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Issues involved: Determination of goods as 'capital goods' or 'consumer goods' for import clearance, imposition of fine and penalty under Customs Act.
In the present case, the Appellate Tribunal CESTAT, Chennai considered two applications in each appeal, one for waiver of pre-deposit and stay of recovery in respect of penalty, and the other for early disposal of the appeal. After hearing both sides, the Tribunal decided to finally dispose of the appeals by dispensing with pre-deposit and allowing the applications for early disposal of appeals. Upon examining the records, it was found that the appellants had imported second-hand photocopiers without an import license, claiming clearance for home consumption under OGL based on the premise that the goods were 'capital goods'. However, the adjudicating authority determined the machines to be 'consumer goods' and ordered confiscation under Section 111(d) and (m) of the Customs Act. The Commissioner imposed fines and penalties on the importers, considering the value of the goods and the nature of the offense. The appellants argued that they had imported the goods in good faith, believing they would be treated as 'capital goods' based on a judgment of the Andhra Pradesh High Court. However, the Revenue pointed out a contrary decision by the Kerala High Court and argued that the appellants could not claim a bona fide belief as the imports were made after the Kerala High Court's decision. The Tribunal considered the case law cited by both sides and observed that the plea of bona fide belief was not tenable as the trend regarding the classification of second-hand photocopying machines had changed with the Kerala High Court's decision. Therefore, the appellants could not benefit from previous judgments in determining the quanta of penalty. After evaluating all aspects of the case, the Tribunal decided to reduce the redemption fines imposed by the Commissioner to 15% of the respective values of the goods. Additionally, the penalties imposed on the appellants were reduced to better match the offense found against them. The impugned orders were sustained with these modifications, and the appeals were disposed of accordingly.
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