Custom, Excise & Service Tax Tribunal
M/S. Impact Systems Inc vs Cc, Tuticorin on 15 April, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/PD/70/08 & C/94/2008
(Arising out of Order-in-Original No. 05/2008 dated 26.02.2008 passed by the Commissioner of Customs Tuticorin).
For approval and signature
Honble P. G.CHACKO, Member (Judicial)
Honble P.KARTHIKEYAN,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?
3. Whether the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _______________________________________________
M/s. Impact Systems INC., : Appellants
Vs.
CC, Tuticorin : Respondent
Appearance Shri A.K. Jayaraj, Adv., for the appellants Shri M.K.A.K. Mohiddin, JDR for the respondent CORAM Shri P.G. CHACKO, Member (Judicial) Shri P. KARTHIKEYAN, Member (Technical) Date of hearing : 15.04.08 Date of decision : 15.04.08 FINAL ORDER No.________/2008 Per P. KARTHIKEYAN This appeal filed by M/s. Impact Systems Inc, Kolkatta, is directed against an order of the Commissioner of Customs, Tuticorin. In the impugned order the Commissioner enhanced the assessable value of old and used photocopiers from the declared value of Rs. 14,28,605/- to Rs.20,45,146/- (C&F). The impugned goods were sought to be cleared under Bill of Entry No. 43008 dated 12.2.2008. On examination of the goods, the analog photocopiers and digital multi-function machines (print and copying) were respectively 30 and 73 in number as against the declared 29 and 72. On examination by the Chartered Engineer, the value was estimated at Rs. 20,45,146/- (C&F) as against the declared Rs. 14,28,605/- (C&F). As the quantity and value of the imported goods were found to be not as declared and were in excess, notice was issued proposing to confiscate the impugned goods under Section 111(d), (l) and (m) of the Act. It was proposed to redetermine the value at Rs. 20,45,146/-. The notice contained proposal to impose penalty on the importer under Section 112 (a) of the Customs Act, 1962. After due process of law, the Commissioner passed the following order. The imported 30 units of old analogue photocopiers and 73 units of old digital multi-function (print and copying) machines are confiscated under Section 111 (d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992 and Section 111 (l) and 111(m) of the Act for misdeclaration of quantity and value. The Commissioner offered an option to the importer to redeem the confiscated goods on payment of a fine of Rs. Eight lakhs and imposed a penalty of Rs. Eight lakhs on M/s. Impact Systems under Section 112 (a) of the Act.
2. Even though detailed grounds were taken in the appeal against the impugned order, at the time of hearing, the Counsel for the appellants abandoned the challenge to the order as regards valuation, confiscation, fine and penalty. He submitted that the appellants do not challenge the valuation of the impugned goods by the Commissioner but prayed for reducing the fine and penalty to reasonable amounts. He submitted that the same Commissioner in a similar case of import of old photocopiers had observed that margin of profit of used photocopiers was 25% of the sale price. In the said case, the goods of value Rs. 21,39,753/- were confiscated and redemption allowed on payment of a fine of Rs.5,35,000/-. The appeal against the said order was disposed by this Bench by retaining the fine at Rs.5.35 lakhs and reducing the penalty from Rs. 16 lakhs to Rs. Two lakhs.
3. The Counsel also submits a copy of Final Order No. 216/08 of this Bench wherein a case involving facts similar to the instant case was decided by modifying the redemption fine from Rs. 15 lakhs to Rs. Five lakhs and penalty from Rs. Five lakhs to Rs. Three lakhs. The Counsel prays that the appellant may be allowed similar relief as in the cited cases.
4. We have carefully considered the facts of the case and the rival submissions. On a perusal of the impugned order, we find that the adjudication order does not indicate a reliable basis for the fine ordered. Normally, in cases of confiscation for import without licence, redemption fine equal to the margin of profit is imposed. We find that in similar cases of confiscation of old photocopiers of comparable value, fines ranging from Rs.15 lakhs to a little above rupees Five lakhs had been ordered. In one of the contemporaneous orders cited by the Ld. Counsel, Commissioner recorded that profit in such cases is around 25%. However this was not ascertained on market enquiries. In the instant case also market enquiries have not been conducted. As the value of the impugned goods has been determined to be Rs. 20.45 lakhs, we consider a fine of Rs. Four lakhs will wipe out the margin of profit of the importer. We also find that a penalty of Rs. Two lakhs will be appropriate considering the facts of the case. Accordingly, we dispose the appeal by modifying the fine and penalty as above.
(Operative part of the order pronounced in open Court)
(P.KARTHIKEYAN) (P.G.CHACKO)
MEMBER(T) MEMBER (J)
BB
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