ORDER
T.K. Jayaraman, Member (T)
1. Revenue and the party have filed appeals against the Orders-in-Appeal mentioned in the above table, passed by the Commissioner of Customs (Appeals), Hyderabad.
2. Since the issue involved in all these appeals is common, we are taking up all these appeals for common disposal.
C/172 to 175/2005
3. The respondents imported used Computer Monitors and Power Cables. Revenue did not accept the value declared. The lower authority enhanced the value and held that the impugned goods are liable for confiscation for violation of EXIM Policy. The goods were released on payment of Redemption Fine. Penalty under Section 112(a) of the Customs Act was imposed. The respondents approached the Commissioner (Appeals). The Commissioner (Appeals) examined the issues involved. He held that there is no legal basis for enhancement of the value of the impugned goods. He relied on the decision of the Apex Court in the case of Eicher Tractors Ltd. v. CC . He further held that the adoption of NIDB values for the subject consignment is incorrect as the goods are of varying ages and in varying conditions.
4. The second issue involved is the requirement of a proper licence. The respondents, while importing the second hand goods, did not produce a valid licence. Hence, their liability to confiscation under Customs Act was upheld. In view of the above findings, the Commissioner (Appeals) reduced the Redemption Fine and Penalty.
5. Revenue has appealed against the impugned orders of the Commissioner (Appeals) on the following grounds:
(i) The learned Commissioner (Appeals) has dogmatically applied the ratio of the Apex Court’s judgment to the present cases, which involve import of used machinery. The learned Commissioner’s observation that the rejection of Transaction Value was done without the presence of a special circumstance particularised in Rule 4(2) of the Customs Valuation Rules is also misplaced. The learned Commissioner (A) failed to appreciate that the Transaction Value was in fact rejected for non-submission of certain documents and Rule 10(A)(1). Reliance was placed on this bench’s decision in the case of ACMI Industries decision vide Final Order No. 1832/SZB/2004 dated 12.10.2004 “Normally declared value cannot be rejected without a valid ground stated in Rule 4(2) of the Customs Valuation Rules. Nevertheless, in this case, we find that the goods are mis-declared. Once that happens, the declared value can be rejected and the value could be arrived at in accordance with the Customs Valuation Rules.” In this particular case, the Tribunal upheld the value arrived at by the Commissioner under Rule 8 of the Customs Valuation Rules based on London Metal Exchange Prices and stated that any reasonable method of arriving at the value of consignment once Transaction Value is rejected cannot be called as arbitrary.
(ii) Similarly, in these cases, there are certain mis-declarations of quantities, models and even goods. Hence, the rejection of Transaction Value appears to be proper. The observation of the Commissioner (A) that the NIDB data could not be adopted appears to be unrealistic in view of the large number of computer systems and components imported by the respondent. It is humanly impossible to arrive at value of each system/component with mathematical precision. The fact that the invoice submitted by the respondent at the time of import has also uniform value for the all the goods cannot be overruled.
(iii) Even though in two of the OIAs being contested now, the differential duty is less than Rs. 50,000/-, in view of the repeated imports by the same importer and the recurring nature of the issue, appeals are filed against the orders of the Commissioner (Appeals).
6. Sri K. Sambi Reddy, the learned JDR reiterated the Grounds of Appeal and emphasised that there was both mis-declaration of value and quantity and urged the Bench to restore the OIO.
7. Shri Vittal Shetty, the learned Advocate, appearing for the respondents, raised the following issues given in the Grounds of Cross-Objections.
(i) The impugned goods were second hand items from a trader, who procures items from various sources. They are not purchased from a manufacturer and, therefore, they draw their bills on the approximate average rate basis irrespective of the condition and usage of the goods since the goods imported are in bulk and the labour in the supplier’s country are expensive to arrive at a rate for each item separately. Moreover, the lower authority violated the Principles of Natural Justice as a copy of the document on NIDB data was not supplied to the respondents and no opportunity had been given to explain on the said data relied on and there is no speaking order in respect of the said data. The Customs have not disproved the veracity of the invoice, the value of the goods was remitted to the suppliers through authorized Banking channels by TT. There is no evidence of any further amount paid or payable towards the goods. Hence, the Commissioner (Appeals) has rightly accepted the transaction value of the import.
(ii) The adjudicating Authority, at no point of time, asked the respondent to furnish any further information by way of documents or other evidences as may be required under Rule 10(A)(1) and also did not inform the respondent that it has any doubts on the truth or accuracy of the value declared in relation to the imported goods. The Adjudicating Authority also did not intimate the respondent in writing, the grounds for doubting the truth or accuracy of the value declared and has also not provided any reasonable opportunity of being heard to take any decision under Rule 10(A)(1) of the Customs Valuation Rules 1988. Without complying with any of the above requirements, the appellants cannot now raise the contention that the Transaction Value was rejected for non-submission of certain documents under Rule 10(A)(1) as such contention will be arbitrary, totally against the Principles of Natural Justice, violative of the provisions of the Customs Act and Customs Valuation Rules.
8. We have gone through the records of the case carefully. The impugned goods are Computer Monitors and Power Cables of different sizes. It is seen that the impugned goods are not brand new but used. There is no evidence that the respondents have remitted additional amount apart from what has been shown in the invoice to the foreign suppliers. It is common knowledge that in respect of electronic goods, the advancement of technology is very rapid. As a result, the price of used goods comes down at a very fast rate. In these circumstances, relying on the NIDB data, which is normally given for new goods, may not be very appropriate. The Commissioner (Appeals)’s reliance on Eicher Tractor’s case is not mis-placed, if the circumstances particularised in Rule 4(2) of the Customs Valuation Rules cannot be pin-pointed. The Transaction Value can be rejected only in terms of Rule 10(A)(1). As rightly pointed out by the respondents, the procedure outlined in Rule 10(A)(1) has not been followed by the Revenue. In these circumstances, there is no basis for enhancement of Transaction Value. As regards mis-declaration of quantity, we find that the variation between the actual numbers and what is declared in the invoice is not much. In view of the fact that the goods are used junk, a slight variation is not of much consequence. Therefore, we do not find any strong grounds to interfere with the decision of the Commissioner (Appeals). Hence, we dismiss the appeals of the Revenue.
C/187/2005
9. In this appeal, the Party has challenged the OIA No. 11/2005 dated 28.02.2005 wherein the Commissioner (Appeals) has upheld the RF of Rs. 1,00,000/- and penalty of Rs. 25,000/- in spite of the fact that he has rejected the enhancement of value of the impugned goods. The contention of the party is that the penalty is excessive. We find that the total value of the goods in this case, as per the Bill of Entry, is Rs. 1,24,727/-. The original authority enhanced the above value to Rs. 8,00,000/- and imposed RF of Rs. 1,00,000/- and penalty of Rs. 25,000/-. Since enhancement of value has not been upheld, some consideration should have been shown for reducing the RF and penalty. In our view, the ends of justice would be met if the RF is reduced to Rs. 10,000/- and the penalty to Rs. 5,000/-. The appeal of the party is allowed to this extent.
(Pronounced in open Court on 26 APR 2006)