Punjab-Haryana High Court
M/S Be Office Automation Products ... vs Commissioner Of Central Excise on 18 November, 2013
Author: Rajive Bhalla
Bench: Rajive Bhalla
Customs Appeal No.14 of 2011 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
(1)
Customs Appeal No.14 of 2011 (O&M).
Decided on:-November 18, 2013.
M/s BE Office Automation Products Limited, Baddi. .........Appellant.
Versus
Commissioner of Central Excise, Gurgaon. .........Respondent.
(2)
Customs Appeal No.7 of 2012 (O&M).
Decided on:-November 18, 2013.
M/s BE Office Automation Products Pvt. Limited, Baddi. .......Appellant.
Versus
Commissioner of Customs, Amritsar. .........Respondent.
(3)
Customs Appeal No.8 of 2012 (O&M).
Decided on:-November 18, 2013.
M/s Bhagwan Electro Photo Copiers, New Delhi. .........Appellant.
Versus
Commissioner of Customs and Central Excise, Delhi-III, Gurgaon.
.........Respondent.
CORAM: Hon'ble Mr. Justice Rajive Bhalla
Hon'ble Mr. Justice Dr. Bharat Bhushan Parsoon.
*****
Yag Dutt
2013.11.21 15:38
I attest to the accuracy and
integrity of this document
Customs Appeal No.14 of 2011 -2-
Argued by:- Mr. Jagmohan Bansal, Advocate for the appellants.
Ms. Ranjana Shahi, Advocate for the respondents.
Dr. Bharat Bhushan Parsoon, J These three customs appeals are directed against orders of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as, the Tribunal). As facts and circumstances are the same, these appeals have been taken up together for adjudication.
2. For convenience and clarity of the matter in dispute, facts of Customs Appeal No.8 of 2012 are being examined.
3. The appellant M/s Bhagwan Electro Photo Copiers, New Delhi, imported 92 low duty and 16 medium duty "Old & used mainframes of digital copy printers assemblies consisting of functional gears, feeding rod, fixing rollers, clutches, ADF, Sorters & trolley etc.". The appellant filed bill of entry No.001 dated 22.1.2007 declaring value of low duty machines and medium duty machines as US$ 150 per set and US$ 175 per set respectively. The respondents vide their order of 14.3.2007 taking into account declared value by the appellant, assessed the value at Rs.15,41,609/-. In addition, penalty of Rs.3 lacs and redemption fine of Rs.9 lacs was also imposed.
4. Aggrieved with this order in original, the appellant preferred an appeal before the Commissioner of Customs & Central Excise, Delhi-III (Appeals). Though order in original so far as it related to loading of assessable value and change of classification, was set aside in appeal, but to the extent of confiscation of goods, redemption of fine and penalty, it was upheld.
5. The matter was taken in second appeal before the Tribunal, where though penalty was reduced from Rs.3 lacs to Rs.50,000/-, but imposition of redemption fine was upheld.
Yag Dutt 2013.11.21 15:38 I attest to the accuracy and integrity of this document Customs Appeal No.14 of 2011 -3-6. In all these appeals, contesting the impugned orders, it is averred by the assessees that the Tribunal did not consider its own orders in identical cases where redemption fine and penalty had been reduced to 10% and 5% respectively. It is claimed that the Tribunal also lost sight of the fact that the goods in question were not even 'restricted goods' during the relevant time and parts of photocopier or machines were freely importable.
7. Per contra, contention of the respondents is that knowing fully well that articles imported by the appellant were restricted goods, liable for custom duty, neither complete disclosures were made nor genuine and truthful value was declared. Legality of impugned orders was asserted.
8. We have heard counsel for the parties while going through the paper books.
9. The main argument addressed by counsel for the appellant is that articles imported were not restricted goods, and even otherwise, the Tribunal had not maintained uniformity in assessing value of the articles as also in imposing of redemption fine and penalty.
10. At the outset, it may be noticed that the goods were got released by the importer on payment of redemption fine etc. apparently to save cost of detention and demurrage as also to save goods from deterioration in value and quality. When the entire matter is gauged from the very beginning, it is found that the plea that goods imported by the appellants were not restricted goods had never been taken before the adjudicatory or appellate authorities. Even otherwise, claim of the appellant that articles imported by them were not restricted goods, could not be supported by them by any material or evidence on record.
11. In all these cases, goods imported by the appellant were photocopier machines. A comparative analysis of various orders passed by the Tribunal reveals that its approach is not uniform. To demonstrate, details Yag Dutt 2013.11.21 15:38 I attest to the accuracy and integrity of this document Customs Appeal No.14 of 2011 -4- of these appeals are given in tabular form, as under:
Sr. Appeal Number Value Fine Penalty Total In %
No. Assessed approximately
1. Appeal No.14 of 2011 15.41 lacs 7.5 lacs 2.5 lacs 67
2. Appeal No.7 of 2012 20.71 lacs 10 lacs 3 lacs 65
3. Appeal No.8 of 2012 8.29 lacs 9 lacs 50,000 110
12. It is, thus, to be noticed that in this appeal where declared value is 8.29 lacs, fine is 110% of the assessed value. In two other cases also, the fine sharply differs. Even in case of penalty, completely different amount has been imposed, though facts are identical.
13. The main grievance of the appellant is that there is no uniformity in imposition of final penalty by the Tribunal and even in cases of similarly situated importers, different yardsticks have been applied. It is urged that imposition of fine has been so heavy that it makes cost of the goods prohibitive causing great loss to the appellant.
14. Contention of the respondent-department, on the other hand, is that when the restricted goods were being imported, those were impounded and were released only on payment of fine and penalty, imposition of which varies from case to case and no strait-jacket standard formula is possible to be adopted. It is urged that imposition of redemption fine and final penalty even otherwise has to be prohibitive so as to dissuade import of restricted goods and to make it prohibitive and non-profitable.
15. When facts and circumstances are gone through, it transpires that cases are not lacking where redemption fine and penalty had been reduced to 10% and 5% respectively of the value of goods assessed by the authorities.
16. Counsel for the appellant has made reference to Selection Enterprises Vs. Commissioner of Customs, Hyderabad 2008 (232) E.L.T. Yag Dutt 2013.11.21 15:38 I attest to the accuracy and integrity of this document Customs Appeal No.14 of 2011 -5- 755 (Tri. Bang), Rex Printing Press Vs. Commissioner of Customs, Kolkata 2005 (184) E.L.T. 73 (Tri. Bang) and Bhavani Enterprises Vs. Commissioner of Customs 2010 (262) E.L.T. 536. In the last case, it was ordered that redemption fine shall not be in excess of 15% of the value of imported goods, whereas penalty of 5% of value on imported goods as certified by chartered engineers was upheld. It may be noticed that in these three cases cited by the appellant, there was import of second hand photocopier machines etc.; so is the case in the present appeals.
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 Yag Dutt 2013.11.21 15:38 I attest to the accuracy and integrity of this document Customs Appeal No.14 of 2011 -6- 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.
20. As a consequence, the impugned orders are modified to the extent as indicated above and the appeals are partly allowed.
(Dr. Bharat Bhushan Parsoon) Judge (Rajive Bhalla) Judge November 18, 2013 'Yag Dutt'
1. Whether Reporters of local papers may be allowed to see the judgment?
2. Whether to be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Yag Dutt 2013.11.21 15:38 I attest to the accuracy and integrity of this document