Charge of undervaluation not tenable when valuation done by two Chartered Engineers and declaration given in B/E accepted

PJ/Case Laws/2012-13/1488

Case:- KEI INDUSTRIES LTD. Versus COMMR. OF CUS. (EXPORT), NHAVA SHEVA

Citation:- 2013 (288) E.L.T. 391 (Tri. – Mumbai)

Brief Facts:-The appellant imported one Hippotronic make 375KVs 10000 KVs Routine Tester Model R 375-10000. The value of the said goods was declared and the supplier was Gauder. S.A. Rue De La Revision, 93 B-4032 Chenee (Liege) Belgium. The goods were examined and found that machine seems to be new one. Therefore, to ascertain the true price of the machine, a chartered accountant was engaged namely, Best Mulyankan Consultants Ltd. The Chartered Accountant examined the impugned machine and in his report, he submitted that invoice price shown by the appellant seems to be correct. But the value of the new machine at that time was 6.50 Lakhs Euros. Therefore, the adjudication took place and the value of the imported machine was enhanced to 6.50 Lakhs Euros. Against the said order, the appellant is in appeal.

Appellant Contentions:-The Appellant contention that one of the traders in Belgium put an advertisement on net that he has located a supplier in Malaysia of the impugned machine and on the basis of the advertisement, the appellants negotiated with the price with the Belgium trader and negotiated the price of the impugned machine. The appellant imported the machine and declared the negotiated price in the Bill of Entry. At the time of import, the Belgium supplier also provided a Chartered Engineer certificate which shows that negotiated price is a reasonable price for the said machine. Then the Chartered Accountant appointed by the department also indicated the price is reasonable. Therefore, the loading of value by the ld. Commissioner is not sustainable.

Respondent Contentions:-The Respondent contended that the machine is not a second-hand machine but it is new one as it was never put to use. Therefore, the loading of the value given by the ld. Commissioner is reasonable and is to be accepted.

Reasoning of Judgment:-We have considered submission on both sides. It is an admitted fact that the machine was declared by the appellant as second-hand machine in the Bill of Entry and the said declaration has been accepted by the adjudicating authority. Therefore, the issue raised by the ld. AR that the machine is new one is not sustainable as the same has not been challenged by them in appeal. Further, we find that as it is a second-hand machine and has imported by the appellant on negotiated price from the Belgium trader. The invoice price shown by the appellants has also been supported by two Chartered Engineers one from the supplier side and one appointed by the Revenue to ascertain the price of the imported machine. As both the Chartered Engineers have certified that the price of the imported machine in the invoice is reasonable. In view of these observations, the charge of undervaluation is not sustainable and there is no question of loading of the value on value shown by the appellant in the Bill of Entry. Accordingly the impugned order is set aside, value shown by the appellant in the Bill of Entry is accepted. With these observations, the appeal is allowed with consequential relief, if any.

Decision:-Appeal allowed.

Comment:-The essence of this case is that when the declaration in the bill of entry indicating the machine to be second hand was accepted by the adjudicating authority and valuation was confirmed by two Chartered Engineers, the question of under valuation does not arise. Also, the contention that machine is new is not acceptable at the appeal stage.

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PJ/Case Laws/2012-13/1488

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