Customs, Excise and Gold Tribunal - Calcutta
Hoogly Mills Project Ltd. vs Commissioner Of Customs on 10 June, 2003
Equivalent citations: 2003(89)ECC154, 2003(162)ELT172(TRI-KOLKATA)
JUDGMENT Jeet Ram Kait, Member (T)
1. All these four appeals arising out of four separate orders in original passed by the Commissioner of Customs, Visakhapatnam, have been filed by M/s Hoogly Mills Project Ltd. whereby the Commissioner has confiscated the goods with an option to redeem the same on payment of fine and penalty as under:
O/O No Appeal No. Value of goods R/F Penalty 1/2002 C/186/02 62,96,554 14,25,000 6,30,000 2/2002 C/192/02 23,25,831 5,25,000 2,35,000 4/2002 C/207/02 76,64,036 17,60,000 7,65,000 7/2002 C/210/02 26,18,340 6,50,000 2,60,000
2. The cross objection has been filed by the department against Order-in-Original No. 7/2002 dated 28.3.2002 seeking dismissal of the appeal filed by the party against the said order in original, inasmuch as in all these four appeals and in the cross-objection, the issue to be decided is similar, they were heard together and orders were reserved. They are therefore taken up together for disposal according to law.
3. The brief facts of the case are that in all these appeals the appellants have imported used/second-hand jute mill machineries complete with electricals and accessories, under different Bills of Entries on different dates. The assessable value declared by the assessee, in each Bill of entry and percentage of value enhanced and the year of manufacture of the machineries in all these cases are as under:
Appeal No B/ENo& date Assessable value % enhancement Year of mff .
C/186/02 2767/27.12.01 44,77,263
-1993
0083/17.1.02 18,19,291
-1993
C/192/02 0206/31.1.02 17,90,105 33.33% 1994 0244/7.2.02 5,35,726 33.33% 1994 C/207/02 0413/5.3.02 24,02,655 25% 1992 0414/5.3.02 24,84,953 25% 1993 0415/5.3.02 27,76,428 25% 1993 C/210/02 0492/18.3.02 26,18,340 25% 1993 In all these appeals, the appellants have declared the country of origin as China & England and in support of the same they have submitted the copy of Country of Origin Certificates issued on different dates by one Mr. Yongyuth Piyamapornchai, B. Eng. of M/s P&A Adjustment Company Ltd. Bangkok, Thailand, in respect of all these consignments. In the certificates it was stated that the machineries were in good working condition with a minimum 10 years residual life and no major repairs/replacements had been carried out on the machinery. Further, in the certificates issued it was stated that the goods were inspected at Kenya in the case of the goods covered by 0206 and 0244 and in all other cases, in China on different dates.
3.1 In terms of para 5.3 of the Exim policy in force all second-hand goods shall be restricted for import and may be imported only in accordance with the provisions of the policy (ITC (HS) Hand Book volume 1 public notice or a licence issued in that behalf. However, para 5.4 of the Hand Book of Procedures Vol. 1 AM 1997-2002 stipulates that import of second-hand capital goods which are not more than 10 years old, shall be allowed freely provided that the same shall not be transferred, sold or otherwise disposed of within a period of two years from the date of import except with the prior permission of the DGFT. Intelligence were gathered by the Customs House which revealed that certain importers were importing second-hand machinery either directly from the closed mills and/or through overseas agents and that the second-hand machines available with the closed jute mills abroad were outdated technology and they had already lived their usual span of life and that the importers were misdeclaring the age of the machinery as there was no supporting documents in regard to the age of the machinery. The machineries were therefore, subjected to detailed examination by a team of officers of the Customs House in the presence of the importers' representative, the Customs House agent's representative and Shri G. Madhu Babu of M/s S.G.S. India Ltd, Visakhapatnam, who are independent Chartered Engineers. The joint inspection revealed that certain parts were manufactured even as far back as 1969 and the machines imported were more than 10 years old. It was alleged by the department that the appellants have under-invoiced/misdeclared the value of the goods as also the age of the machinery and hence the value declared by them was not acceptable in terms of Rule 4 of the Customs Valuation Rules (Determination of Price of Imported goods) Rules, 1988. Show cause notices were therefore issued to the appellants and after considering the reply and after granting personal hearing to the appellants, the Commissioner has passed the impugned orders as aforesaid. The appellants have come in appeal against the findings of the adjudicating authority. In the grounds of appeal, they have inter alia stated as under:
A. Appeal No. C/186/02.
(a) The finding of the Commissioner that the machineries were more than 10 years old is not correct in view of the fact that there is a certificate dated 10.10.2001 and 22.1.2002 of the Chartered Engineers., M/s P&A Adjustment Co. Ltd., according to which the year of manufacture of the machineries is 1993. As per Certificate dated 23.1.2002 of M/s Chengde, the said machineries were manufactured in 1993 by M/s China Textile Machines Group. Shanghai, China and installed at their Chengde Factory and the year of manufacture and the name of the manufacturer were clearly certified in the certificate issued by M/s Chengde. The Commissioner has rejected the certificate without any supporting material.
