Custom, Excise & Service Tax Tribunal
M/S. Sri Sai Graphics vs Cc, Hyderabad-Ii on 20 January, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.C/2853/2012; C/2854/2012; C/1341/2011 (Arising out of Order-in-Appeal No.42/2012(H-II) Cus. Dt. 20/07/2012; No.47/2012(H-II) Cus. Dt. 20/07/2012 and No.07/2011(H-II) Cus. Dt. 18/03/2011 passed by CC,CE&ST(Appeals), Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member(Judicial) 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 their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Sri Sai Graphics M/s. Vishwakna Enterprises M/s. KATKE Digital Printers ..Appellant(s) Vs. CC, Hyderabad-II ..Respondent(s)
Appearance Shri Y. Sreenivasa Reddy, Advocate for the appellants.
Shri Venkatesan and Shri Prasad, Authorised representatives for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:28/12/2015 Date of decision:..
FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The issue involved in the above appeals is whether the goods imported are liable for confiscation as having been imported without license, in contravention of condition laid in para 2.17 of the Foreign Trade Policy. All the three appeals were heard together and are disposed by this common order as the issues for consideration are the same in all the three cases.
2. The appellants M/s Vishwakna Enterprises (Appeal No.C/2854/2012) filed Bill of Entry No.4482956 dated 27-08-2011 for clearance of 242 nos. of used Cannon make multifunctional copier cum printers. M/s Katka Digital Printers (Appeal No.C/1341/2011) filed Bill of Entry No.2529320 dated 04-01-2011 for clearance of used cannon MFD copiers. Similarly Sri Sai Graphics filed Bill of Entry No.4247842 dated 02-08-2011 for clearance of 113 nos. of second hand Cannon MFD(Digital Multifunctional devices)
3. The goods being second hand and the department not convinced by the declared value, the same were appraised by a Chartered Engineer. All the appellants accepted the enhanced value. However, the department also entertained a view that the goods being photocopier machines require a license for import as per the condition laid in para 2.17 of Foreign Trade Policy(FTP) and the appellants having imported the goods without license, the goods are liable for confiscation and would also attract imposition of penalty under Section 112( a) of the Customs Act, 1962. After adjudication, Order-in-Original was passed confiscating the goods with an option to redeem them on payment of redemption fine and also imposed penalty. Aggrieved by the said order, the appellants preferred appeal before the Commissioner (Appeals) who upheld the confiscation and imposition of penalty. The appellants have preferred the present appeals challenging the confiscation and imposition of penalty.
4. Before entering into the discussion, it would be worthwhile to notice the condition envisaged in para 2.17 of the FTP during the relevant period which is as under:
Second Hand Goods 2.17 All second hand goods, except second hand capital goods, shall be restricted for imports and may be imported only in accordance with provisions of FTP, ITC(HS), HBP v1, Public Notice or an Authorisation issued in this regard.
Import of second hand capital goods, including refurbished/re-conditioned spares shall be allowed freely. However, second hand personal computers/laptops, photocopier machines, air conditioners, diesel generating sets will only be allowed against a licence.
The said condition underwent an amendment wef from 05-06-2012 which reads as under.
Import policy Conditions, if any
1. Second Hand Capital Goods Group
(a) Restricted category
(i) Personal computers / laptops
(ii) Photocopier machines / Digital multifunction print & copying machines.
(iii) Air conditioners
(iv) Diesel generating sets Restricted Allowed to be imported only as per provisions of FTP, ITC(HS), HBP v1, Public Notice or an Authorisation issued for import of the specified second hand item.
5. It is seen that prior to 05-06-2012, the restriction was only with regard to photocopiers. After 05-06-2012, Digital multifunctional print and copying machines were also included in the restricted category. Thus prior to 05-06-2012 import of used photocopiers without a license was not permissible. The import of goods in all the three appeals is prior to 05-06-2012 as reflected from the respective bills of Entry.
6. It is the case of the department that the goods imported are second hand multifunction copier machines which are nothing but photocopiers with additional devices/functions. Therefore, used photocopiers being restricted, the import of impugned goods without license is contravention of condition 2.17 of FTP read with Section 13 & 11 of Foreign (Development & Regulation) Act, 1992. The learned AR Sri Venkatesan submitted that the goods though described as multifunctional copier cum printers are per se photocopiers. Further, that after amendment, used digital multifunctional print and copying machines are also restricted. The import of such goods without a license tantamount to violation of the condition laid in para 2.17 of FTP. That therefore the lower authorities have rightly confiscated the goods and imposed penalty.
