The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed confiscation under Section 111(d) of Customs Act, 1962and noted that ‘Plate leveler’ of ‘1942 vintage’ are capital goods and freely importable.
In this appeal of M/s Jindal Saw Limited, concerned with import of ‘old and used parts of plate leveler machines’, is against the order of the Commissioner of Customs (Appeals), upholding the redetermination of value by recourse to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, confiscation of the goods under section 111(d) of Customs Act, 1962 for not being in possession of valid licence for import.
It was submitted by the counsel for the appellant that the ‘plate leveler’ had been manufactured by M/s Stemco in 1942 and that it had been dismantled as it could not be used as such; he clarified that the goods are nothing but scrap and that the agreement between M/s Jindal Saw USA, LLC and the importer was thus for sale at the prevailing price of ‘market scrap’ as reflected in sale contract dated 18th June 2009.
According to the counsel, the certification from chartered engineer, M/s Steel Metallurgical Consultants, Inc., furnished by them at the time of import clearly indicates this and that customs authorities have not established that the relationship with supplier has influenced the price.
According to the Authorized Representative, the declared value is based on sale contract with related person and sought to be sustained by report of overseas chartered engineer which has estimated current value of scrap without taking into account the cost of disassembling of the machinery and it was further contended that the reports indicate that the parts of the machinery are serviceable and can hardly be ‘scrap’ as claimed by the appellant.
The appellant has claimed that the impugned goods, though ‘old and used’ and of ‘1942 vintage’, is, nonetheless ‘plate leveler’; this has been incorporated in the bill of entry and has not been alienated in submissions before us. The claim of the appellant is that value has not been properly ascertained and, by default, their declaration, though at par with ‘scrap’, should be accepted as the machine has been imported in disassembled condition and unfit for use as such.
A Two-Member Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “The goods are admittedly of ‘1942 vintage’ and it is seen that paragraph 2.31 of the Foreign Trade Policy restricts ‘second hand goods other than capital goods’ and, as it is not the case of customs authorities that these are not ‘capital goods’, the impugned goods would be freely importable. Consequently, confiscation under section 111(d) of Customs Act, 1962 lacks authority of law.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
