Customs, Excise and Gold Tribunal - Bangalore
Mudra Offset, Srinivasa Power ... vs Commissioner Of Customs on 30 March, 2004
Equivalent citations: 2004(95)ECC175, 2004(175)ELT470(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. All the appeals arise from a common Order-in-Original No. 1/2001 COMMR/CUS.ADJN dated 12.1.2001 passed by the Commissioner of Customs, Bangalore. The issue being common, the appeals are taken up together for disposal, as per law. The main party, who imported the used offset printing machine and indulged in import and sale of the same by misusing the Actual User Condition of the Notification, had come in appeal, whose appeal was dismissed for non-compliance. The Commissioner, in the impugned order, has dealt with 23 parties who had purchased the said machine from the main importer viz. M/s. Bhuvaneshwari Services. He has upheld the allegation against 10 parties, in respect of whom the jurisdictional DRI could locate the machines used, and has seized the same. Out of the 10 machineries, which were seized from the premises of the purchasers, 5 parties have filed the appeals. The name of the party, description, quantity, date of seizure and value of the machines are noted in the tabulated form below.
SI.No. Name of the party Description of goods Qty.
Date of seizure Value (Rs.) R.Fu/s125 Penalty 112(b)
1. Sri Rama Printing Press, Kalyandura, Ananthpur Distt. A.P. Ryobi 2700 CD Single colour Offset Printing Machine One 21,3.2000 1,25,000 20,000 5,000
2. Sri Srinivasa Power Automatic Or. Ambedkar Road, Sira-572137 Ryobi 3200 MCD Milrton System One 20.3.2000 2,40,000 30,000 5,000
3. M/s. Mudra Offset, S.B.M. Road, Sagar Addressograph Multigraph Mono Colour Offset Printing machine One 23.3.2000 2,50,OOC 30,000 5,000
4. Aridra Printers, 12, Margosa Road, 12th Floor, Malleswaram, Bangalore-3 Ryobi 2800 Offset Printing machine One 12.4.2000 1,75,000 20,000 5,000
5. Utility Printer's New Cross Road, Gopalapura, Bangalore-23 Ryobi 3200 Offset Printing machine One 12.4.2000 2,00,000 22,000 5,000 The Commissioner, after due adjudication, has found the violation in terms of the procedure laid down in the Export-Import Policy 1992-1997 and 1997-2002 wherein the terms laid down are that the import should be with regard to second-hand capital goods having a minimum residual life of 5 years, to be imported by Actual Users and giving an undertaking to the Customs to the effect that the second-hand capital goods being imported have a minimum residual life of 5 years. In terms of the said Policy, the goods are not required to be sold but are required to be used only by the Actual Users. Investigation revealed that the importer M/s. Bhuvaneshwari Services had sold all the imported machineries. Hence, the Commissioner, after noting all the replies made by the respective parties, upheld the allegation of contravention of the EXIM policy. He has taken a lenient view insofar as the imposition of fine and penalty is concerned. He has given a detailed reasoning to over-rule the plea laid down by the parties that there was no mens rea or intention to evade duty. He has noted that the same is not a pre-requisite for imposition of penalty under taxation laws and in this regard has relied on the High Court judgment rendered in the case of Comex Co. v. Collector, 1997 (96) ELT 526 (Mad). He also noted the Tribunal's judgment rendered in the case of Purolator (I) v. Collector, 1999 (113) ELT 493 (T) wherein it has been held that for imposition of penalty, guilty intention of the person is not a pre-requisite and penalty can be imposed if the provisions of law have been violated. He has also noted that any misuse of the Actual User Condition found later on will be covered by the adjudication proceedings. He has held that on such violation, the goods become confiscable and the confiscation fine is imposable. In this regard, he has relied on the Apex Court's judgment rendered in the case of UOI v. Jain Shudh Vanaspati Ltd., 1996 (86) ELT 460 (SC) wherein it has been held that a clearance order under Section 47 obtained by fraudulent means cannot debar the issuance of Show Cause Notice for confiscation of goods under Section 124. He has also noted the judgment of Calcutta High Court rendered in the case of Bengal Tools v. Additional DGRI, 1995 (77) ELT 858 wherein it has been held that the satisfaction of the proper officer under Section 47 is administrative i.e. the goods are not prohibited and the assessed duty has been paid with permission for clearance of goods by the proper officer under Section 47 cannot result in rendering other powers under the Act negatory including the powers under Section 28 to realise short levy and to confiscate the goods under Section 111. He has, however, not proceeded to impose redemption fine equivalent to the market value in terms of Section 125 of the Customs Act, but has restricted only to impose 10% of the value of the goods.
2. Arguing for the appellants, the learned Counsels Shri S. Raghu and Shri S.R. Madhavamurthy, submitted that the Tribunal in the case of Nirmal Surekha v. CC, Amritsar, 2001 (132) ELT 597 (Tri.-Del.) has set aside the redemption fine on the ground that the purchasers of the machinery were also actual users. It is submitted that the appellants were under bona fide belief that as the goods had suffered duty and were cleared through Customs, there was no violation of any law the unable them to purchase the same for actual use. It is stated by the Counsel that as long as there was bona fide on the part of the appellants in purchasing the goods for their actual use, then it is to be held that there has been no violation of the EXIM Policy and in such circumstance, the goods cannot be confiscated and fine be levied. It is stated that if at all there has to be any redemption fine, it has to be only against the main importer viz. M/s. Bhuvaneshwari Services and not on the appellants.
