Abirami Weaving Mills Vs Commissioner of Customs (CESTAT Chennai)
The case concerns an appeal before the Tribunal challenging the enhancement of the declared value of imported second-hand machinery. The appellant imported 20 used Picanol GTM AS Rapier Looms with accessories, declaring a unit price of USD 4000 and a total invoice value of USD 80,000. The machinery, manufactured in Belgium in 1993 and imported from Indonesia, was in used condition. The importer initially could not produce a detailed independent Chartered Engineer certificate from the country of supply, including particulars such as present condition, reconditioning details, cost, and expected lifespan.
Due to the absence of a proper load port certificate and inability to verify the declared value through depreciation methods—since the calculated value was lower than the prescribed minimum reference value—the goods were referred for valuation by a DGFT-notified agency or an empanelled Chartered Engineer. Based on the local Chartered Engineer’s assessment, the declared value was enhanced, and the importer paid duty accordingly without protest. The Adjudicating Authority subsequently rejected the declared value and re-determined it at USD 7500 per unit. This decision was upheld by the Commissioner (Appeals), leading to the present appeal before the Tribunal.
The appellant argued that, as per Board Circular No. 4/2008-Cus., valuation of second-hand machinery should be based on the load port Chartered Engineer’s certificate where available, and only in its absence should a local certificate be relied upon. In this case, the appellant had obtained a load port Chartered Engineer’s certificate dated 28.09.2015, which was ignored by the authorities. The appellant also relied on Section 14 of the Customs Act, 1962, asserting that the transaction value should be accepted as there was no allegation of relationship between buyer and seller or any additional payment beyond the declared value.
