Declared Value of Second-Hand Machinery Cannot Be Enhanced Solely on Local Chartered Engineer Certificate: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench held that declared value of imported second-hand machinery cannot be enhanced solely on the basis of a local Chartered Engineer certificate when a valid Load Port Chartered Engineer certificate is available on record.

The appellant, Abirami Weaving Mills imported 20 used rapier looms and declared the transaction value based on the supplier, Bandung Sakura Textile Mills invoice number dated on 07.10.2015

The Respondent, the Commissioner of Customs, rejected the declared value and re-determined the value on the basis of a local Chartered Engineer’s certificate as there were deficiencies in the Load Port certificate with absence of certain details such as year of manufacture.

K. Ramya, the counsel for the appellant, contended that the transaction value under Section 14 of the Customs Act, 1962 must be accepted as there was no allegation of relationship between parties or extra consideration.

It was contented by the appellant counsel that the Load Port Chartered Engineer certificate contained all material particulars and was obtained prior to the issuance of the relevant circular requiring additional details.

Vineet Goyal, appeared as the counsel for the respondent, supported the findings in the orders of lower authorities.

P. Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that there was no dispute regarding the nature of goods being used machinery and both the Load Port as well as local Chartered Engineer certificates confirmed the same.

The Tribunal also noted that the only deficiency pointed out was non-mention of year of manufacture. The Tribunal held that rejection of the Load Port Chartered Engineer certificate without valid reasons and reliance solely on the local Chartered Engineers report is not justified in law.

In light of facts and circumstances, the Tribunal held that redetermination of value based solely on the local Chartered Engineer’s certificate is unsustainable and set aside the impugned order.

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