Custom, Excise & Service Tax Tribunal
B.E. Office Automation Product P. Ltd vs Commissioner Of Customs (Port) Kolkata on 9 May, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.C/233/2007
(Arising out of Order-in-appeal No. KOL/CUS/PORT/77/07 dated 06.07.2007 passed by the Commissioner of Customs (Port), Kolkata
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, MEMBER (TECHNICAL)
HONBLE SHRI P.K. CHOUDHARY, MEMBER (JUDICIAL)
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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
B.E. OFFICE AUTOMATION PRODUCT P. LTD.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Customs (Port) Kolkata.
Respondent (s)
Appearance:
Shri Avijit Chakraborty, Adv, for the Appellant (s) Shri S. Nath, AC (AR), for the Revenue (s) CORAM:
Honble Shri H.K.Thakur, Member(Technical) Honble Shri P.K. Choudhary, Member (Judicial) Date of Hearing/Decision: 09.05.2016 Date of Pronouncement: 09.05.16 ORDER No.FO/A/75377/2016 Per Shri H.K.Thakur This appeal has been filed by appellant against OIO No. KOL/CUS/PORT/77/07 dt 06/07/2007 passed by Commissioner of Customs (Port), Kolkata as Adjudicating authority. Under this OIO dt 06/07/2007 Adjudicating authority has confiscated old & used photocopiers imported by the appellant and has given an option for redeeming the same on payment of Rs. 8 lakh as redemption fine. A penalty of Rs. 3 lakh has also been imposed under Sec 112 (a) of the Customs Act 1962. The declared value of Rs. 18, 99,144/- was enhanced at the time of assessment for the imported goods to Rs. 26, 41,645/-.
2. Sh. Arijit Chakraborty (Advocate) appearing on behalf of the appellant argued that Adjudicating authority has arbitrarily enhanced the assessable value on the basis of a Chartered Engineers report as detail in Para- 4 of the OIO dt 6/7/2007. After making the bench go through Para-5 & 6 of the OIO learned Advocate argued that the basis of enhancing the value is not justified.
2.1 On the issue of confiscation of imported goods it was agued by the Learned Advocate that as per the Chartered Engineers Certificate dt 30/4/2014 now produced by the appellant the second had equipment imported by the appellant was Digital Multifunctional Copier Machines and not simple photocopiers. That the model numbers described in the Bills of entry are the same which have been certified by the Chartered Engineer M/s C.K Sharma & Corporation to be Digital Multifunctional Copier Machines. That no license is required to be procured for the second hand & used Digital Multifunctional Copiers as only ordinary second hand photocopiers need license. It was thus the case of the appellant that confiscation of photocopiers of CTH 84433930 under Sec-111(d) of the Customs Act 1962 was not justified.
2.2 That without prejudice if their argument on enhancement of value & confiscation of imported goods is not accepted then also the quantum of redemption fine & penalty is very high and the range of redemption fine & penalty in such imports should be 10% & 5% respectively of the value assessed by the departments. He relied upon the following case laws in support of his argument where in similar imports redemption fine & penalty have been restricted to 10% & 5% respectively :-
(i) CC Chennai Vs Rasi Offset Printers [2014 (313) ELT 234 (Tri. Chennai.)].
(ii) Bhavani Enterprises Vs CC Vishakapatname [2010 (262) ELT 536 (Tri-Bang.)].
(iii) BE Office Automation Products Ltd Vs CCE Gurgaon [2014 (300) ELT 486 (P &H)].
(iv) BE Office Automation Products (P) Ltd Vs CC (Prev) Amritsar.
( Final order No. CIA/177-188/12 -Cus dt 25/06/12 passed by CESTAT, New Delhi. ).
3. Sh. S. Nath AC (AR) appearing on behalf of the Revenue argued that appellant has claimed the classification of the second hand imported photocopiers under CTH 84433930 whereas multifunctional photocopies are classifiable under CTH 8443 3100 which was not the classification claimed by the appellant. That neither the issue of valuation nor the nature of second hand copiers & licensing restrictions were agitated by the appellant before the Adjudicating authority. So far as quantum of redemption fine & penalty are concerned Learned AR argued that appellant is a repeated offender & brought old & used photocopies throughout India & was required to be visited with higher penalty & fine. Learned AR, therefore, strongly defended the OIO dt 6/7/2007 passed by the Adjudicating authority.
