2012 (8) TMI 215 - AT - Customs

Valuation - import of old/used digital multifunction print and copying machines. - goods were not accompanied by the Chartered Engineer s certificate from the load port and hence the value has been re-determined by ascertaining the value from a local Chartered Engineer. The appellants have also, accepted the value determined by the customs authorities as per the assessment of the local Chartered Engineer - The valuation done by the adjudicating Commissioner is upheld. Penalty confiscation redemption fine - Import of Secondhand Multifunctional Photocopiers - import licensing restrictions - violation of the import restriction Held that - Repeated offences and that the respondents are repeatedly importing second-hand digital photocopiers without licences, undervaluing the same and in one case even the quantity was found to be mis-declared - fines and penalties imposed by the original authorities in these cases of repeated offences are not unreasonable - no justification for reducing the fine imposed

Issues Involved:
1. Whether the imported goods can be considered photocopiers and subject to import licensing restrictions.
2. Whether the fine and penalty imposed are excessive.
3. Whether the value determined by the customs authorities for the imported goods is proper or arbitrary.

Detailed Analysis:

1. Whether the imported goods can be considered photocopiers and subject to import licensing restrictions:
The appellants imported 201 units of old/used digital multifunction print and copying machines and argued that these machines are freely importable. They cited previous judgments, including the Bangalore Tribunal's decision in Shivam International and the Supreme Court's ruling in Xerox India Ltd., to support their claim. They also argued that the machines fall under Customs Tariff sub-heading 8443 31 00, which does not impose import restrictions on digital multifunction machines.

The Tribunal, however, noted that the DGFT Notification No. 31/2005 dated 19.10.2005 clearly states that the import of secondhand photocopier machines is restricted and requires a license. The Tribunal emphasized that this restriction applies to all kinds of photocopiers, including analog and digital, as well as multifunction machines whose primary function is photocopying. The Tribunal found that the appellants did not have the required license for importing secondhand photocopier machines, thus upholding the confiscation of the goods.

2. Whether the fine and penalty imposed are excessive:
The adjudicating Commissioner imposed a redemption fine of Rs.10,25,000/- and a penalty of Rs.13,70,000/- on the appellants, noting that they were habitual offenders with repeated violations. The Tribunal referenced previous cases, including Sagar Enterprises, to highlight that fines and penalties should act as a deterrent against repeated offenses.

The Tribunal found that the fine, which was 30% of the assessed value, was not excessive. However, considering the arguments and precedents, the Tribunal decided to reduce the penalty from Rs.13,70,000/- to Rs.6,85,000/-, which amounts to about 20% of the assessed value, deeming it sufficient to meet the ends of justice.

3. Whether the value determined by the customs authorities for the imported goods is proper or arbitrary:
The adjudicating Commissioner had enhanced the value of the goods from the declared USD 59,870 (C&F) to USD 69,395 (C&F), based on an assessment by a local Chartered Engineer, as the goods were not accompanied by a Chartered Engineer's certificate from the load port. The appellants had accepted this re-determined value.

The Tribunal upheld the valuation done by the adjudicating Commissioner, noting that the appellants had accepted the value determined by the customs authorities and did not provide substantial arguments against it.

Conclusion:
The Tribunal upheld the confiscation of the goods due to the lack of a required import license, as stipulated by DGFT Notification No. 31/2005. The fine imposed was deemed appropriate, but the penalty was reduced to Rs.6,85,000/-. The valuation of the goods by the customs authorities was also upheld.

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