(b) In the order placed by the appellants as well as in the shipping documents the year of manufacture was mentioned as 1993. These documents have been ignored by the Commissioner without any reason whatsoever,
(c) The Chartered Engineer has also certified the year of manufacture of the machineries as 1993.
(d) In terms of Circular No F. No. 493/124/86-Customs (Sea) dated 19.11.87 and Public Notice No. 238/95 dated 20.11.95 in the matter of import of second machineries the certificate issued by foreign Chartered Engineer was required to be accepted by the Department.
(e) The valuation done by the Chartered Engineers was on the basis of the estimated C & F value of equivalent new machinery in the year 1993.
(f) So far as the valuation is concerned, the Customs authorities have accepted the certificate of the Chartered Engineer and when the said certificate has been accepted for the purpose of valuation which is based on the year of manufacture, the Customs authorities cannot take a different view in regard to the year of manufacture of the machine.
(g) The Commissioner has heavily relied upon the reports dated 8.2.2002 and 12.2.2002 of SGS India Pvt. Ltd. to come to a conclusion that the age of the machinery is more than 10 years old. The conclusion arrived at by the Commissioner is not fully supported by evidence inasmuch as even as per the reports, it is only in respect of 2 machineries and 42 accessories, the year of manufacture was found to be more than 10 years old while in respect of 277 machineries and the electrical/accessories of 237 machines there was no material or proof to support the claim of the department that these machines are more than 10 years old. Hence the report cannot be made applicable to the ma chines/accessories on which there was no report.
(h) Report of the Customs Team is unsubstantiated and without any basis. Further the purported observations were made by the Customs officials and not by any expert on machinery.
(i) The Customs officers have found the year of manufacture to be more than 10 years in respect of 42 accessories, mostly motors, whereas the relevant facts were clarified by M/s Chengde vide their letter dated 30.1.2002 that all the jute machineries were originally manufactured in 1993. However, the electrical motors and other electrical accessories were got damaged due to the running of the machinery and such damaged motors were replaced with easily available and cheap motors till such time the original motors were repaired. The letter of M/s Chengde cannot be ignored to arrive at a finding against the appellants.
(j) The finding of the Commissioner that the appellants did not dispute about the finding of the Customs Team regarding the age of the machinery is incorrect.
B. Appeal No. C/192/02 Similar grounds as in appeal No. C/182/02 have been taken in the this appeal also. The further grounds taken are that,
(a) As per the certificates of Polysack the said machinery were installed at their Thika factory and these were manufactured and supplied in the year 1994 by M /s General Textile and the said company was not related to the appellants in any manner. Further, the machineries were inspected by the Chartered Engineers and there was no reason whatsoever to reject the certificates of Polysack. Further, Greenworth had agreed to sell the said machinery of the year of manufacture 1994. All the supporting evidence furnished by the assessee have been ignored by the Commissioner while arriving at a conclusion against the appellants. Therefore finding of the Commissioner that there was variation in the certificate dated 22.1.2002 compared to the certificate dated 28.8.2001 or that the certificate dated 22.1.2002 was a managed certificate, is without any basis and is based on mere surmises and conjectures.
(b) In this appeal it is only in respect of one machine and two motors that the year of manufacture was allegedly found and reported to be more than 10 years old. In respect of the remaining 17 machineries and the electricals/accessories the Customs team did not find any material or evidence or proof that the same were more than 10 years old. Therefore, the adverse finding relating to age of the machinery in respect of one machine and two motors cannot be made applicable to the remaining 17 machines and other electricals and accessories. Even in respect of the two motors, on one motor markings were BSS 2613-1955 which was merely a British Standard Specification and it does not relate to the year of manufacture. These lapses were brought to the notice of the Commissioner vide para 7 of the reply filed by the appellants, but the Commissioner has ignored the same. Therefore, confiscation of those items on which there was no report of the Customs, was bad in law and should be set aside.
