2025-VIL-453-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs - Declared value, Accessories, Classification, Duty exemption - Appellant imported a dredger and accessories from the USA and filed a Bill of Entry declaring the total value, including the value of accessories, and classified the goods under the Customs Tariff heading 89051000 (Dredger) - Department objected to the classification of the additional length of cutter head ladder and jet pump system, the special discount of 17.5% claimed by the appellant, and alleged undervaluation of the goods - Whether the declared value of the imported dredger is correct - HELD - The transaction value declared by the appellant was rightly rejected by the Commissioner under Rule 12(2) of the Customs Valuation Rules, 2007. The appellant was the authorized sales representative of the overseas supplier on an exclusive basis and the special discount given to the appellant was not in the normal course of international trade. Further, the initial market value of the dredger as per the survey report was USD 41,75,000, which was not disclosed to the Department – upheld the Commissioner's decision to redetermine the assessable value based on the report of the Chartered Engineer appointed by the department in accordance with Rule 9 of the Customs Valuation Rules - The Tribunal upheld the Commissioner's order with respect to the redetermination of the assessable value, classification of the additional accessories, and denial of the benefit of the excise duty notification. However, set aside the imposition of penalty under Section 112(a) of the Customs Act on the Managing Director, as the penalty under Section 114AA was already upheld – The appeal is partly allowed - Whether the classification of the additional length of cutter head ladder and jet pump system is correct – HELD - The Tribunal upheld the Commissioner's decision to classify the additional length of cutter head ladder under CTH 84314990 and the jet pump system under CTH 84137097, as these were not compulsorily supplied with the standard model dredger and were accessories to increase the effectiveness of the dredger. The Tribunal observed that parts and accessories are two different things, and the additional items were accessories and not integral parts of the dredger - Whether the benefit of Notification No. 01/2011-CE dated 01/03/2011 is admissible to the appellant – HELD - the benefit of the said notification, which prescribes a concessional rate of 1% Excise duty without Cenvat credit, is not admissible to the appellant as an importer.
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