3. The learned Counsels were given time to make their submissions on the judgment rendered by the Tribunal in the case of V. Solomon Jeyapandia, 2002 (148) ELT 810 (Tri.-Chennai) on the same issue, by granting them a day's adjournment. The learned Counsel submitted that the Actual User violation in terms of EXIM Policy has been upheld by the Tribunal and imposition of fine and penalty on the importer had been confirmed. It is stated by them that it was not the case of actual user purchasers but only pertain to cases filed against the actual importers who had violated the EXIM Policy.
4. Learned DR pointed out that the judgment rendered by the Tribunal in the case of V. Solomon Jeyapandian (supra) clearly applies to the fact of the case. The Tribunal has held that so long as there is violation of the conditions of EXIM Policy then the goods become confiscable under Section 111(o) and under Section 125. The goods can be redeemed on payment of fine, which should be to the extent of the market value. It is pointed out by the DR that the appellants did not dispute the correctness of the value adopted by the Department on the seized goods. The Commissioner has already shown leniency in imposing only 10% of the value as redemption fine and Rs. 5,000 as penalty. It is submitted that no further leniency is required to be shown. It is also pointed out that the plea of bona fide belief by purchaser has not been accepted by the Tribunal in the light of several judgments noted therein including the judgment of the Tribunal rendered in the case of Jain Exports Private Limited v. Collector, 1991 (51) ELT 579. The Tribunal has also noted Supreme Court judgment rendered in the case of Dynamatic Hydraulics Ltd. v. Collector, 1992 (58) ELT 553 (SC) wherein it has been observed that imposition of a quantum of fine is purely in exercise and discretion by a quasi-judicial authority like the Tribunal and such discretion should be exercised judiciously, keeping in mind the profit margin of the goods. It is further stated that the Delhi High Court in the case of Jain Exports Pvt. Ltd. v. UOI, 1987 (29) ELT 53 (Del.) observed that resort to Section 125 of the Customs Act, 1962, to impose fine in lieu of confiscation cannot be so exercised as to give a bonanza or profits for an illegal transaction of import. The DR pointed out that all the judgments has been seen by the Tribunal and considered in the case of V. Solomon Jeyapandian and hence the ratio would clearly apply to the facts and circumstances of this case. It is also submitted that the Commissioner has passed a correct and legal order in terms of the judgments noted by him in the order.
5. On a careful consideration of the submission, we notice that this issue has been gone into in great detail by the Tribunal in the case, of V. Solomon Jeyapandian v. CC (supra). The violation of the EXIM Policy has been held to be a case for confiscation of imported goods. The Tribunal has also noted that various judgments on the point have held that the imposition of fine and penalty in the circumstances of the case is justified. The Apex Court's judgment relied by the Commissioner on the point of imposition of penalty has also been noted by the Tribunal in the case, as has been held by the Hon'ble Delhi High Court in the case of Jain Exports v. UOI (supra) that resort to Section 125 of the Customs Act, 1962, to impose fine in lieu of confiscation cannot be so exercised as to give a bonanza or profits for an illegal transaction of import. So long as there is violation of law, Section 111 empowers the proper Officer to confiscate the goods. In terms of Section 125, an option to redeem the goods can be given to the owner or to the person from whose possession the goods were seized. In the present case, the option to redeem has been granted to the appellants from whose possession the goods were seized. Therefore, the appellant's contention that redemption fine cannot be imposed on them but should have been imposed only on the main importer viz. M/s. Bhuvaneshwari Services is not correct and justified and the plea is rejected. Insofar as the judgment rendered in the case of Nirmal Surekha v. CC, Amritsar (supra) is concerned, we notice that the Tribunal, in the facts and circumstances of the case gave a single line order by holding. "The redemption fines imposed on different firms are also set aside".
In the present facts and circumstances of the case and in terms of the judgments noted in the case of V. Solomon Jeyapandian, judgments of Supreme Court, High Court and Tribunal noted in V. Solomon Jeyapandian, the redemption fine cannot be set aside at all. In the present facts and circumstances of the case also the Commissioner has shown leniency and has noted the Apex Court's judgment which has upheld the powers of the proper Officer to grant redemption of goods on payment of fine. So long as the goods become confiscable, the option to redeem the goods are available for the party under Section 125. The same has been exercised by the proper Officer by imposing only a nominal redemption fine of 10% of the value of the goods instead of equivalent market value of the goods. Therefore, the plea of the appellants to reduce or to set aside the redemption fine does not hold much water and requires to be rejected. The penalty imposed is uniformly Rs. 5,000 on all the parties. The parties ought to have been cautioned in knowing as to whether the appellant M/s. Bhuvaneshwari Services has violated any provisions of law. Merely to argue that they had verified with regard to M/s. Bhuvaneshwari Services having paid Customs duty on the goods is not sufficient. The ignorance of law is no excuse in the matter. So long as the goods become confiscable, a grievance cannot be raised that the same cannot be confiscated. When the goods have been confiscated, the proper Officer has got an option to grant redemption of the goods in payment of fine to the owner or the person from whom the goods were seized. Therefore, we do not find any infirmity in the impugned order. The impugned order is legal and proper and has been passed after due consideration of the case in the light of the judgments laid down by the Apex Court, High Court and Tribunal. There is no merit in these appeals and the appeals are rejected.