(c) Name of the manufacturer i.e. James Mackie & Sons was mentioned in the body cover of one machine only, but the Commissioner has proceeded on the basis as if the whole machineries were manufactured by the said manufacturer. The report of M/s S.G.S., the Chartered Engineers, who were also associated with the inspection of the machinery does not mention any such difference in name.
(d) Weight of the machine can never be a criteria for determining the transaction value and hence the view taken by the Commissioner that the transaction value of such old and used machine can be worked out with reference to weight cannot be sustained.
(e) The finding of the Commissioner that the machine has been imported on a scrap value is not supported by any evidence.
(f) The letter of S.G.S., the Chartered Engineers, was obtained by the department at the time of issue of show cause notice. Further, the conclusion arrived at by the Commissioner that the declared value by the importer appeared to be low by around 30% to 35% considering the residual life of the machinery, is without any basis.
(g) The S.G.S. i.e. the Independent Chartered Engineers in their report dated 12.2.2002 had found that most of the spares and accessories were in heavy wear and tear condition, there was no necessity for the Customs Department to seek a further letter dated 20.2.2002 from S.G.S., the independent Chartered Engineer relating to the value of the machine, particularly when there was a certificate dated 28.8.2001 issued by M/s P. & A. Adjustment Co. Ltd, Chartered Engineers.
C. Appeal No. C/207/02 Similar grounds as in Appeal No. C/186/02 have been taken in this appeal too. Further grounds taken are:
(a) As per the Certificate dated 28.1.2002 issued by M/s Baichewng Jute Textile Stock Ltd. Company, China, the machines were manufactured and supplied in the year 1992 by M/s China Textile Machine Group, China.
(b) Certificate dated 6.2.2002 was issued by M/s Hunam Hanshou Hinxing Fangzhi Youxian Gonssi, China at whose factory 171 machines were lying installed. The certificate clearly stated that the machines were manufactured and supplied in the year 1993 by China Textile Group, Shanghai, China. There was no justification to ignore these certificates.
(c) The Commissioner's finding that the certificates were corrected in the light of the earlier order dated 15.2.2002 relating to other imports is based on conjecture and surmise.
(d) Certificate was granted in respect of a total number of 210 second-hand jute mill machinery and the identification marks of each item of machinery was mentioned in the certificate and in none of the main items of machinery or frames, there was any marking to show mat the same was more than 10 years old.
(e) The Commissioner totally erred in holding that the condition of the machine showed heavy use or more age. This finding on visual examination of the machine by the Customs Officers is not based on any material evidence.
(f) So far as switchboard and electricals are concerned these are insignificant items in the nature of spares and are replaced when required and for this reason the entire certificate cannot be ignored.
(g) S.G.S. the Chartered Engineers, appointed by the Customs Department has given the certificate clearly stating that the exact age of the machinery cannot be ascertained. At the same time, S.G.S. has also certified that the machines will have minimum residual life of 10 years provided the machines, equipments and their accessories are assessembled, commissioned and maintained as per manufacturer's instructions. Their report cannot be taken as basis to come to any conclusion than the machines were more than 10 years old. When certificate given by the foreign Chartered Engineers were verified by S.G.S., they had not made any adverse comments.
(h) It is only in respect of 31 switchboards and other electricals that the year of manufacture was allegedly found and reported to be more than 10 years old.
(i) The value declared by the appellants have not been disputed either by the Customs Team or by S.G.S. or by the Commissioner. Even as per the norms laid down by the Government, in respect of old and used machinery of more than six years old, the total depreciation allowable from the original value is 70%. As against this, the value declared by the appellants less than the maximum depreciation allowable. For instance in respect of the first item mentioned in the Chartered Engineer's certificate, the original price of the new machine was US D 2250 and after deducting depreciation of 70% the value would come to US D 675 whereas the value declared by the appellants was US D 1100. Identical is the position in respect of each of the machine.
D. Appeal No. C/210/2002.
In this appeal also the grounds taken are similar to the grounds taken in other appeals. The further grounds taken are:
(a) The finding of the Commissioner that the certificate issued by the Chartered Engineer had been corrected by the assessee in the light of the finding recorded by the Commissioner in his earlier order dated 15.2.2002 relating to other imports is without any basis. The certificates in the present case is issued on 24.11.2001. Therefore, the finding of the Commissioner that the certificate has been corrected based on his order dated 15.2.2002 is not correct and is baseless.
