Custom, Excise & Service Tax Tribunal
(3) The Commissioner Of Customs & vs (3) M/S. Royal Traders on 15 June, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - Single Member Bench
Court - II
Date of Hearing: 15.06.2012
Date of decision: 15.06.2012
Miscellaneous Application Nos. 203 to 205/2012
Customs Appeal Nos. 158 to 160/2010 and 96 to 98/2010
(Arising out of Orders-in-Appeal No. 74 to 76/2009 (H-II) Cus. dated 07 & 08.10.2009 passed by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad)
For approval and signature:
Honble Mr. M. Veeraiyan, 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?
Yes
3. Whether their Lordship wish to see the fair copy of the Order?
Seen
4. Whether Order is to be circulated to the Departmental authorities?
Yes
(1) M/s. Copier Marketing Corporation
(2) The Commissioner of Customs &
Central Excise
Hyderabad
(3) The Commissioner of Customs &
Central Excise
Hyderabad
..Appellants
Vs.
(1) The Commissioner of Customs
Hyderabad
(2) M/s. Copier Marketing Corporation
(3) M/s. Royal Traders
Respondents
Appearance Mr. Y. Sreenivasa Reddy, advocate for the appellant Mrs Sabrina Cano, Superintendent (AR) for the Revenue Coram:
Honble Mr. M. Veeraiyan, Member (Technical) MISC. ORDER Nos. ______________________2012 FINAL ORDER Nos._______________________2012
1. The miscellaneous application Nos. 203, 204 and 205/2012 are by the appellant-parties seeking to file additional grounds and for amending the prayer and seeks to setting aside the redemption fines and penalties. Applications are allowed after hearing both sides. 2.1. Appeal No. C/158/2010 is by M/s. Copier Marketing Ltd. against the order of the Commissioner (Appeals) No. 74/2009 (H-II) Cus. dated 07.10.2009 seeking reduction of redemption fine and penalty sustained by the Commissioner (Appeals).
2.2. Appeal No. C/159/2010 is by M/s. Copier Marketing Corporation against the order of the Commissioner (Appeals) No. 75/2009 (H-II) Cus. dated 07.10.2009 seeking reduction of redemption fine and penalty sustained by the Commissioner (Appeals).
2.3. C/160/2010 is an appeal against the Order No. 76/2009 (H-II) Cus. dated 08.10.2009 seeking reduction of redemption fine and penalty as sustained by the Commissioner (Appeals).
2.4. Appeal Nos. C/96, 97 & 98/2010 are by the department against the above orders of the Commissioner (Appeals) seeking enhancement of redemption fines and penalties to the levels imposed by the original authorities.
2.5. As these appeals involve substantially similar facts and legal points, they are being dealt with by this common order.
3. Heard both sides extensively.
4.1. The assesses imported used multi-functional copiers along with accessories and classified the same under 84433100. All these consignments were subject to examination by approved chartered engineers. The values of the consignments were enhanced based on the chartered engineers certificates. The appellants have accepted the classification and enhanced value and paid duty. There is no dispute on this issue either before the original authority or before the Commissioner (Appeals).
4.2. The original authority confiscated the consignment and allowed the same to be redeemed on payment of redemption fine and imposed penalties.
4.3. On appeal, the Commissioner (Appeals) has upheld the confiscation and liability to pay the differential duty but reduced the redemption fines and penalties. The appellant-assessees are aggrieved against the sustained penalties and redemption fines. On the other hand, the department seeks enhancement of the redemption fine and penalties to the level fixed by the original authority.
5.1. Learned advocate appearing for the importers, relying on the decision of the Tribunal in the case of M/s. Shivam International and others Vs. CC, Cochin in Appeal No. C/2477 to 2488/2010 reported in [2011-TIOL-851-CESTAT (Bang.)] submits that the said items are to be treated as multi-functional units and not merely as photocopiers and the restriction in the Exim policy will not apply. Therefore, the original authority should not have passed the orders confiscating the goods and imposing penalties and that the orders passed by the original authority are ab-initio invalid. Therefore, the issue of jurisdiction to pass orders can be challenged at any stage of the proceedings as held in the decision of the Tribunal in the case Shri Dhanversha Steel Pvt. Ltd. Vs. CCE, Meerut [2010 (261) E.L.T. 851 (Tri.-Del.)].
5.2. Alternatively, he submits that the redemption fines imposed by the original authority and upheld by the Commissioner (Appeals) are arbitrary and not based on market enquiry determining the profit margins involved. Such exercise of power in fixing redemption fines and penalties are not to be upheld. In this regard, he relies on several decisions, particularly, in the case of Sri Ambalal Expo Inc. Vs. CC, Chennai [2003 (155) E.L.T. 346 (Tri.-Chennai)] and Shankar Trading Co. Vs. CC [1999 (106) E.L.T. 456 (T)].
5.3. He further submits that the redemption fines and penalties imposed exceeded the bench mark rate of 10% redemption fine and 5% penalty as held in the decision of the Tribunal in the case of Big Apple Manufacturing Vs. CCE & C (A) Hyderabad [2009 (237) E.L.T. 519 (Tri.-Bang.)].
5.4. In addition, he submits that the Foreign Trade Policy for the year 2009 to March 2014 as applicable w.e.f. 05.06.2012 has specifically included photocopier machines/Digital Multifunction Print & Copying Machines under the restricted category. As a result, for the earlier period such machines cannot be treated as restricted as the same cannot be given retrospective effect.
