Custom, Excise & Service Tax Tribunal
M/S.B.E.Office Automation Products ... vs Cce, Delhi-Iii on 12 October, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Customs Appeal No.498 of 2009
(Arising out of Order-in-Original No.2/Cus/JM/09 dated 1.5.09 passed by the Commissioner of Central Excise & Customs, Gurgaon)
For approval and signature:
Honble Mr. Justice R.M.S.Khandeparkar, President
Honble Mr. P.Karthikeyan, Member (Technical)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s.B.E.Office Automation Products Ltd. Appellants
Vs.
CCE, Delhi-III Respondent
Present for the Appellant: Shri G.K.Sarkar Advocate
Present for the Respondent: Shri Sumit Kumar, SDR
Coram: Honble Mr. Justice R.M.S.Khandeparkar, President
Honble Mr. P.Karthikeyan, Member (Technical)
Date of Hearing/Decision: 12.10.2010
ORAL ORDER NO._______________
PER: P.KARTHIKEYAN This is an appeal filed M/s.B.E.Office Automation Products Ltd. The appellants had imported old and used photo copier machines and sought clearance under the Bill of Entry dated 11.1.2008. It had declared the value of the consignment as US$ 40,000 FOB (equivalent to Rs.16,78,007/- CIF). The appellant appointed a Chartered Engineer who issued a certificate assessing the value of the consignment at US$ 40,930 (FOB). The departmental authorities noted that similar goods were being imported contemporaneously at higher prices. The import of used photocopiers requires an import licence. The subject import without a licence involved violation of statutory provisions whereby the consignment incurred liability to confiscation under Section 111(d) of the Customs Act, 1962 (the Act) and the importer liability to penalty under Section 112(a) of the Act. After due process of law vide order in original dated 29.02.2008, the Commissioner enhanced the assessable value to Rs.25,84,535/- CIF with reference to NIDB data pertaining to contemporaneous imports of similar goods. He ordered confiscation of the photocopiers under Section 111(d) of the Act and offered the appellant an option to redeem the consignment on payment of a fine of Rs.16 lakhs under Section 112 (a) of the Act. He also imposed a penalty of Rs.15 lakhs on the appellant. Disposing the appeal filed by the importer, vide final order No.C/102/09 dated 24.02.2009, the Tribunal upheld the liability of the impugned goods for confiscation and liability of the appellants to penalty under the relevant provisions as ordered. The Tribunal remanded the matter to the Commissioner for (a) redetermination of the value of the goods after getting the same re-examined in presence of the appellants or their representatives, by a Chartered Engineer appointed by the department and (b) redetermination of the quantum of redemption fine and penalty.
2. The impugned order has been passed pursuant to the above directions of the Tribunal. The department appointed a Chartered Engineer who assessed the value of the consignment at Rs.23,18,694/-. After hearing the parties, the Commissioner confiscated the impugned goods under Section 111(d) of the Act and offered an option to the importer to redeem the same on payment of a fine of Rs.8 lakhs. He imposed a penalty of Rs.14 lakhs on the importer. In the appeal filed before the Tribunal, the appellant has assailed the method of valuation followed by the Commissioner. It is submitted that second hand photocopiers were capital goods as per the Foreign Trade Policy 2004-2009. They relied on the decision of the Tribunal in M/s.Atul Commodities Ltd. vs. CCE, Cochin reported in 2004 (184) ELT 135 (Tri.) in support of the above claim. The Commissioner had rendered the untenable finding that the appellants had imported used photocopiers earlier also in the name of M/s.Bhagwan Electro Photocopiers, M/s.Pulse Copiers, etc. The appellants were a Private Limited Company. Mere fact that one of the Directors was the owner or the partner of the other two firms could not be a ground to take adverse view in the matter to impose harsh fine and penalty on the appellant. Such fine and penalty were uncalled for. There were several decisions of the Tribunal which had allowed the redemption of confiscated second hand photocopiers on payment of a fine of 10% of the value of the goods and imposing a penalty equal to 5% of the said value.
3. We have heard both sides.
4. We find that the impugned order has been passed in terms of remand directions contained in our final order dated 24.2.2009. The Tribunal had found that the goods were liable for confiscation under Section 111(d) of the Act. The Commissioner was directed to appoint a Chartered Engineer and get the impugned goods valued by him. The Commissioner was also to re-determine fine and penalty after obtaining valuation report from the Chartered Engineer. This order has not been challenged by the appellant. Therefore we find no reason to interfere with the valuation ordered by the Commissioner. As regards fine and penalty, we find that in a similar case of import of used photocopiers misdeclaring value for assessment, vide Order in Original No.01/ADC/CB/CUS/RE/2007 dated 14.03.2007, the Commissioner had enhanced the value from the declared Rs.8,29,475/- to Rs.15,41,609/-. He had imposed redemption fine of Rs.9 lakhs and penalty of Rs.3 lakhs on the importer in that case. As per the impugned order, the Director of the present appellant was the authorized representative of the importer, M/s.Bhagwan Electro Photo Copiers, New Delhi. That import was in March, 2007. In December, 2007, M/s.Pulse Copiers in which also Shri R.K.Yadav, Director of the appellant firm was a Director, had imported 200 pieces of old and used photocopier machines without licence and had under declared the value. The appellant has no case that redemption fine of Rs.9 lakhs and penalty of Rs.3 lakhs ordered in the case of M/s.Bhagwan Electro Photo Copiers has been challenged and the order modified. The appellant has also not cited any judicial authority in support of its claim in similar cases, find and penalty ordered were respectively 10% and 5% of the value of the goods involved. We find that the fine and penalty of respectively Rs.8 lakhs and Rs.14 lakhs ordered in the present case is a little harsh. We find that a fine of Rs.7.5 lakhs and a penalty of Rs.2.5 lakhs will be appropriate in the facts of present case. We modify the impugned order accordingly and allow the appeal in part.
5. The appeal is disposed of.
(pronounced in the open court) (JUSTICE R.M.S.KHANDEPARKAR) PRESIDENT (P.KARTHIKEYAN) MEMBER (TECHNICAL) mk