CHANDRA ENTERPRISES AND ANR. Vs. CC

JUDGEMENT

(1.) ISSUES raised in these appeals are virtually identical, though appellants are different. Arguments on behalf of the appellants are identical. So, we consider it advantageous to dispose of them by this common order.

(2.) APPELLANTS imported "Heavy Melting Scrap". The consignment in relation to appeal No. C/187/99 -A was 19.17 metric tonnes valued at US $ 2587.95 covered by invoice No. BFS002 dated 29.5.1998. The goods covered in appeal C/188/99 -A were 11.690 metric tonnes valued US $ 2400.99 covered by invoice No. BFS001 dated 23.5.1998. On the import of the above mentioned goods, the importers paid duty on the declared value. On examination by the Customs authorities, it was revealed that in the first case there were 30 diesel engines of Nissan brand and 6 of Toyota brand. In the second case, there were 40 diesel engines of Nissan brand. On detecting the existence of these types of machines, notices were issued calling upon the importers to show cause why the value of the diesel engines should not be separately fixed, why they should not be confiscated under Section 111(d) and (m) of the Customs Act, 1962 and why penalty should not be imposed under Section 112(a) and Section 114A of the Customs Act, 1962. The notices further required the importers to show cause why the "Heavy Melting Scrap" imported along with the machines should not be confiscated under Section 119 of the Customs Act. In reply to the show cause notices, detail objections were filed by the importers. They were afforded personal hearing as well. After considering all their contentions, the adjudicating authority passed the following order in the first case:

(3.) LEARNED Counsel representing the appellants argued that the adjudicating authority and the Commissioner (Appeals) were not justified in rejecting the valuation report submitted by the Chartered Engineer who was deputed to value the machines at the instance of the department. The valuation report of the Chartered Engineer shows that the value of these engines comes to Rs. 4200.00 each. Duty should have been levied only on that value. It is his argument that authorities below were not justified in rejecting the valuation report submitted by the Engineer deputed by them. It is common knowledge that a car engine has got its own independent existence, independent of gear box and dynamo. So, in assessing the value of the engine, value of the gear box is an irrelevant matter. The Chartered Engineer in his report proceeds on the basis that the gear box is an integral part of the car engine and in finding out the value of the engine, the price of gear box has to be deducted. This is a fundamental error committed by him. In his report for arriving at the value of the engine at Rs. 4200.00, the method used by him is as follows: