2001 (12) TMI 154 - AT - Customs

Summary

Issues Involved:
1. Violation of EXIM policy by importing second-hand machinery without proper licenses.
2. Misuse of Actual User Condition.
3. Confiscation and imposition of penalties.
4. Jurisdiction issues.
5. Validity of retracted statements.
6. Application of Supreme Court judgments.
7. Imposition of redemption fines and penalties.
8. Uniformity in imposition of fines and penalties.

Issue-wise Detailed Analysis:

1. Violation of EXIM Policy by Importing Second-Hand Machinery Without Proper Licenses:
The appellants imported second-hand machinery against the EXIM policy, which required an import license. They declared compliance with the Actual User Condition, stating that the machinery would be installed at their factory premises. However, investigations revealed that the machinery was stored in various godowns and not installed as declared, violating the EXIM policy.

2. Misuse of Actual User Condition:
Investigations found that the proprietor had floated multiple firms in relatives' names to import machinery under the Actual User Condition. The relatives admitted to lending their names without any involvement in the business. The machinery was imported with the intention to sell in the local market, violating the declarations filed.

3. Confiscation and Imposition of Penalties:
The Commissioner ordered the confiscation of 74 machines and imposed a fine of Rs. 25 lakhs under Section 125 of the Customs Act. Penalties were also imposed on various individuals. The appellants argued that the actual user condition was met and that the initial statements were retracted. However, the Tribunal found sufficient evidence of violation and upheld the confiscation and penalties.

4. Jurisdiction Issues:
It was argued that the Commissioner of Customs, Trichy, had no jurisdiction over some of the imported machines. The Tribunal noted this argument but focused on the overall violation of the EXIM policy and the declarations made.

5. Validity of Retracted Statements:
The appellants contended that the initial statements were given under coercion and later retracted. However, the Tribunal found that the burden of proof was on the appellants to show they had the means and intention to set up the units as actual users, which they failed to do. The retracted statements were not accepted.

6. Application of Supreme Court Judgments:
The Tribunal referred to several Supreme Court judgments, including Jain Exports Pvt. Ltd. v. UOI, Westen Components Ltd. v. CC, New Delhi, and others, which held that goods found to be confiscable must have redemption fines imposed, even if the goods are not available. The Tribunal emphasized that these judgments are binding and must be followed.

7. Imposition of Redemption Fines and Penalties:
The Tribunal found that the Commissioner had not specified to whom the option of redemption should be given, making the order infirm. The case was remanded for de novo consideration to correctly name the person for redemption and to impose appropriate fines and penalties in line with Supreme Court judgments.

8. Uniformity in Imposition of Fines and Penalties:
The appellants argued for uniformity in fines and penalties, citing a Chief Commissioner's order in a similar case. The Tribunal acknowledged the need for uniformity but emphasized that each case must be adjudicated based on its specific facts and applicable legal precedents.

Conclusion:
The Tribunal set aside the impugned orders and remanded the cases for de novo consideration, directing the Commissioner to re-adjudicate the matters on fines and penalties after granting an opportunity for a hearing to the appellants. The judgments and legal principles cited must be considered in the re-adjudication process.