7. The learned counsel for the appellant Sri Y. Sreenivasa Reddy submitted that prior to 05-06-2012, the restriction was applicable only to photocopiers. The goods imported by appellants are not mere/standalone photocopiers. They are multifunctional digital photocopying machines. Some models also function as printer, scanner, Xerox etc. with memory function in them. He drew attention to the classification of goods shown in the Bills of entry and contended that the goods imported by appellant are classified under CTH 84433100 while the classification of photocopiers is CTH 84433930. He relied upon the following judgments and pleaded that the confiscation is unjustified.
i) Shivam Internationals CC Cochin [2012(286) ELT 545(Tri-Bombay)]
ii) Sai Graphics Systems Vs CC (Seaport-import) Chennai [2013(289) ELT 423(Mad)]
iii) CCE, Delhi Vs Best Mega International [2013(293) ELT 243(Tri-Del)]
8. I have considered the rival submissions and perused the appeal papers. The classification of goods shown in the Bill of Entry is CTH 84433100 which is that of MFD machines. So also the description of goods shown in Bill of Entry is not photocopiers but it is stated as multifunctional Digital machines, copier, scanner (printer). The department had taken the assistance of a Chartered Engineer for examination of the goods and assessment of its value. Thereby the value declared by the appellants was rejected and order was passed enhancing the value basing upon the report/valuation of chartered Engineer. It is not stated anywhere by the expert/chartered engineer that the goods are mere photocopiers classifiable under CTH 84433930 or that the description or classification shown in the Bills of Entry are wrong. The Chartered Engineer has not reported that the goods do not conform to the description given in Bill of Entry. The department has assumed after enhancement of value that the goods are merely photocopiers and are restricted goods. Further the argument of the AR that MFD copiers are also included in restricted category is not acceptable as the amendment is after the import of goods. I find from records placed and evidence adduced that the goods are not photocopier machines as mentioned in para 2.17 of FTP.
9. The said issue has been considered and settled in the judgments placed before me by the learned counsel for appellants. In CCE Delhi Vs Best Mega International (Supra) the coordinate bench of the Tribunal observed as under:
6. The goods imported are old and used Digital Multifunction Printing and Copying Machines covered by sub-heading 8443 31 00. In terms of the Chartered Engineer Certificate, the remnant life of the machines is more than 5 years and the same are not e-waste fit to be discarded during the period of dispute, para 2.17 of the Foreign Trade Policy mentions the restricted category of second hand capital goods and the same mentioned only "photocopier machines" as one of the items which could not be imported in old and used condition without an import licence. The term "Digital Multifunction Printing and Copying Machines" was added in para 2.17 of the Foreign Trade Policy only w.e.f. 5-6-2012. The point of dispute is as to whether during period prior to 5-6-2012, which is the period of dispute in this case, old and used Digital Multifunction Printing and Copying Machines could be imported without licence or not.
6.1. We find that from the Minutes of the Technical Review Committee of Ministry of Environment and Forests held on 16-11-2011 which have been obtained by the respondent from the Ministry under Right to Information Act, it is clear that Government itself treated "Digital Multifunction Printing and Photocopying Machines" as different from Photocopying Machines and for this reason only, felt the need to mention the old and used Digital Multifunction Printing and Photocopying Machines in para 2.17 of the Foreign Trade Policy, as items restricted for import and accordingly w.e.f. 5-6-2012 para 2.17 of the Foreign Trade Policy was amended by adding old and used Digital Multifunction Printing and Photocopying Machines, in this para as the item restricted for import. It is, therefore, clear that during the period prior to 5-6-2012, the old and used Digital Multifunction Printing and Photocopying Machines could be imported without any licence. We find that same view has been taken by Co-ordinate Bench of the Tribunal in case of Shivam International (supra) and also by the Hon'ble Madras High Court in cases of Anand Impex (supra) and Sai Graphic System v. Com-missioner of Customs, Chennai reported in 2013 (289) ELT 0423 (Mad.). In view of this position and also keeping in view the fact that the Chartered Engineer Certificate has certified that the goods imported are not e-waste, we hold that goods, in question, were not restricted for import and as such no import licence was required for their import. Therefore there is no infirmity in the impugned order setting aside the confiscation of the goods under Section 111(d) of the Customs Act.
11. In view of the above discussion and following the proposition laid in the judgments cited supra, I hold that the confiscation of goods and consequent imposition of redemption fine and penalty is not sustainable. The impugned orders are modified to the extent of setting aside the confiscation of goods and imposition of redemption fine and penalty.
12. In the result, the appeals are allowed in above terms, with consequential reliefs, if any.
(Pronounced on .) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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