2007 (12) TMI 371 - AT - Customs

Summary

Issues: Classification of imported goods as capital goods under Exim Policy, imposition of redemption fine and penalty.

Analysis:
1. Classification of Imported Goods: The case involved the import of old and used rollers for use in rolling mills. The Appellant argued that the imported rollers should be considered capital goods based on the treatment of parts and components of capital goods under the Excise Law. The Consultant for the Appellant contended that there was no discrepancy in the declarations made, and the importers believed the goods were freely importable. While the Exim Policy did not categorize the goods as capital goods, the Customs Authorities had classified them under the Machinery Chapter. The Judge acknowledged that the rollers were used as parts of rolling mills for production and manufacturing of goods, leading to a lenient view despite the strict interpretation under the Exim Policy.

2. Imposition of Redemption Fine and Penalty: The Department argued for the imposition of a redemption fine of Rs. 6 lakhs and a penalty of Rs. 1.25 lakhs. However, the Judge found these amounts to be on the higher side, especially considering the value of the goods at Rs. 15 lakhs. In light of this, a reduction in the redemption fine to Rs. 1.5 lakhs and the penalty to Rs. 10,000 was deemed appropriate. The Judge partially allowed the appeal by reducing the redemption fine and penalty, taking into account the circumstances of the case and the value of the goods.

In conclusion, the judgment by the Appellate Tribunal CESTAT, Kolkata addressed the classification of imported goods as capital goods under the Exim Policy and the subsequent imposition of a redemption fine and penalty. The decision highlighted the importance of the intended use of the goods and the classification by Customs Authorities in determining the appropriate treatment. The reduction in the redemption fine and penalty reflected a balanced approach considering the value of the goods and the circumstances presented during the proceedings.