2007 (5) TMI 612 - AT - Customs

Confiscation of goods - import of old/used photocopiers of various models without import licence - valuation - enhancement of value - penalty

Issues Involved:
1. Confiscation of imported secondhand photocopying machines without import licence.
2. Enhancement of the value of imported goods by Customs authorities.
3. Imposition of redemption fine and penalties on importers.
4. Adequacy of redemption fine and penalties imposed by the adjudicating authority.

Issue-wise Detailed Analysis:

1. Confiscation of Imported Secondhand Photocopying Machines Without Import Licence:

The party-appellants imported old/used photocopiers without the required import licence and filed Bills of Entry claiming clearance under OGL. These imports were made after the amendment of para 2.17 of the EXIM Policy 2004-2009, which required a specific licence for importing secondhand photocopiers. Consequently, the goods were liable for confiscation under Section 111(d) of the Customs Act read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. The Customs officers conducted a 100% examination of the goods and confirmed that they were used photocopiers. The Commissioner of Customs (Import) upheld the confiscation of the goods due to the lack of the required import licence.

2. Enhancement of the Value of Imported Goods by Customs Authorities:

The Customs authorities proposed an enhancement of the value of the goods based on the appraisal by local Chartered Engineers, which was higher than the declared value. The importers waived the show-cause notice but requested a hearing, during which they argued for the acceptance of the declared value certified by the load port Chartered Engineer. The Commissioner rejected the declared value and determined a higher value based on the local Chartered Engineer's appraisal under Rule 8 of the Customs Valuation Rules, 1988. The Tribunal found that the Commissioner rejected the declared value without valid reasons under Rule 4(2) of the Customs Valuation Rules, as established in the cited cases of Eicher Tractors Ltd. and Tolin Rubbers Pvt. Ltd. The Tribunal ordered that the declared value of the goods be accepted for the purpose of duty assessment.

3. Imposition of Redemption Fine and Penalties on Importers:

The Commissioner ordered the confiscation of goods with an option for redemption against payment of fine under Section 125 of the Customs Act and imposed penalties under Section 112(a) for rendering the goods liable for confiscation. The Tribunal noted that the value of the goods has a bearing on the quantum of redemption fine and penalty. Since the declared value was accepted, the fines and penalties needed adjustment. The Tribunal reduced the fines and penalties where they exceeded 15% and 5% of the declared value, respectively, and increased them where they were below these limits.

4. Adequacy of Redemption Fine and Penalties Imposed by the Adjudicating Authority:

The Revenue appealed for enhancement of fines and penalties, arguing that the amounts imposed were inadequate. The Tribunal considered the facts and circumstances and adjusted the fines and penalties accordingly. The Tribunal allowed the Revenue's appeals to the extent of increasing the fines and penalties on specific importers.

Conclusion:

The Tribunal upheld the confiscation of the goods due to the lack of the required import licence. It ordered the acceptance of the declared value of the goods for duty assessment, rejecting the enhancement based on local Chartered Engineer's appraisal. The Tribunal adjusted the redemption fines and penalties, reducing them where they exceeded the prescribed limits and increasing them where they were below these limits. The Tribunal allowed the appeals filed by the party-appellants to the extent of accepting the declared value and reducing fines and penalties, and allowed the Revenue's appeals to the extent of increasing fines and penalties on specific importers.

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