B. Ravichandran ORDER
B. Ravichandran, Member (T)
1. The appeal is against the order dated 5-5-2011 of Commissioner of Customs, Jodhpur (Jaipur). The brief facts of the case are that the appellants have imported five old and used printing machines of Heidelberg make from Finland. The declared assessable value is Rs. 15,36,600/-. The Revenue entertained a view that the assessable value is not correct and accordingly initiated proceedings for enhancing and refixing the assessable value. The Commissioner vide the impugned order fixed the assessable value at Rs. 50,75,000/-. The appellants are contesting the impugned order mainly on the following grounds:
(a) All the printing machines were made in 1982 or thereabout. The import was made in 2010. They have submitted the inspection report of the Finland exporter of the machines. The goods were examined by the importer before shipment and the price was settled and paid through bank.
(b) These printing machines, though in good condition, are outdated and there is no set standards for fixing the value in the absence of the actual value at the time of manufacture.
(c) The department followed very arbitrary and vague calculations to arrive at a rough estimate of value which is against the principles laid-down under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The reliance placed on an alert issued in 2008 by DRI and certain informations taken from private commercial portals in internet cannot be a legal basis for arriving at the value.
2. Ld. DR supported the findings of the lower authority and stated that the exact year of manufacture of three machines were not available. Based on DRI alert and also certain information available in the internet, the original authority fixed the value in terms of Rule 9 of the Valuation Rules.
3. Heard both the sides and perused the records.
4. We have carefully considered the allegation made in the show cause notice and the findings of the original authority. In fact, the original authority in his finding simply recorded that the documents (invoice and bill of entry) submitted by the importer did not reflect the true value of the goods and hence could not be accepted as transaction value under Section 3. He concluded that Rule 9 which provides for residual method of valuation has to be applied to arrive at the reasonable value. He further recorded that in order to ascertain the contemporaneous import value of identical/similar machines a search was made in internet and the value was accordingly fixed.
5. We find that the above reasoning and finding of the original authority is completely devoid of legal merit. First of all, the original authority did not record any reason for rejecting the invoice value. Apparently, he was guided by a general alert issued by the DRI in 2008 and also certain guidelines issued by the Board for assessment of used machinery vide Circular No. 4/2008-Cus. : MANU/CUCR/0008/2008, dated 12-2-2008. We find neither the alert nor the circular can substitute the legal provisions of Section 3 read with the Valuation Rules of 2007. Further, the lower authority invoked Rule 9 which talks about residual method of valuation. Here it has to be noted that the imported goods were very old and used. At least two machines are admittedly manufactured in 1982, i.e., before 28 years of import. The importer cannot be faulted for not producing the original price of the imported item at the time of their manufacture. It is not clear as to why the lower authority rejected the report given by the Chartered Engineer appointed by the department. The forensic test done also categorically stated that there is no tempering with any label of the machines. In spite of all these facts the lower authority went ahead and did some search in internet and fixed the value for imported goods. We are not able to appreciate the legality of such decision. The Tribunal Commissioner v. B.C. Trading Company - 2008 (223) E.L.T. A133 (S.C.)<........