MEDAK RUBBER LIMITED Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THESE appeals are against Order -in -Appeal No. 114/96, dated 5 -7 -1996, wherein, the present appellants have agitated upon the issue of valuation of two second hand and used machines viz. Mixing Mill and six inches NRM Extruder. These were imported under two Bills of Entry both dated 21 -7 -1993. The importers had declared invoice value of the mixing mill as US 21,357 (CIF) and for the extruder US 24,921 (CIF). They had also produced a Chartered Engineer's certificate from USA who had certified the year of manufacture of the two machines, the value of equivalent new machinery in terms of US Dollar as well as that the negotiated price at which these machines were imported was found by the Chartered Engineer to be fair.

(2.) HEARD Shri A. Sundar Rajan, learned Advocate for the appellants who submits that the declared transaction value on the Bills of Entry were not accepted by the Custom House and instead straightaway Rule 8 of the Customs Valuation Rules was applied by giving periodical depreciations on the price of the new goods as estimated in the Chartered Engineer's certificate as catalogue price for these machines for the year of manufacture were not available on record. Learned Advocate submits that this rejection of the transaction value declared was not in terms of Section 14 read with Valuation Rules 4 (2) and 4(3) inasmuch as that there was no evidence led by the department to prove any fraud or any illegal extra payments made by the importer to the foreign exporter. Neither has the department led evidence of any contemporaneous import at higher price of identical machines. He, therefore, submits that the issue is already a covered one and cites the decision in the case of Rugmini Ram Raghav Spinners Pvt. Ltd. v. C.C. reported in 1998 (103) E.L.T. 366 (Tribunal) and in the Final Order No. 1560/98, dated 11 -8 -1998 [1999 (107) E.L.T. 94 (Tribunal)] passed by the South Zonal Bench of the Tribunal in the case of Essar Graphics (P) Ltd. In both these decisions, learned Advocate submits, it has been held that the transaction value supported by Chartered Engineer's certificate cannot be rejected without either contemporaneous imports at higher price or proof of fraud in transaction. Since either of these are not alleged b) the department, therefore, he submits that the transaction value declared or the Bills of Entry should be accepted.

(3.) HEARD Shri S. Kannan, learned JDR, who reiterates the Order -in -Appeal and submits that the system of valuing second hand machiner) by giving depreciation on the cost of new identical machinery was a well es tablished practise in all Custom Houses and, therefore, in this case no new procedure was followed. We have carefully considered the rival submissions and the records of the case. We find that the issue is no longer res integra as it is covered by the decisions noted above. We find that the facts with respect to the two machines under consideration before us is exactly the same as was considered in these two judgments inasmuch as that the second hand machinery prior to its im -port was inspected by the Chartered Engineer located abroad and the said Chartered Engineer has given a detailed certificate evidencing to the best of his ability and experience, the age of the machines, the operational capability of the machines, the fact that the machines were re -conditioned prior to their sale to the present appellants, the estimated international price of similar new machines and also the fact that the present transaction value on a consider -ation of the inspection of these machines appeared to be very reasonable to him. We find that in the decision of Rugmini Ram Raghav Spinners Pvt. Ltd. su -pra, this issue was considered in great depth in paras 10 to 13 and it was held as follows : -