4. Heard both sides & perused the case records. Appellant has raised the following issues in this appeal;
(a) That valuation of the imported second hand photocopiers has been enhanced arbitrarily based on a Chartered Engineers certificate.
(b) That second hand goods imported by the appellant are Digital Multifunctional Copier Machines for which no import licence was required and that such restriction applied only to ordinary photocopies.
(C) That otherwise also the quantum of redemption fine & penalty imposed is very high & should have been restricted to 10% & 5% respectively as has been held by courts in the other imports of the same appellant.
5. So for as arguments at Para- 4 (a) & (b) above are concerned it has been correctly pointed out by the Learned AR that multifunctional machines have copying facility are classifiable under CTH 84433100. Appellant has claimed and classified their imported goods under CTH 84433930 in the bills of entry which is meant for ordinary photocopying machines. Secondly, the issue of valuation & licensing restriction was not agitated by the appellant before the Adjudicating authority at all. Observations made by the Adjudicating authority in Para 10 to 13 of the OIO dt 6/7/2007 clearly indicate acceptance of enhanced assessable value & DGFT restriction. In view of the above consent given by the appellant we are not inclined to entertain these fresh grounds at this appellate stage when the same issues were not agitated before the lower Adjudicating authority at all.
6. So for as leniency in imposing quantum of redemption fine & penalty is concerned appellant also sought leniency as per Para-14 of the OIO dt 6/7/2007 during adjudication but adjudicating authority imposed a redemption fine of nearly 30% of enhanced value & a penalty equivalent to 10% of the enhanced value. It is observed from the appellants own case decided by Punjab & Haryana High Court reported as BE Office Automation Products Ltd Vs CCE Gurgaon (Supra) following observations were made by Honable Court while reducing the redemption fine & penalty to Rs. 10% & 5% respectively :-
17.?In these appeals, the Tribunal had noticed that the appellant had not cited any comparable cases where redemption fine had been reduced to 10% and penalty to 5%. The appellant citing these judgments of the Tribunal has convincingly shown that there have been instances, where the Tribunal had considerably reduced the penalty.
18.?Though it is true that no standard formula is possible but when facts of the case in hand are taken for evaluation, it is found that the Tribunal had side-tracked the issue only by taking into account the fact that the appellant had already got the goods released on payment of redemption fine, whereas it remains a fact that mere payment of redemption fine in no way dwarfs the right of the appellant to challenge not only confiscation but also imposition of redemption fine and final penalty. Even otherwise, to save cost of detention and demurrage as also to avoid further deterioration in value and quality of goods, making of payment of redemption fine by the importer for release of goods at the earliest, cannot be said to be bad or improper. It also remains a fact that for release of the goods, the appellant had to pay detention and demurrage charges which also entailed cost of legal expenses etc. The very purpose of imposition of redemption fine is to wipe out the element of profit on import of restricted goods. In the cases in hand, element of wiping of profit in the interface of expenditure incurred on detention and demurrage charges as also in defraying of legal expenses and interest, was also required to be considered. The Tribunal did not consider these aspects at all and just side-tracked the entire issue by holding that on making payment of disputed amount, the goods had been released to the importer.
19.?Sequelly, redemption fine is reduced to 10% of the value assessed by the department. Penalty is reduced to 5% of such value except in case of appeal No. 8 of 2012 where penalty has already been reduced to 50% i.e. less than even 5%, by the Tribunal itself.
7. In view of the above observations & the settled proposition of law we are of the considered opinion that in this case redemptpion fine & penalty imposed are excessive & are respectively reduced to 10% & 5% of the value assessed by the department.
8. Appeal filed by the appellant is allowed only to the extent indicated in Para-7 above with consequential relief, if any.
(Operative part of the order was pronounced in the open court.)
(P.K. CHOUDHARY) (H.K. THAKUR)
JUDICIAL MEMBER TECHNICAL MEMBER
Tushar kumar
1 Appeal. No.C/233/07