Per V.K. Ashtana :

The short point to be decided in this appeal is whether the impugned order-in-original No. 131/97 dated 22.8.97 has correctly applied Rule 8 of Customs Valuation Rules after discarding the Transaction Value contained in the invoice submitted alongwith Bill of Entry for import of second hand 5 color specified offset printing machine. The impugned order discards the Transaction Value of Australian Dollars 47,000 on the grounds that the Chartered Engineer's certificate supporting the invoice value is not reliable, as it shows year of manufacture as 1972 instead of 1973 as ascertained by Deptt. from German manufacturer.

2. Learned SDR Shri Victor Thiagaraj argues that as age of machine has direct nexus to its fair value, therefore the said error in the said certificate is sufficient grounds to reject the invoice (transaction) value. This is further supported by fact, so presses Ld. SDR, that as per ITC policy AM 82-87, para 25, where value is over Rs. 1 crore, a certificate from designated authority (Appendix XI-A of Hand book) is necessary, and is not obtained by appellants. There is also no documentary evidence available on negotiations for the invoice price as it was agreed during a personal visit of Shri S. Shetty M.D. to Australia. Learned SDR also cited final order of Tribunal in case of Karuna Color Lab and orders in Order No. 1176/97 dated 9.5.97 as also Rakesh Press - 1995 (8) RLT 285 (T) = 1995 (77) ELT 699 wherein the methodology of depreciated value under Rule 8 ibid is upheld.

3. Earlier, Learned Advocate based his case on the following grounds :-

a) no evidence is led to prove fraud or any illegal extra payments made by importer to foreign exporter;

b) Year 1972 in Chartered Engineer's certificate is a minor error, but the certificate carries same model, make, Sr. No. etc. of the machine imported, hence it cannot be brushed aside.

c) In view of (a) & (b) above, the Transaction Value under Rule 4 of Customs Valuation Rules ibid cannot be discarded as none of the conditions specified therein are attracted in this case. Therefore, department cannot go to Rule 8 at all.

d) As per Transaction Value the value is Rs. 12,21,513/- whereas this erroneous application of Rule 8 allows Deptt. to wrongly fix the Assessment value as Rs. 1,15,10,745/-. The difference is too mammoth.

e) no designated Chartered Engineer's certificate has been obtained, because their declared Transaction Value was much less than Rs. 1 crore and at time of import they were not aware that department would allege it to be more than Rs. 1 crore; and

f) while transaction value is accepted for other 2 items imported together with this one, only transaction value of this is disputed.

g) Learned Advocate cites 1992 (58) ELT 137 (Tri) and submits that this is final law as in appeal to Supreme Court in 1993 (67) ELT 209 SC, deptt. did not raise issue of valuation.

h) He also cites 1998 (100) ELT 126 (Tri) in case of Chem Crown (I) Ltd.

i) He further cites the case-laws of Debabrata Ghosh in 1993 (68) ELT 551 Cal. wherein it has been clearly laid down that Revenue cannot discard Rules 4 to 7 and straightaway go to Rule 8 ibid for valuation of second hand machinery, as section 14 makes no distinction between new or old/used goods.

4. Learned SDR further submits that as per 1990 (45) ELT 586 Tri, rate of exchange is as per date of presentation of Bill of Entry and not date of manufacture etc. as contended by Learned Advocate earlier.

5. He distinguishes cases cited by Learned Advocate on grounds that they concern value of new goods and cites case-law of Macneill & Magor Ltd., relied upon in impugned order.

6. Learned Advocate rebuts that this case-law is of prior to introduction of new section/valuation rules in 1988, hence not relevant and is also not for second hand machines.

7. We have carefully considered the arguments on both sides, as well as the records of the case. We find that the transaction as contained in this invoice cannot be discarde