2014 (1) TMI 971 - AT - Customs

Classification of goods - Violation of import policy - Mis declaration of goods - Year of manufacturing of goods - Held that - machineries in questions were not got examined by a Chartered Engineer either at the time of import or after seizing the goods based on doubt regarding age of the machines. The whole argument of Revenue is based on information which they unearthed in their enquiry to the effect thatserial numbers for machines manufactured by CERDANS had crossed 4000 in 1989 itself.However the source of this information is not disclosed in para 6 of the impugned order. It is stated only in very general terms in para 21 of the impugned order also.Based on such unauthenticated informationit is argued that all machines with serial numbers less than that should have been manufactured earlier. It is in this aspect that some sort of conjecture has been made by Revenue in support of the case. It is possible that the manufacturer was giving different series of numbers for different type of machines. The exact year of taking over of the company of CERDANS by VAMATAX also is not clear. So no value can be added by argument based on takeover of the manufacturing company by another company. In this case the benefit of doubt should go to the appellant. Therefore I hold that Revenue has failed to prove any mis-declaration and violation of the import policy - Decided in favour of assessee.

Summary

Issues:
Import of second-hand machinery with alleged misdeclaration of year of manufacture leading to confiscation and penalty under Customs Act, 1962.

Analysis:
1. The case involved the import of 15 second-hand Shuttleless Rapier Weaving Looms with a declared year of manufacture as 1994. Revenue suspected misdeclaration as the actual manufacture date was believed to be earlier, contravening import restrictions for old machines.

2. Detailed examination revealed nameplates indicating manufacturing dates earlier than 1989, contrary to the declared year. The machines' serial numbers were below 4000, suggesting pre-1989 manufacture. The takeover of the manufacturer by another company in the 1990s further cast doubt on the declared year of manufacture.

3. The Revenue issued a show cause notice under Customs Act, 1962, leading to confiscation of goods and imposition of penalties. The appellant argued lack of concrete evidence, highlighting discrepancies in the Chartered Engineer's assessment and the absence of information from the manufacturer or supplier. The appellant also mentioned having a valid license for 1989 machines, although the invoice stated 1994.

4. The appellant contended that the penalties were unwarranted, emphasizing no revenue loss due to undervaluation. They challenged the reliance on the Chartered Engineer's certificate and argued that the case was based on assumptions. The appellant sought the confiscation to be set aside.

5. The Revenue countered, alleging misdeclaration to expedite import due to licensing delays. They presented circumstantial evidence, including serial numbers from another importer, to support the misdeclaration claim. The General Manager's evasive responses further strengthened the Revenue's case.

6. Upon evaluation, the judge found the Revenue's evidence lacking, noting the absence of a Chartered Engineer's examination and reliance on unauthenticated information. The judge emphasized the inconclusive nature of the evidence regarding serial numbers and the company takeover, leading to the benefit of the doubt favoring the appellant.

7. The judge ruled in favor of the appellant, setting aside the confiscation and penalties, citing the lack of concrete proof of misdeclaration and import policy violation. The appeal was allowed, providing consequential relief to the appellant.

This detailed analysis of the judgment highlights the key legal issues, evidence presented, arguments made by both parties, and the judge's reasoning leading to the final decision in the case.