2002 (9) TMI 167 - AT - Customs

Confiscation - EXIM - Clearance of imported goods - Redemption fine - Imposition of - Penalty

Summary

Issues Involved:
- Violation of actual user condition by selling imported second-hand machines.
- Liability of the sold machines for confiscation.
- Confiscation of machines under seizure.
- Imposition of penalties on the noticees.

Detailed Analysis:

1. Violation of Actual User Condition:
The Chief Commissioner found that 23 companies were floated by R. Janardhanan, who controlled the import and sale of 460 second-hand printing machines. The firms were merely name lenders, and 389 machines were sold in the local market, violating the actual user condition under para 5.4 of the EXIM policy. The importers had declared adherence to the actual user condition but sold the machines, constituting a grave violation of the import policy. The Chief Commissioner concluded that the noticees contravened the actual user condition, making the goods unauthorized and liable for confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962.

2. Liability of Sold Machines for Confiscation:
The Chief Commissioner held that the 389 sold machines were liable for confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962, despite their physical unavailability. The sale of goods in the market constituted an offense, leading to the imposition of a redemption fine of Rs. 25 lakhs on R. Janardhanan, as per the Supreme Court's judgment in M/s. Western Components v. Commissioner.

3. Confiscation of Machines Under Seizure:
The Chief Commissioner noted that the 71 seized machines were not at the premises of the importers and were intended for sale, evidenced by their storage in different locations. This led to the conclusion that the machines were meant for sale, not installation, violating the import policy. Consequently, these machines were ordered for confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962, with an option for redemption on payment of a fine of Rs. 3 lakhs.

4. Imposition of Penalties:
The Chief Commissioner imposed a penalty of Rs. 10 lakhs on R. Janardhanan under Section 112(a) of the Customs Act, 1962, for his central role in the import and sale scheme. Additionally, a penalty of Rs. 5000/- each was imposed on 20 persons for their involvement. The Chief Commissioner justified the penalties based on the seriousness of the offense and the clear intention to profit by violating the actual user conditions of the EXIM policy.

Conclusion:
The appeal by R. Janardhanan was rejected, affirming the confiscation orders, redemption fines, and penalties imposed by the Chief Commissioner. The judgment emphasized the adherence to the actual user condition and the consequences of violating import policy provisions.