2004 (97) ECC 770 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(A)

Ms. Jyoti Balasundaram, Vice President and Shri V.K. Agrawal, Member (T)

Goodyear South Asia Tyres Pvt. Ltd.

Versus

Commissioner of Customs, Nhava Sheva

Appeal No. C/499/2003-NB(A)

[Arising out of Order-in-Original No. 11/2003 dated 28.7.03 passed by Commissioner of Customs (Import), Sheva, Maharashtra]

Final Order No. 1001/2004-NB-A, dt. 4.8.2004, Certified on 5.10.2004

Customs Act, 1962

Section 14 -- Import -- Assessable value -- Customs -- Misdeclaration in year of manufacture in respect of two machines out of 9 machines imported -- Mere reconditioning and re-furbishing of machines, which were manufactured in 1970, would not make them manufactured in 1998/2000.

PRESENT :

Shri R. Parthasarthy, Adv. for the appellant.

Shri R.C. Sankhla, SDR for the respondent.

Per : V.K. Agrawal

M/s. Goodyear South Asia Tyres Pvt. Ltd. have filed this Appeal against the enhancement of the assessment value of the goods imported by them and against demand of duty and penalty.

2. Shri R. Parthasarthy, learned Advocate, submitted that the Appellants, a subsidiary of M/s. Goodyear Tyre & Rubber Company, USA imported nine numbers of used tyre curing press from M/s. Goodyear Philippines Inc., which is also a subsidiary of M/s. Goodyear, USA; that they had declared the assessable value as Rs. 2,66,62,491; that the goods were examined on first check basis by the Customs Authority who found certain discrepancies with regard to the year of manufacture and they also wanted to enhance the value of the extent of 30 to 35% approximately; that they waived the issue of show cause notice and appeared for personal hearing before the Commissioner on 11.7.2003; that after the personal hearing the Commissioner has constituted a panel consisting of the officers of Machinery Expert, Group Appraiser, Docks Appraiser and Assistant Commissioner of Customs (Docks), who has inspected the consignment in question on 19.7.2003; that based on the recommendations of the said Panel, the Commissioner passed the impugned order holding that out of 9 machines, two machines at Sl.No. 3 & 4 of the Bill of Entry dated 9.5.03 were more than 10 years old and their import without a licence was not permitted; that the Commissioner also enhanced the value to Rs. 4,66,91,722.

The learned Advocate, further, submitted that though the appellants had written letter dated 25.7.03 accepting the value, it was written involuntarily since the goods were lying with the Customs and without payment of Customs duty on the enhanced value, the Custom authorities were not allowing clearance of the goods; that as per the transfer policy between the Goodyear group of Companies, the used capital equipment are transferred either at net book value or at 30% of original acquisition cost; that in the present matter M/s. Good Year Philippines had sold the goods to the Appellants at Net Book value which represents the transaction value between import and export; that it is well settled that transaction value is to be accepted even in respect of import of second-hand machinery; that the invoice value has been discarded on the ground of mis-declaration of the year of manufacture in respect of two machines out of 9 machines imported by them; that if that were to be so, the Customs ought to have accepted the value mentioned in the invoice in respect of remaining seven machines in question. Finally, he submitted that the method of determining the value of the imported goods had not been indicated in the impugned Order or made known to them at any point of time; that, therefore the value cannot be enhanced. Regarding two machines being more than 10 years old, he submitted that substantial reconditioning and refurnishing of these machine had taken place in 1998-2000 and, therefore, both the supplier and the Chartered Engineer had certified the year of manufacture as 1998; that therefore, the year of manufacture has to be taken as 1998/2000 only; that in any case the penalty and the redemption fine imposed on them are excessive.

3. Countering the argument Shri R.C. Shankhla, learned Senior Departmental Representative, drew our attention to Appellant's letter dated 25.7.03 addressed to the Commissioner of Customs (Imports) wherein it has been mentioned by them that "At the time of re-examination and reappraisal of the subject machines I was associated completely alongwith Panel Members comprising of Assistant Commissioner of Customs Imports (Docks), Appraiser (Docks), Export AO and Appraising Officer JCH Customs on 19.7.2003. We accept the valuation arrived at the time of re-examination". The learned Senior Departmental Representative submitted that by no stretch of imagination this letter written on their letter-head can be called involuntary letter; that they had agreed completely with the recommendations of the Panel and have accepted the valuation; that in view of this it is not open to them to challenge the value of the goods ordered by the Commissioner at the appeal stage; that further, they have also mis-declared the year of manufacture of the machines at Sl. No. 3 & 4; that the said machines were bearing the plate of year 1970; that merely re-furbishing of two machines will not change the year of manufacture of the machines.

4. We have considered the submissions of both the sides. We agree with the learned Senior Departmental Representative that mere re-conditioning and re-furbishing of machines, which were manufactured in 1970, would not make them manufactured in 1998/2000. It is not denied by the Appellants that the year of manufacture of these machines is 1970. This has been mentioned by them themselves in Para C 2 of their Grounds of Appeal. Accordingly, the finding of the Commissioner in this regard is upheld. We also agree with the learned Senior Departmental Representative that the letter dated 25.7.2003 in which they had agreed with the finding of the Panel and had accepted the valuation arrived at the time of re-examination cannot be treated as an involuntary letter. There is nothing in the letter to suggest that it was taken from them under duress or coercion. In view of these circumstances, it cannot also be claimed by them that the method of determining the value of the imported goods has not been disclosed to them. We, therefore, uphold the enhancement of the value and confiscation ordered by the Commissioner. We, however, agree with the learned Advocate that both the penalty and the redemption fine imposed on them are on the higher side. Interest of justice will be met if the appellants are directed to pay the redemption fine of Rs. 25 lakhs instead of Rs. 90 lakhs and penalty of Rs. 5 lakhs. We accordingly, reduce the redemption fine to Rs. Twentyfive lakhs and penalty to Rs. 5 lakhs. The Appeal is thus partially allowed.

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