(b) There are total 128 numbers of machinery and their electricals and accessories. Even as per the report of the Customs Team and the S.G.S., only in respect of 10 looms and 6 electricals that the year of manufacture was allegedly found and reported to be more than 10 years old. In respect of the remaining 118 machines and the remaining electricals there was no such adverse finding. The adverse, finding relates to merely 2.0% of the total goods. Hence the said adverse finding cannot be made applicable to the remaining machines to come to a conclusion that all the 128 machines were more than 10 years old.
4. Shri D.K. Saha, learned consultant appeared for the appellants and reiterated the grounds taken in the appeals and submitted that in all these appeals, the appellants have submitted all the relevant documents before the Customs authorities, such as order of confirmation, commercial invoice of the foreign supplier, packing list and the weight list, certificate regarding year of manufacture of the machines by the chartered engineer's certificate. The foreign Chartered Engineers have also certified that these machines have residual life of more than 10 years. But all these documents have been rejected by the Commissioner without any basis and the Commissioner has come to a conclusion merely on surmise and conjectures. He further submitted that all these machines were again subjected to examination by Independent Chartered Engineers/viz. M/s S.G.S. India Ltd., Visakhapatnan chosen by the Customs Department and even according to their report they have not come up with any conclusive evidence that the machines were more than 10 years old except in certain parts/accessories such as motors and control panels etc. What the report said was that the physical condition of the goods indicated that the age of the machinery was beyond 10 years. He further submitted that the Commissioner has come to the conclusion that all the machines were more than 10 years old based on marking etc. found mostly motors, body cover switch board etc. on certain machines and not on the whole lot as explained in the grounds of appeal. Therefore, the conclusion arrived at by the Commissioner based on few parts and accessaries of few jute mill machines cannot be a reason to confiscate the whole machines imported in all these cases by alleging mis-declaration. He submitted on this ground alone the orders impugned are liable to be set aside. He further submitted that while the Commissioner has accepted the value of the new machines of identical nature as certified by the foreign Chartered Engineer, he has chosen to ignore the certificate regarding age of the machinery given by the same chartered engineers and this amounts to accepting or rejecting the certificate in part and it is well settled that a certificate cannot be accepted or rejected in part. He has also invited our attention to the Circular issued by the Ministry vide F. No. 493/124/86-Customs (Sea) dated 19.11.1987 under which the Certificate issued by the foreign Chartered Engineer was directed to be accepted by the Department and the Commissioner cannot proceed beyond the scope of the instructions issued by the Department. He has also invited our attention to the following case laws in support of his plea for allowing the appeals:
(1) 2001 (75) ECC 8 (SC): 2001 (129) ELT 273 (SC) in the case of K.R. Steel Union Ltd. v. CC, Kandla. In this case the importer had imported new parts constituting 9% of the total value alongwith second-hand goods of not more than 10 years old and the department took the view that the importer had imported new machinery in the guise of old machinery and on appeal before the Hon'ble Supreme Court, the Apex Court held that it is not possible to come to the conclusion that the import was in contravention of the import licence.
(2) 1999 (107) ELT 94 in the case of Essar Graphics v. CC. In this case it was held by the Tribunal that transaction value of the second-hand offset printing machine imported cannot be discarded merely because Chartered Engineer's certificate gives wrong date (Year) of manufacture.
(3) 2000 (72) ECC 673 (SC): 2000 (122; ELT 321 (SC) in the case of Eicher Tractors Ltd. v. CC wherein it was held that if the transaction value can be determined under Rule 4(1) and does not fall under any of the exception in Rule 4(2), there is no question of determining the value under the subsequent Rules.
He submitted that in the instant case there was no reason to reject the transaction value declared by the appellants as the department has not proved that the appellants' case comes under any of the exceptions as provided under Rule 4 (2) of the CVR, 1988. He therefore, sought for allowing the appeals with consequential relief.
5. Shri A.K. Pandit, learned JDR appearing on behalf of the Revenue referred to the finding portions of the orders impugned and submitted that in all these cases the Commissioner's order reflects application of mind and the orders are legal and proper and should be sustained. He submitted that in this case, the importers have imported machinery which are more than 10 years old under the guise of machines of less than 10 years old. He submitted that the examination report of the M/s S.G.S. India Pvt Ltd. independent Chartered Engineers cannot be assailed by the appellants inasmuch as the appellants were also associated with the inspection of the imported machines. He therefore, prayed for upholding the orders impugned and rejecting the appeals.
