Custom, Excise & Service Tax Tribunal
M/S. G.B. Trading Company vs Cce, Tuticorin on 12 May, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/PD/111/08, C/EH/115/08 & C/149/08
(Arising out of Order-in-Appeal No. 3/2008(TTN) (Cus) dated 11.04.08 passed by the Commissioner of Customs & Central Excise (Appeals), Trichy)
For approval and signature
Honble P. G.CHACKO, Member (Judicial)
Honble P. KARTHIKEYAN, Member (Technical)
_______________________________________________
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M/s. G.B. Trading company : Appellant
Vs.
CCE, Tuticorin : Respondent
Appearance Shri N. Viswanathan, Adv., for the appellant Smt. R. Bhagya Devi, SDR, for the respondent CORAM Shri P.G. CHACKO, Member (Judicial) Shri P. KARTHIKEYAN, Member (Technical) Date of hearing: 12.05.08 Date of decision: 12.05.08 Final ORDER No.________/2008 Per P. KARTHIKEYAN After hearing both sides on the early hearing petition and the stay application, we take up the appeal proper for disposal after dispensing with the requirement of predeposit. M/s. G.B. Trading Company (GBT), Cannaught Place, New Delhi filed a Bill of Entry No. 429468 dated 05.02.08 for import of 113 units of used photocopiers declaring a value of Rs. 7,42,390/- (C&F). The consignment comprised 81 pieces of analogue photocopiers and 32 pieces of digital multi-function (Print and Copying machines). On inspection the Chartered Engineer assessed the value of the impugned goods at Rs. 22,46,822/- (C&F). After due process of law, the original authority determined the assessable value at Rs. 22,46,822/-(C&F), ordered confiscation for import of the impugned goods in contravention of the provisions of Foreign Trade Policy (FTP) and misdeclaring its value. He offered an option to redeem the goods on payment of a fine of Rs.7,50,000/-. He imposed a penalty of equal amount on GBT under Section 112(a) of the Act.
2. In the impugned order the Commissioner upheld the order of the original authority observing that CBEC vide its Circular No. 78/2003-Cus dated 01.09.03, instructed that importers of second hand machinery contravening Exim Policy should not be allowed to make a profit on the import. He found that by enhancing the assessable value of the impugned goods following the recommendation of the Chartered Engineer, the original authority had rightly rejected the transaction value. The value determined was proper.
3. The appeal before us challenged revision of value by 100% of the declared value. The redemption fine equal to 50% of the enhanced value was exorbitant considering that the original authority had, in a similar case observed that, re-sale of second hand copiers fetched 25% profit margin. The penalty was also quite harsh and unreasonable. Reiterating the grounds taken in the appeal as regards fine and penalty, the Ld. Counsel for the appellants submits that the challenge to the re-determination of value for assessment is not pressed. He submits that in similar case of imports, after the amendment to the policy prohibiting import of second hand photocopiers, this bench had reduced the redemption fine and penalty to 15% and 10% of the assessable value respectively in a number of cases. He prays for similar relief in the subject case.
4. We have also heard the Ld. SDR who reiterated the findings of the Commissioner (Appeals).
5. We have carefully considered the rival submissions. As the appellant has accepted the enhanced value for assessment, the appeal is confined to prayer for reduction of fine and penalty. We find that the order of the lower authorities confiscating the impugned goods for contravention of Exim Policy and misdeclaration of value and ordering redemption fine and penalty is in accordance with law.
6. We find that the Boards Circular underscores a settled policy that a person should not be allowed to get away with a bonanza of profit through an illegal import. However, the lower authorities have not ascertained the margin of profit the importer would be gaining by selling the impugned goods. The only guidance we get in this regard is a finding by the original authority in one of the earlier orders, where he had indicated that the margin of profit in sale of second hand photocopiers was to the tune of 25% of the value. The Ld. SDR does not throw any light on the issue to hold that the MOP in the instant case is higher than 25%. Once an appropriate amount of fine is imposed to redeem the goods, a suitable deterrent penalty is called for. We find that 15% of the value will be an appropriate penalty in the facts of the case. Accordingly, we reduce the redemption fine from Rs.7.5% lakhs to Rs. 3.75 lakhs and penalty from Rs.3.75 lakhs to Rs. 2.25 lakhs. The appeal is disposed off. The early hearing application and the stay application also get disposed of.
(Operative part of the Order pronounced in Open Court on 12.05.08)
(P.KARTHIKEYAN) (P.G. CHACKO)
MEMBER (T) MEMBER (J)
BB
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