Customs, Excise and Gold Tribunal - Tamil Nadu
Amarjit Singh vs Commissioner Of Customs (Appeals) on 17 March, 1998
Equivalent citations: 1999(114)ELT263(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. This is an Appeal against Order-in-Appeal No. C3/99/97, dated 1-9-1997 of Commissioner of Customs (Appeals) Chennai. The appellant had imported one used Diesel Engine on Bill of entry dated 12-6-1996. Issue of show cause notice was waived and the Assistant Collector of Customs adjudicated the Live B/E vide Order-in-original No. S8/638/96/ACC, dated 13-6-1996 wherein the imported goods were confiscated on the sole ground that it was in the nature of consumer goods which requires a specific licence for their import as per the Exim Policy 1992-1997 and which is not available with the importer. The goods were allowed to be redeemed on a fine of Rs. 1,20,000/- and a Penalty of Rs. 50,000/- was also imposed. The value of the offending goods was Rs. 40,000/-.
2. In their appeal before the Commissioner of Customs (Appeals) the appellants, inter alia, submitted that the confiscation order of the Learned Assistant Commissioner was not correct because the ITC (HS) Classification of Import and Export items against Heading 840820.03 was not taken into consideration. Under this heading, diesel engines can be imported without any licence and the said ITC (HS) Classification came into force from 25-3-1996, i.e. much before the date of B/E covering this import.
3. Heard ld. Consultant Shri M. Rajendran who reiterated the facts as above and argued that the Order-in-Appeal accepted that ITC (HS) classification was applicable, but introduced a new ground by holding that the said policy was applicable only to new diesel engines and not used and old ones and therefore, the import was unauthorised. He stressed that this ground was not used by the ld. Assistant Commissioner while passing confiscation orders in the Order-in-Original and therefore, the Order-in-Appeal adventured into a new ground beyond the purview of the impugned order-in-original and concluded in favour of Revenue which was not legally correct. He cited the following decisions as applicable to this case :-
(1) Reckitt & Colman of India Ltd. v. Collector of Central Excise -1996 (88) E.L.T. 641 (S.C.) (2) Prince Khadi Wollen Handloom Prod. Coop. Indl. Society v. CCE -1996 (88) E.L.T. 637 (S.C.) (3) Jaydee Agro Chemicals Pvt. Ltd. v. Collector of C. Ex. -1996 (84) E.L.T. 354 (Tribunal) (4) Gujarat State Fertilizers Corpn. Ltd. v. C. Excise -1996 (64) ECR 387 (Tribunal) (5) Haryana Milk Foods v. Commissioner of Customs - 1998 (97) E.L.T. 320 (Tribunal).
4. He argued that the ratio of the cases mentioned above was that the Commissioner (Appeals) has no power to go beyond the impugned order-in-original.
5. He further argued that the imposition of Redemption Fine in the Order-in-Appeal of the level of 150% of the value was too high and that it was an established practice as held in numerous decisions of the Tribunal that in case of used diesel engines, the RF of about 100% of the value would be just. He cited decision in 1994 (69) E.L.T. 74 (Tribunal) - M/s. Care International, wherein in a number of earlier cases are referred showing that sufficient facts existed that RF was only to the tune of 101%. He further submitted that in the case of Nanak Tradings, the Hon'ble West Regional Bench of the Tribunal held [1998 (98) E.L.T. 381 (Tribunal)] that the level of RF on diesel engine used should be fixed at 100% and followed the earlier decisions including that in the case of Care International cited supra. The ld. Consultant therefore argued that in case his first argument was not acceptable, then at least the Redemption Fine should be reduced to this level and accordingly Penalty should be reduced to 10% as laid down in these case laws.
6. Heard ld. JDR Shri Ravinder Saroop. In the first place, he argued that it is not correct that the ITC (HS) is the only Import Policy applicable in this case. He referred to Chapter V, para 29 of the ITC Policy 1992-97, wherein it was clearly provided that all second-hand goods can only be imported according to either a specific dispensation in public notice or against a specific licence. He continued to submit that as per the Chapter I (introduction) of the Volume I of Handbook of Procedure, issued by the Import Trade Control Authorities, it was clearly laid down that this hand-book of procedures and therefore also the ITC Policy shall remain in force in co-existence of the ITC (HS) Classification upto 31-3-1997; and therefore it was clearly applicable to this B/E dated 13-6-1996. Thus the import was hit by para 29 of the ITC Policy (Chapter V). Secondly, he argued that since the show cause notice has been waived, mere non mention of para 29 in the Order-in-Original which held that the imported goods were hit by prohibition of ITC Policy of 1992-97 was therefore not illegal, and that the case laws cited regarding the new grounds in the Order-in-Appeal were quite different than the facts contained in the said Order-in-Original in this case and were to be distinguished. Thirdly, regarding the quantum of Redemption Fine, he pointed out that according to Board's instructions available with him, the RF was to be in the region of 300% to 350% to discourage illegal imports of used diesel engines as the illegal imports thereof had been noticed in large quantities which was detrimental to the national economy.