6.1. Learned DR strongly supports the orders of the Commissioner (Appeals) in upholding the confiscation and imposing penalties. It was contended that the importers have submitted to the jurisdiction of the original authority and Commissioner (Appeals). Having submitted to the jurisdiction of the authorities below, they cannot be permitted to raise the issue of jurisdiction before the Tribunal. She particularly draws my attention that no such grounds have been taken before the Commissioner (Appeals) challenging the jurisdiction of the original authority.
6.2. Referring to the appeals by the department, she submits that in the case of M/s. Copier Marketing Corporation and M/s. Royal Traders, Commissioner (Appeals) has reduced the redemption fines and penalties without recording any valid reasons. As the said importers have repeatedly imported restricted items without the requisite licenses, there was no justification for the Commissioner (Appeals) to reduce the redemption fines and penalties. In this regard, she relies on the following decisions of the Tribunal.
a) CC, Chennai Vs. Sagar Enterprises [2011 (264) E.L.T. 101 (Tri.-Chennai)]
b) CC (Prev.) Amritsar Vs. Rose Enterprises [2008 (223) E.L.T. 270 (Tri.-Del.)]
c) Sophisticated Marble & Granite Industries Vs. CC, Mumbai [2004 (165) E.L.T. 353 (Tri.-Mum.)]
7.1. I have carefully considered the submissions from both sides and perused the records.
7.2. The issue regarding lack jurisdiction on the part of original authority has been raised on behalf of the importers for the first time before the Tribunal. This has been raised based on the submissions that the decision of the Tribunal in the case of M/s. Shivam International (supra) is applicable to them and the goods imported by them did not require a license and, therefore, the consignments should not have been subjected to adjudication and redemption fines and penalties should not have been imposed. On a close reading of the order of the Tribunal in the case of M/s. Shivam International, it is seen that the same related to old and used digital multi-functional copier machines. Therefore, the said decision cannot be applied to the present cases. Undisputedly the impugned goods have already been disposed off and, therefore, the varacity of the claim that the photocopiers imported by them are identical to digital multifunction print and copier machines dealt with in the case of M/s. Shivam International case cannot be ascertained. The foundation for the claim that the consignments imported by them do not require a license is very weak and, therefore, the question of exceeding of jurisdiction by the authorities below does not arise. At any rate, the assessees have submitted to the jurisdiction of the original authority and that of the Commissioner (Appeals). The decision relied upon by the learned advocate in the case of Shri Dhanversha Steel Pvt. Ltd. (supra) cannot applied to the facts of the present case. The Tribunal is concerned only about the correctness or otherwise of the order passed by the Commissioner (Appeals).
7.3. The consignments imported by the parties which are photocopiers with certain additional facilities were rightly held liable to confiscation as the same were imported without the requisite licenses for clearances as envisaged under exim policy. It is noted that the original authority has confiscated the goods and the orders stand upheld by the Commissioner (Appeals). There is no reason to interfere with the orders of confiscation as adjudged by the original authority and as upheld by the Commissioner (Appeals).
8.1. The submissions of the learned advocate that multi-functional photocopiers are restricted only w.e.f. 05.06.2012 and not earlier has to be considered in the light of facts of the present case. From the available records no reliable evidence have been produced that the multi-functional photocopiers were Digital Multi-functional photocopiers. Therefore, this submission cannot be considered at this stage.
8.2. Learned advocate on behalf of the importers, as an alternative, was seeking further reduction in redemption fines and penalties. He relied on several decisions of the Tribunal where in respect of import of photocopiers redemption fine of 10% and penalty of 5% of the value of the goods imported have been sustained. The claim of the learned advocate is that in the case of Royal Traders, the appellant ascertained the profit margins to be 12.16% and the same has been duly noted by the Commissioner (Appeals) but yet he has sustained redemption fine of about 18% of the declared value which is not justified. He also said that higher redemption fines imposed on goods imported by M/s. Copier Marketing Corporation on the ground that they were repeatedly importing was also not justified.
9.1. The quantum of redemption fine depends on the facts and circumstances of the case and is subject to the statutory limit prescribed under Section 125 of the Customs Act, according to which the same cannot exceed the market price. The redemption fine imposed by the Tribunal cannot be taken as truly binding precedents and the same may be taken at the most only as guidelines. If a restricted import takes place repeatedly, the hands of the adjudicating authority cannot be tied by prescribing a lower limit than the statutory limits prescribed under Section 125 of the Customs Act. Such a prescription will lead to flooding of prohibited and restricted items into the market which cannot be permitted. However, it is not to say that the discretion can be exercised by the original authority or Commissioner (Appeals) or by the Tribunal arbitrarily or mechanically. In the present cases, undisputedly the consignments were subject to valuation by approved chartered engineers. Therefore the comparison of the declared value to the value ascertained by the chartered engineer clearly gives an indication of profit margins. Therefore, in the present cases it cannot be said that the redemption fines have been imposed without any basis or without conducting any enquiry.
9.2. From the above, I find that the Commissioner (Appeals) has taken all relevant facts into account and used his discretion to reduce the redemption fines and penalties. The quantum of redemption fines and penalties sustained by the Commissioner (Appeals) cannot be considered either to be excessive or on the lower side. The amounts of fines and penalties determined are reasonable. Therefore, there is no justification to interfere with the orders of the Commissioner (Appeals).
10. In view of the above, the appeals by the parties as well as by the department are rejected. Miscellaneous applications also disposed of.
(Pronounced & dictated in open Court)
(M. VEERAIYAN) MEMBER (TECHNICAL)
iss