transaction value has to be accepted in absence of any contemporaneous evidence. They relied on the earlier ruling rendered by their court in Eicher Tractors Ltd. v. CC, Mumbai - 2000 (122) E.L.T. 321 (S.C.) = 2000 Supp. (2) J.T. 562 = 2001 (1) SCC 315; Tolin Rubbers Pvt. Ltd. v. CC, Cochin - 2004 (163) E.L.T. 289 (S.C.); CC, Calcutta v. South India Television (P) Ltd. - 2007 (214) E.L.T. 3 (S.C.) and an unreported judgment of their own court in the case of CC v. J. D. Orgochem Ltd. rendered in Civil Appeal No. 5843/2006 decided on 10 -4 -2008 [2008 (226) E.L.T. 9 (S.C.)]. The earlier rulings given by the Apex Court confirming the valuation arrived at on the basis of Chartered Engineers valuation has not been agreed to by the Apex Court in the case of Motor Industries case and the earlier judgment in Ruqmini Ram Raghav Spinners Pvt. Ltd. v. CC, Chennai - 1998 (103) E.L.T. 366 has been deferred to. The learned counsel submits that the Motor Industries Co. Ltd. (supra) judgment is based on large number of earlier judgments of Apex Court which has presidential value and requires to be accepted. He also relied on large number of Tribunal rulings and submitted a paper book. He submits that the valuation in terms of transaction value has to be accepted and that the fine and penalty has to be reduced to 10% and 5% as held by the Tribunal in the following cases.