Custom, Excise & Service Tax Tribunal
Commissioner Of Central Tax, Bangalore ... vs Sri Banashankar Traders on 3 May, 2024
Customs Appeal Nos.20555 & 20556 / 2022
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
Regional Bench Court-2
Customs Appeal No. 20555 of 2022
[Arising out of the Order-in-Appeal No. 357/2021 dated 14.09.2021
passed by the Commissioner of Customs (Appeals) Bengaluru.]
Commissioner of Customs, .......Appellant
City Customs Commissionerate,
C.R. Building, Queen's Road,
P.B. No. 5400,
Bengaluru - 560 001.
Versus
M/s. Sri Banashankr Traders, .....Respondent
No. 7, Anand Complex, 1st floor, New International Airport Road, Hunsamaranahalli, Bangalore - 562 157 AND Customs Appeal No. 20556 of 2022 [Arising out of the Order-in-Appeal No. 358/2021 dated 14.09.2021 passed by the Commissioner of Customs (Appeals) Bengaluru.] Commissioner of Customs, .......Appellant City Customs Commissionerate, C.R. Building, Queen's Road, P.B. No. 5400, Bengaluru - 560 001.
Versus M/s. Sri Banashankr Traders, .....Respondent No. 7, Anand Complex, 1st floor, New International Airport Road, Hunsamaranahalli, Bangalore - 562 157 Appearance:
Mr. K. Vishwanath, Authorized Representative for Appellant Mr. R. Dakshina Murthy, Advocate for Respondent Page 1 of 7 Customs Appeal Nos.20555 & 20556 / 2022 Coram:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Hon'ble Mr. Pullela Nageswara Rao, Member (Technical) FINAL ORDER No._20375-20376 of 2024 Date Of Hearing: 20.02.2024 Date Of Decision: 03.05.2024 Per: P.A. Augustian The issue in the present appeal is regarding confiscation of imported used Digital Multifunctional machines. In appeal No. 20555/2022, the Respondent herein had imported 227 units of Digital Multifunctional Machines and filed Bill of Entry No.3626892 dated 16.10.2017. The goods were classified under CTH 84433100 and the declared value of the goods is Rs. 31,12,840/-. Goods were subjected to inspection and Chartered Engineer assessed the value as Rs. 37,15,953/-. Similarly, in appeal No. 20556/2022, the Respondent herein had imported 209 Units of Used Digital Multifunctional Printers/Devices with accessories (Second Hand) vide Bill of Entry No.3504084 dated 05.10.2017. The Respondent classified the imported goods under CTH 84433100 and declared value of Rs.17,97,192/-. Later, the Chartered Engineer enhanced the value to Rs.29,56,734/- which was accepted by the Respondent.
2. The adjudicating authority issued Order-in-Original No.9/2020, dated 09.01.2020 whereby the goods were ordered for absolute confiscation under section 111(d) and 111(o) of the Page 2 of 7 Customs Appeal Nos.20555 & 20556 / 2022 Customs Act, 1962 and also imposed penalty of Rs. 37,15,953/- under section 112 (a)(i) of the Customs Act, 1962. Similarly, adjudicating authority vide Order-in-Original No. 10/2020 dated 16.01.2020 held that goods are liable for absolute confiscation under section 111(d) and 111(o) of the Customs Act, 1962 and imposed penalty of Rs. Rs.29,56,734 /- under section 112 (a)(i) of the Customs Act, 1962. Aggrieved by both the orders, Respondent filed appeals before the Commissioner (Appeals) and Appellate authority allowed the appeals without specifying any amount regarding fine and penalty. Aggrieved by said orders, present appeals are filed by revenue.
3. When the matter came up for hearing, Learned AR submits that the used digital multi-functional machines are restricted for import and as per the guidelines issued by different authorities, such goods cannot be released for home consumption. Goods are imported in violation of provision of Customs Act 1962, Hazardous and Other Wastes (Management and Trans boundary Movement) Rules, 2016, E-Waste Management Rules, 2016 and Bureau of Indian Standards Act, 1986 read with Electronics and IT Goods requirement of Compulsory Registration Order, CRO 2012, issued by the Meity as well as provisions of FTP 2015-20, read with Foreign Trade (Development of Regulation) Act, 1992.