6. We have carefully considered the rival submissions and gone through the entire case records and perused the case laws cited by the Appellants. We observe that in all these imports, the seller is M/s Greenworth, International Pte. Ltd. Singapore and the buyer/importer is the appellants herein. P.A. Adjustment Co. Ltd. is the Foreign Chartered Engineers while M/s S.G.S. India Pvt. Ltd. is the Independent Indian Chartered Engineers appointed by the Customs Department. We observe that the issue arising for determination in these appeals, is whether the Commissioner was right in rejecting the transaction value declared by the appellants under Rule 4 of the CVR and proceeding to determine the value under Rule 8 of the CVR and whether merely because certain parts/accessories imported alongwith the main machineries were found to be of more than 10 years old, confiscation is warranted in respect of all the machinery imported.
7. We observe that the Commissioner has proceeded to reject the value declared by the appellants on the ground that the Certificate issued by the foreign Chartered Engineer cannot be accepted. This conclusion was reached by him based on the examination report of the M/s S.G.S. India Ltd. an independent Indian Chartered Engineer according to whose report, parts of the machines mostly motors, switchboards, electrical items, etc. etc were much more than 10 years old and the visual examination also proved the wear and tear. Further the said Chartered Engineers have also certified that the machines have more than 10 years residual life. It was on these basis that he came to the conclusion that the foreign Chartered Engineer's certificate regarding year of manufacture cannot be accepted. However, he has not commented on the value of the identical new machines certified by the very same Chartered Engineers and has accepted the value as mentioned by the foreign Chartered Engineers.
7.1. We observe that in Appeal No. C/186/02, the total number of machines imported under four Bills of entries as submitted by the appellants were 308. Out of these, based on the inspection report given by M/s S.G.S. India Pvt. Ltd., date of manufacture of 36 old motors, one body cover one switchboard with main control panel, four switch boards and one packing press with motor and pump were found to have been manufactured much earlier than the year of manufacture of the machine as certified by the Foreign Chartered Engineers. The Commissioner has held that most of the motors were without identifiable and conditions of the same visually appeared to be of more wear and tear and some of the motors by taking the capacity into consideration were identifiable with the year of manufacture ranging from 1965 to 1993 but most of them belonged to 1980s. Few motors found to be less than ten years old were considered as having been replaced when the old motors got damaged or worn out. He has also rejected the statement given by M/s Chengde Jute and Fibre Textile (Group) Co. Ltd. where the goods were lying installed, to the effect that in order to meet the time schedule of loading and to provide complete parts/accessories, their factory provided as replacement the old stand-by electric motors from the readily available factory stock. No reason has been attributed by the Commissioner as to how the said certificate could not be accepted and the Commissioner has proceeded to confiscate all the goods covered by four Bills of entries but the value was not enhanced.
7.2 In Appeal No. C/192/02, according to the report of M/s S.G.S. India Pvt. Ltd., and which has been taken note of by the adjudicating authority, it was only in respect of 2 motors (made in England) and one body cover and one frame the age was found to be more than 10 years old. He has also taken into consideration the report of M/s S.G.S. India Pvt. Ltd., 'who has certified that though the goods were heavily used as wear and tear was more but the machinery would have minimum residual life of 10 years, provided the machines/equipments and their accessories were assembled, commissioned and maintained as per manufacturer's instructions. M/s S.G.S. also certified that the value declared by the importer appeared to be low by around 30 to 35%. Guided by the certificate issued by M/s S.G.S. India Pvt. Ltd., the Commissioner proceeded to enhance the value by 33.33% and ordered confiscation of all the goods covered under four Bills of Entry in this appeal with option to redeem the same and imposed penalty.
7.3 In Appeal No. C/207/02 according to the report of M/s S.G.S. India Pvt. Ltd., in respect of one electric switch board, 21 electrical Switch board with main control panel, and three AC contacts that the age was found to be more than 10 years. However, the Commissioner has proceeded to confiscate all the items covered by three Bills of entry in this appeal and levied fine and imposed penalty after enhancing the value by 25%. He has also taken note of the examination report of M/s S.G.S. India Pvt. Ltd. independent Chartered Engineers who examined the goods and certified that the machinery would have minimum residual life of 10 years and that the value declared by the importer appeared to be less by 10%. Commissioner has however chosen to reject of M/s G.S. India Pvt. Ltd. so far as it related to the value, by holding that machinery which are less than 10 years cannot be imported at such cheap rates.