7. Ld. Consultant Shri Rajendran rose to rebut by again stressing the case law of Care International wherein he pointed that the number of instances were considered therein which clearly showed that the existing practice and was to impose a RF of 100% and therefore, the said instructions were not material, and in any case, they did not bind this Hon'ble Tribunal, whereas this Tribunal was obliged to follow earlier decisions if they are applicable to the facts of this case. Secondly, he argued that in the Order-in-Original, the ld. Assistant Commissioner had only concluded that the import was unauthorised because the goods were in the nature of consumer goods and had not specifically stated that it was hit by para 29 of the ITC Policy which he conceded was in force in co-existence with ITC (HS) Classification. He once again reiterated that the ld. Commissioner (Appeals) went beyond the issues raised and the ambit of the impugned Order-in-Original in his decision in appeal.
8. We have considered the submissions made on both sides as well as facts on record. We do not agree that the argument of the ld. Consultant that the ld. Commissioner (Appeals) has traversed beyond the ambit of the matters on record in his Order-in-Appeal because the appellant himself have agitated on new grounds, namely, that the ITC (HS) Classification was in their favour. Once this was one of the main grounds in their appeal petition, the ld. Commissioner (Appeals) was duty-bound to consider the applicability of the ITC (HS) Classification and to record the findings on this issue, which we find that he has done in the impugned Order-in-Appeal. It stands to reason that while the applicability of such policy as agitated in the appeal petition, the ld. Appellate authority had to come to a conclusion for reasons recorded, whether import was authorised or unauthorised, in the light of the said Policy. In doing so, he had a free hand to consider all the provisions in the said Policy in this respect, that is to say, that he had to examine whether benefit under this policy was available to the appellants when applied to the nature of goods under import. This he did and came to the conclusion that as admittedly the goods were used diesel engines and whereas, the policy referred to in the appeal only applied to new diesel engines, therefore, the same was not applicable in this case. We find that since the appellants themselves had agitated in their appeal petition that this policy should be applied to the facts of the case, they cannot now say that the reasoned findings of the ld. Commissioner (Appeals) that the Policy was not applicable because the goods imported were used and old, constitutes a new ground. The Appellants are clearly under an erroneous belief that the ld. Appellate Authority was duty-bound to apply the said ITC (HS) Classification Policy only in the manner in which they wanted it to be applied, without taking into consideration whether the goods were old or new, while applying the Policy to the present set of facts. We strongly feel that once the appellants themselves opened the door for application of the ITC (HS) classification in their appeal petition, they cannot claim that considering its applicability to the old and used imported engine introduced a new ground in the order-in-appeal. This is clearly a case where the appellants want to have their cake and eat it too. We therefore, conclude that this argument has no merit.
9. Now we proceed to consider the second argument placed before us regarding quantum of the Redemption Fine as per the prevailing practice and the case laws cited. We find that the case laws cited supra in this behalf are dealing with the import of old and used diesel engines and which cover the period under the ITC Policy 1992-97 and are, therefore, squarely applicable to the facts of this case. Since the Hon'ble Tribunal in the case of M/s. Care International has taken note for a number of imports where the RF was imposed about 100% of the value of the unauthorised goods imported and since this decision has been further followed in the decisions of M/s. Nanak Trading Company (supra) wherein the level of Redemption Fine was 100% and the level of Penalty 10% of the value of the offending goods, therefore we apply the ratio of this decision in this case also. The value of goods being 40,000/- rupees, the Redemption Fine is reduced to Rs. 40,000/- (Rupees Forty Thousand only) and Penalty to Rs. 4,000/- (Rs. Four Thousand only). To this extent the Order-in-Appeal stands modified, and otherwise, as discussed above, we do not find anything in the Appeal which compel us to interfere with the impugned Order-in-Appeal as far as the conclusions regarding unauthorised import of the goods in question is concerned.
10. The Appeal partly succeeds with consequential relief as mentioned above.