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Issues: Import of second-hand diesel engines by traders not actual users, contravention of Import Trade Control Regulations, confiscation of goods, redemption on payment of fine, imposition of penalty.
In this case, the appellants imported a consignment of second-hand diesel engines from Singapore and declared the value in the Bill of Entry. The issue arose as the importers were traders and not actual users, contravening the Exim Policy 1997-2002 which allowed import of second-hand capital goods only for actual users. The goods imported were not capital goods and were not covered by any public notice or valid import license, leading to confiscation by the Commissioner of Customs. The Commissioner allowed redemption of the goods on payment of a fine and imposed a penalty on the appellants. Upon hearing the case, the Tribunal found that the goods were not capital goods and were not covered by any public notice or valid import license. Even if the goods were capital goods, clearance could only be allowed for actual users, which the appellants were not. The Tribunal upheld the confiscation but modified the fine and penalty amounts. The fine in lieu of confiscation was reduced to Rs. 15 lakhs from Rs. 25,76,000/-, and the penalty was reduced to Rs. 1 lakh from Rs. 2,50,000/-. The order of enhancement based on contemporaneous import of identical goods cleared from the same station was deemed correct. Ultimately, the Tribunal partly allowed the appeal by modifying the fine and penalty amounts, reducing them from the original figures. The impugned order was upheld with the modifications made by the Tribunal.
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