4. Learned counsel appearing on behalf of the respondent submits that the issue is squarely covered by the decision of this Tribunal in the following cases which was upheld by Hon'ble High courts and release of goods allowed by Hon'ble Supreme court. Page 3 of 7
Customs Appeal Nos.20555 & 20556 / 2022 a. M/s. Photofax Systems, Delhi vide Final Order No.20728/2023 dated 24.07.2023.
b. Commissioner of Customs Vs. M/s Atul Automation Pvt. Ltd., dated 24.01.2019 -2019(365) ELT 465 (SC). c. Final Order No.21308-21309/2019 dated 20.12.2019 in M/s. S.R. Enterprises & M/s. Digital Express. Maintained by Hon'ble High Court of Karnataka, in CC Vs. Digital Express and S. R. Enterprise 2021 (375) 643 (Kar) whereby the appeal filed by the Department was dismissed.
d. M/s. M G Copiers Vs. Commissioner of Customs, Bangalore vide Final Order No.20786/2023 dated 09.08.2023.
e. M/s. J J Graphics Vs. Commissioner of Customs, Bangalore vide Final Order No. 20788/2023 dated 09.08.2023.
f. M/s. Skylark Office Machine Vs. Commissioner of Customs, Bangalore vide Final Order No. 20789/2023 dated 09.08.2023.
g. Print Solutions Vs. CC, vide Final Order dt.20790/2023 dated 09.8.2023.
h. Accord Digitech Vs. CC, vide Final Order No.20844/2020 dated 15.12.2020 i. Sri Sai Graphics Vs. CC, Final Order No.20572- 20530/2023 dated 08.6.2023 j. Photofax Systems Vs. CC, Final Order No.20728/2023 dated 24.07.2023.
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Customs Appeal Nos.20555 & 20556 / 2022 k. Srivenkateshwara Repro Graphics and others Vs. CC, Final Order No.20330-20340/2019 dated 03.04.2019.
5. Heard both sides perused the records.
6. We find that the issue is no more res-integra. The issue regarding confiscation of used Digital Multifunctional machine was considered by various authorities including the Hon'ble Supreme Court in the matter of Commissioner of Customs Vs. M/s Atul Automation Pvt. Ltd (SC) (supra) and Digital Express (supra) where it is held that: -
17. On perusal of the aforesaid judgment, we find that the Hon'ble Supreme Court has held that MFDs under the Foreign Trade Policy, which provides both prohibition as well as restriction on import and export, was not a prohibited item of import, but only restrictions could be imposed on imports of such goods; That the Hon'ble Supreme Court also noted that the respondents therein did not possess the necessary authorization for their import.
But while considering the matter, reference had to be made to the Foreign Trade Act and the Policy made thereunder. That in the event of there being contravention of Foreign Trade Act, Rules, Orders and the Policy framed under the said Act, the manner in which discretion could be exercised for release of the goods on remand of redemption charges becomes pertinent; That having regard to Section 3(3) of the Foreign Trade Act read with Section 18A of the said Act, Section 125 of the Act will become relevant. Since MFDs are not a prohibited item of import but restricted item of import, discretion under Section 125 of the Act could be exercised in the matter of redemption of the restricted goods imported with authority for determination of the redemption fine and penalty. In that case, the Hon'ble Supreme Court held that Page 5 of 7 Customs Appeal Nos.20555 & 20556 / 2022 respondents therein were entitled to redemption of the consignment on payment of the market price at the reassessed value by the Customs Authority with fine under Section 112(a) of the Act.
7. As per the above decisions/judgments, even if such goods are imported in violation of ibid provisions, it is not liable for absolute confiscation. In the absence of any evidence regarding margin of profit, it is settled that, such goods can be allowed to be redeemed on payment of redemption fine of 10% of enhanced value and penalty of 15% of the enhanced value. Thus, there is no infirmity in the order of allowing release of goods subject to payment of fine and penalty as held by Appellate authority. However, as submitted by Learned AR, as per the order of the Commissioner (Appeals), there is no clarity in the order whether adjudicating authority is allowed to pass fresh order after re-determining the redemption fine and applicable penalties for the provisional release of the goods. It is further prayed that the Commissioner (Appeals) has set aside the order by the Joint Commissioner on the ground that Hon'ble Supreme court has vide Order No. 87407/2021, dated 11.08.2021 allowed the provisional release of goods and stayed the confiscation thereof. Learned AR further submits that the Order-in-Appeal had neither indicated the quantum of redemption fine nor remanded the case to the original authority for determining the redemption fine as per law. It was not the case of Commissioner (appeals) that goods in the case were not liable for confiscation, since they are imported in violations of various non-tariff provisions of Customs Act and other Statutory provisions.
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Customs Appeal Nos.20555 & 20556 / 2022
8. Following the above, appeals are partially allowed and upheld the order of confiscation. However adjudicating authority is directed to release the goods imported under Bill of Entry No. 3626892 dated 16.10.2017 to respondent on payment of appropriate Customs duty on enhanced value and on payment of redemption fine of Rs. 3,70,000/- and penalty of Rs. 1,85,000/-. Similarly, adjudicating authority is directed to release the goods imported under Bill of Entry No. 3504084 dated 05.10.2017 to respondent on payment of appropriate Customs duty on enhanced value and on payment of redemption fine of Rs. 3,00,000/- and penalty of Rs. 1,50,000/-.
8. In the result the appeals are allowed partially subject to the above conditions.
(Order Pronounced in Open court on 03.05.2024) (P.A. Augustian) Member (Judicial) (Pullela Nageswara Rao) Member (Technical) Ganesh....
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