2007 (6) TMI 37 - AT - Customs

Confiscation and penalty - Alleged that appellant had misclassified the goods and misdeclared its description in BOE with intent to secure clearance of the goods with the benefit of Notification without WPC license - Held that allegation was correct and penalty sustained

Issues Involved:
1. Classification of imported telecommunication equipment.
2. Requirement and production of WPC (Wireless Planning & Coordination) license.
3. Fulfillment of conditions under Customs Notification No. 55/2003.
4. Confiscation of goods under Section 111(d) and (o) of the Customs Act.
5. Imposition of penalties under Section 112(a) of the Customs Act.

Issue-wise Detailed Analysis:

1. Classification of Imported Telecommunication Equipment:
The classification of the DSNG (Digital Satellite News Gathering) system was contested. The appellants initially classified it under CTH 8529 90 90, but the Department reclassified it under CTH 8525 20 92 as 'other satellite communication equipment'. The Tribunal upheld the Department's classification, noting that the appellants accepted the classification under EXIM Code 8525 20 92.

2. Requirement and Production of WPC License:
The EXIM Policy required a WPC license for importing satellite communication equipment. The appellants imported the DSNG system without this license, relying instead on a permission letter from the Ministry of Information & Broadcasting, which the Tribunal found insufficient. The Tribunal noted that the appellants applied for the WPC license only after the import and did not obtain it in time. The Tribunal also rejected the WPC license dated 25-5-2007 produced by the appellants as it did not cover the DSNG equipment imported in 2003.

3. Fulfillment of Conditions under Customs Notification No. 55/2003:
The appellants argued that they were not required to produce installation certificates after each import but only after the completion of all imports under the EPCG licenses. The Tribunal rejected this argument, stating that the import period under the EPCG licenses had expired, and no further imports were possible. The appellants failed to produce the installation certificate within the prescribed period, violating the conditions of the notification.

4. Confiscation of Goods under Section 111(d) and (o) of the Customs Act:
The Tribunal upheld the confiscation of the DSNG system under Section 111(d) for importing without a WPC license and under Section 111(o) for failing to produce the installation certificate. However, the Tribunal modified the order of absolute confiscation to allow redemption on payment of a fine of Rs. 19,00,000/- and the duty foregone. For the remaining goods, the Tribunal upheld the confiscation but reduced the redemption fine to Rs. 21,00,000/-.

5. Imposition of Penalties under Section 112(a) of the Customs Act:
The Tribunal found the penalty of Rs. 1.90 crores on the company excessive and reduced it to Rs. 25,00,000/-. The penalties on the Managing Director and other Directors were set aside as the Commissioner did not establish any separate commission or omission by them that rendered the goods liable for confiscation or abetment of the company's offense.

Conclusion:
The Tribunal affirmed the classification and confiscation of the DSNG system and other goods but allowed redemption on payment of fines and duties. The penalties on the company were reduced, and those on the Managing Director and other Directors were set aside.

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