ORDER
Jyoti Balasundaram, Vice-President
1. M/s. Schlumberger Asia Services Ltd., the appellants herein (hereinafter referred to as SASL India) are oil exploration contractors who imported high tech oil exploration tools under a Bill of Entry dated 8-2-1995 through Mumbai Sea Port, declaring the assessable value as Rs. 1,33,97,1177- and paid Customs duty of Rs. 40,19,135/- at the rate of 30%. As per the invoice dated 19-1-1995 filed along with the B/E, they had listed complete details of the goods but had given only a consolidated value without any individual break up. On investigation, document called Fixed Assets Report (FAR) generated by M/s. SASL Dubai (Headquarters office of SASL India) showing the details of the individual items and their respective values was recovered. On this basis, the value of imported goods found to be Rs. 2,80,24,445/-. Statement of Shri Sandeep Sachdcva, Operations Manager of SASL India was recorded on 25-1-2000 in which he stated that FAR was an internal accounting document, that the Gross Book Value (GBV) was the capitalised value as per their internal policy and GBV value would be the invoice value. He stated that GBV was arrived at by their Headquarters, based on the invoice shown against each individual item. Shri R. Sridhar, District Chief Accountant of the appellants stated that the FAR was generated monthly showing the Gross Book Value of the items declared in the invoice, that the value is as on date, and that a depreciation is claimed since the assets are used. He also agreed to pay the differential duty. The statement of Shri Sridhar was corroborated by Shri K.A. Krishna, Senior Logistics and material Supervisor of the appellant-company. On the basis of the above, it was alleged that this was a case of stock transfer and not actual sale by SASL, Dubai to SASL, India that the pricing is not on a principal to principal basis and does not reflect the correct transaction value in the normal course of trade but between related persons and that therefore, the provisions of Rule 4(2)(d) and Rule 8 of the Valuation Rules, 1988 will be attracted and that the proviso to Section 28(1) of the Customs Act would be applicable for the reason that the importers suppressed the actual value. Show cause notice was issued proposing adoption of the value shown as GBV in the FAR as the correct normal transaction value for the purpose of assessment to duty, proposing recovery of differential duty of Rs. 43,88,199/- together with interest under Section 28AB, proposing penalty under Section 112/114A for suppression and misdeclaration of value with intention to evade payment of appropriate duty and proposing confiscation of the imported items. The notice invoked the extended period of limitation under the proviso to Section 28(1) of the Customs Act. The notice was adjudicated by the Commissioner of Customs, Mumbai who upheld the charge of deliberate misdeclaration and suppression of value, valued the goods in terms of Rule 8 of the Customs Valuation Rules holding that GBV as shown in the monthly FAR was the assessable value. He, therefore, confirmed the demand under Section 28(1), imposed penalty of Rs. 50 lakhs under Section 111(a) and confiscated goods under Section 11(m) of the Customs Act with option to redeem them on payment of fine of Rs. 50 lakhs. He dropped the charge for levy of interest on the ground that Section 28AB under which interest was proposed to be recovered was not in the statute at the time of import. Hence this appeal.
2. We have heard both sides.
3. The contention of the appellants that since they had imported a whole unit and not individual items and therefore, the value of the individual items cannot be taken to represent the value of the unit as a whole is not tenable, as we find that the value of the entire unit viz. oil logging truck is lower than the total value of the parts used therein. However, the submission that the GBV cannot be adopted as it reflects price of the individual item as on the date of purchase and since several imported components mounted on the logging truck were purchased several years ago, it is the NBV which is to be adopted, has force as GBV in the FARs is the value of the new item purchased by Schlumberger at a particular date. Viewed in this context, the rejection of the NBV by the Adjudicating Authority on the ground that the NBV of impugned items is zero, is not correct. The appellants are correct in their submission that they are entitled to depreciation as per law (maximum 70% depreciation is permissible) as the imported items were used and not new.
3. On the question of limitation, we find that the same importer in the case of other import of similar items have given values of individual items whereas in this case they have given a consolidated value and sought to justify it on the ground that what was imported by them was a complete unit. Therefore, the extended period of limitation has rightly been invoked against them for misdeclaration and suppression of facts regarding value of the imported goods, with intent to evade payment of duty.
4. In the light of the above, while holding that duty is demandable from the appellants, we remand the case for re-quantification of duty after extending the benefit of depreciation in accordance with law. The issue of imposition of penalty is also left open for fresh determination by the Commissioner to whom we remand the case. As regards confiscation, while upholding the same, we direct re-determination of the quantum of redemption fine after arriving at the correct duty liability. Fresh orders shall be passed by the Commissioner after extending reasonable opportunity to the importers of being heard in their defence and producing details as to the date of purchase of the imported items.
5. The appeal is thus allowed by way of remand as above.