Customs, Excise and Gold Tribunal - Mumbai
Sagar Auto Works And Ors. vs Commissioner Of Central Excise And ... on 9 October, 2003
Equivalent citations: 2004(163)ELT442(TRI-MUMBAI)
JUDGMENT S.S. Sekhon, Member (T)
1. These seven appeals are being decided by this common order. Even though appellants are different the issue is the same. The goods under import and the respondents are same.
2. The appellants had imported consignment of old and used diesel engines, which have been ordered to be confiscated and released after imposition of redemption fine and of loading values as follows :
Appeal No. Value determined Amount of Redemption fine Penalty C/520/98-Mum Rs. 11,33,378/-
Rs. 12,00,000/-
Rs. 1,00,0007- C/529/98 - Mum Rs. 8,89,049/-
Rs. 9,00,000/-
Rs. 1,00,0007- C/530/98-Mum Rs. 9,73,606/-under B/E No. 307, Rs. 9,52,9257-under B/E No. 308, Rs. 8,78,5167-under B/E No. 309 Rs. 9,10,000/-under B/E No. 307, Rs. 8,00,000/- under B/E No. 308, Rs. 7,50,000/- under B/E No. 309 Rs. 1,00,0007-under B/E No. 307, Rs. 80,000/-under B/E No. 308, Rs. 70,000/-under B/E No. 309.
C/763/99-Mum Total value to Rs. 10,31,232/-
Rs. 4,89,000/-under B/E No. 381728.04.1999, Rs. 5,42,000/-under B/E No. 382/28.04.1999.
Rs. 49,0007-under B/E No. 381/28.04.1999, Rs. 54,0007-under B/E No. 382/28.04.1999.
C/764/99 - Mum Rs. 5,13,153/-under B/E No. 507, Rs.
Rs. 5,13,000/-under B/E No. 507, Rs. , Rs. 51,000/-under B/E No. 507, Rs. 53,000/-
5,38,003/-under B/E No. 508, Rs. 5,72,544/-under B/E No. 509, Rs. 5,82,732/-under B/E No. 510, Rs. 6,22,493/-under B/E No. 511.
5,38,000/- under B/E No. 508, Rs. 5,72,000/- under B/E No. 509, Rs. 5,80,000/- under B/E No. 510, Rs. 6,22,000/- under B/E No. 511.
under B/E No. i 508, Rs. 57,000/-under B/E No. 509, Rs. 58,000/-under B/E No. 510, Rs. 62,000/-under B/E No. 511.
C/ 1088/98 - Mum Rs. 7,22,432/-under B/E No. 81, Rs. 5,58,592/-under B/E No 72, Rs 7,13,216/-under B/E No. 71.
Rs. 5,13,000/-under B/E No. 507, Rs. 5,38,000/- under B/E No. 508, Rs. 5,72,000/- under B/E No. 509, Rs. 5,80,OOOA under B/E No. 510, Rs. 6,22,000/- under B/E No. 511.
Rs. 60,000/-under B/E No. 81, Rs. 50,000/-under B/E No. 72, Rs. 60,000/-under B/E No. 71.
From the above chart, it is apparent that for these imports made, mere is no uniformity in the redemption fines and penalties, when compared as percentage of the values determined.
3. Heard both sides and considered the issue, it is found -
a) The loading of valuation is 'not pressed' by the learned Advocate. Appeal on that issue is rejected.
b) As regards redemption fine, it is found -
i) On Margin of Profit, the Custom Appraising Manual Vol. II, Second Edt. published in 1990 prescribes in Chapter 5, para 5 as -
"5. MARGIN OF PROFIT:
(a) Market enquiries - In terms of Section 125 of the C.A. 62 the adjudication officer may impose a redemption fine on the offending goods not exceeding the market price of the goods confiscated less the duty chargeable thereon. It is therefore, understood that while fixing fine in lieu of confiscation the adjudication officer are guide by the margin of profit on the goods indicated by the assessing officer. It is therefore, necessary that the assessing officer should ascertain the market value of the offending goods and keep a record thereof in the file for assistance of the adjudicating officer and future reference. No detailed enquiries may be necessary where the fine to be imposed is 100% of the value, as the market value is normally more than the CIF value of the goods plus duty. (Ministry's letter F. No. 3/35/64-Cus. VI dated 15.3.65). However Board's D.O. letter mentioned below may also be seen,
(b) Norms for fine and list of basic articles - The Board in its D.O. letter F. No. 8/62/68-Cus VII dates 12.3.70 has laid down the norms for imposition of redemption fine. In this respect the Board has made a distinction regarding "Basic Articles" in respect of which the ITC policy is not as restricted as in respect of "Other Articles". The norms of fine on the Basic articles and other articles are as follows :-
(1) Basic Articles not banned under the Policy-25% (2) Basic Articles banned to that category of licensees to which the importer belong-50% (3) Other Articles-50% for non-banned 100% for banned to that category of licenses to which the importer belong.
In all cases whether relating to base articles or others, the fine will not be less than the margin of profit.
List of Basic Articles :
(i) Non-interchangeable parts of machinery and equipment (except cinema equipment) designed for use in project, mining, factories, agriculture, laboratories, training institutes and hospitals ("Equipment" will include instruments, apparatus and appliances and also specialised vehicles like Dumper & Fork-lift trucks).
(ii) (a) Unfinished forms, casting and forging of non-interchangeable parts specified under (i) above and
(b) Specified alloys for the manufacture of non-interchangeable parts specified under (i) above.
(iii) Specialized raw materials and intermediates for use in mining and in the manufacture of metals and alloys, leather, rubber, mineral oils, drugs and medicines, insecticides, pesticides, etc. Board has also clarified that the fine should equal to the normal or the margin of profit whichever is higher. It is true that in some case the norm will be more than the margin of profit, but if a person has contravened any ITC restriction and there are not extenuating circumstances, there is no reason why only the margin of profit need be taken away. If however, there are extenuating circumstances the adjudicating officer will be at liberty to ignore the norm or for that matter, the margin of profit."
Therefore, it was imperative for the Commissioner to have determined the margin of profit by his own enquiries independent, before proceeding to decide that the goods under import need a redemption fine in excess of that stipulated in the Manual. He was also required to arrive at findings as to how and why the fine should be more than the 'norms' as prescribed by the Board and manual instructions. As also why the goods were not "basic articles". Merely that the goods under import do not qualify as capital goods and require, being and old used item need a specific licence cannot lead to a order which could be sustained.
(ii) The Exim Policy 1997-2002 stipulates "all secondhand goods shall be restricted for imports". Hence secondhand i.e. old and used goods are treated as 'Restricted' and not 'prohibited/banned' goods. The ITC(HS) classification categorising imports as free, restricted, cannalized, prohibited. Import, of the impugned goods as herein would be permissible, without a licence, as Capital Goods, to eligible class of importer, as held by this Tribunal in the case of Gripwell Forgings & Tools {2002 (103) ECR 67}, therefore as prescribed, in the Manual, for Basic goods, redemption fines could not go beyond 50%, if and when so required, special reasons are to be found to exist. No such special reasons are found by the adjudicator in the impugned order.
(iii) While upholding the liability to confiscation, it is found that the fine, in this case, as per norms, is required to be not more than 50%. It is therefore reduced to 45% of the c.i.f. value as determined, keeping in mind that subject goods even when old and used have been held to be Capital Goods machinery by this Tribunal.
c) Since redemption fine is being reduced to uniformly at 45% of c.i.f. (as determined), it is considered that penalty at 5% of same c.i.f. as determined would suffice in this case.
4. Appeals disposed off in above terms.
(Pronounced in Court)