7.4 In Appeal No. C/210/02 according to the report of M/s S.G.S. India Pvt. Ltd. metal strips of two electric motors, one Electrical switch board with main control panel, two electrical starters, main frames of ten looms and one Transformer unit fixed inside the electrical switch board with main control panel, it was found that the age was more than 10 years old but the Commissioner proceeded to confiscate all the goods involved in this appeal by levying fine and imposing penalty after enhancing the value by 25%. In this case also, the Commissioner has rejected the opinion given by the M/s S.G.S. India Pvt. Ltd. as regards valuation of the goods. He has held that the goods in question though ten years old with heavy wear and tear are certified to have a minimum residual life of ten years and considering the nature and condition of the goods, the value need to be added by 25%.
8. We observe that in all these appeals, the importers have produced Foreign Chartered Engineer's certificate showing the year of manufacture as 1993 (in the case of Appeal No. C/186/02 and C/207/02) and 1992 in the case of Appeal No. C/210/02) and 1994 (in the case of Appeal No. C/192/02). In all these cases, the Chartered Engineer's certificate have also certified that the machinery was operating satisfactorily and that the international standards have been followed in the inspection and that the tests were carried out on the machinery and the machinery was operating satisfactorily. We observe that the Commissioner while accepting the CIF value of the equivalent machine as certified by the foreign Chartered Engineer, has chosen to reject the transaction value declared by the appellants on allegation of mis-declaration. We have been taking a consistent view that a Chartered Engineers certificate cannot be accepted in part, that is accepting the portion which is advantageous to the department and rejecting the portion which is not advantageous to them. We observe that the Hon'ble Supreme Court in their judgment in the case of Eicher Tractors Ltd. v. CC, Mumbai, 2000 (72) ECC 673 (SC),: 2000 (222) ELT 321 (SO has clearly laid down the law in regard to the situations where the transaction value can be rejected. In the present case, it is not the case of the department that there was flow of consideration to the appellants or there was mutuality of interest between the sellers and the buyers so as to come within the ambit of the exceptions clause envisaged under Rule 4(2) of the CVR 1988. In the circumstances we do not find any material to support the view taken by the Commissioner that the value cannot be fixed under Rule 4 of the CVR and that it has to be fixed under Rule 8 thereto. Therefore, we are of the considered opinion that rejection of the foreign Chartered Engineers' certificate on allegation of mis-declaration of the value was not correct. We therefore, hold that there was no misdeclaration on the part of the appellants in regard to the transaction value declared by them. We have taken note of the fact that certain parts/accessories whose age was found to be more than 10 years old have been imported alongwith the main machinery, as found out during the joint inspection of the goods by M/s S.G.S. India Pvt. Ltd, the independent Chartered Engineers in India. The details of old parts accessories which were of more than 10 years old are set out in each appeal as noted above. The importers have also admitted that certain parts accessories as noted in each appeal have been imported alongwith main machinery. However, they have explained that those parts accessories were replaced from the old and stand-by machineries from the readily available stock. We do not find any material to reject the stand taken by the appellants in support of their plea in this regard. As noted above, the factual position that those parts/accessories were of more than 10 years old is not denied by the appellants themselves. Their plea is only that merely because certain parts/accessories were found to be more than 10 years old, the whole machineries cannot be confiscated. We observe that the nature of evidence taken into consideration by the lower authority for coming to a conclusion that the machineries imported are more than 10 years old, is that in most of the cases, the strips of switch board with control panel, main frames of looms, electrical motors, transformers, body cover of the machines indicated that their age was more than 10 years old. Therefore, in our considered view, confiscation of the whole machines merely because certain parts/accessories were found to be more than 10 years old mostly based on the year of manufacture as found in the strips, was not warranted. We note that the Hon'ble Supreme Court in the case of K.R. Steel Union Ltd. v. CC, 2001 (75) ECC 8 (SC) : 2001 (129) ELT 273 (SC) Court held that new parts constituting about 9% of the total value imported alongwith second-hand machinery of not more than 10 years old, and that too when such parts were necessary for working of the machinery, cannot be held to be in contravention of the import policy. In the present case before us, the appellants have imported certain old parts/accessories alongwith the machines necessary for the working of the machines on importation into India. In the facts and circumstances of the case, we are of the considered opinion that confiscation of the whole lot of machinery involved in these appeals which have been certified to be not more than 10 years old by the foreign Chartered Engineer, just because certain parts/accessories found in the main machinery was found to be more than ten years old, was not warranted and we set aside the order of confiscation, levy of fine and so also imposition of penalty. In this view of the matter, we set aside all the orders impugned and allow the appeal with consequential relief if any. The Cross objection filed by the department also stands disposed of accordingly.