1994 (6) TMI 57 - AT - Customs

Issues Involved:
1. Confiscation of medical equipment under Section 111(d) and 111(m) of the Customs Act.
2. Confiscation of accessories/spares under Section 111(d) and 111(l) of the Customs Act.
3. Confiscation of household articles under Section 111(d) and 111(l) of the Customs Act.
4. Confiscation of a fax machine under Section 111(l) of the Customs Act.
5. Rejection of the claim for Transfer of Residence (T.R.) Rules benefits.
6. Non-imposition of penalty under Section 112 of the Customs Act.
7. Allegations of undervaluation of medical equipment.
8. Eligibility for concessional rate of duty under Custom Notification No. 138/88.

Detailed Analysis:

1. Confiscation of Medical Equipment:
The Collector ordered the confiscation of three main medical equipment under Section 111(d) and 111(m) of the Customs Act, but allowed redemption on payment of a fine of Rs. 50,000. The issue arose because the medical equipment was older than declared, violating para 34(3) of the Import Policy 1990-93, which restricts the import of machinery older than 7 years. The Tribunal, however, noted that the Chartered Engineer's certificate indicated a residual life of more than 12 years, and the Chief Controller of Imports and Exports (CCI&E) had recommended clearance. Thus, the Tribunal concluded there was no violation of para 34(3) and set aside the confiscation order.

2. Confiscation of Accessories/Spares:
The Collector also ordered the confiscation of accessories/spares under Section 111(d) and 111(l), allowing redemption on payment of a fine of Rs. 50,000. The accessories were not covered under the specific import license. The Tribunal found that these accessories were integral to the main medical equipment, which was covered by the license. The invoice and clarificatory letter from the supplier supported this. The Tribunal held that there was no mis-declaration and set aside the confiscation order.

3. Confiscation of Household Articles:
Household articles were ordered for confiscation under Section 111(d) and 111(l), with an option for redemption on a fine of Rs. 10,000. The Collector rejected the claim for Transfer of Residence (T.R.) Rules benefits, stating the goods were not declared in the bill of entry. The Tribunal noted that under Section 44 of the Customs Act, there is no requirement to file a bill of entry for baggage, and oral declaration is permissible. Thus, the confiscation and fine for non-declaration were set aside. However, the denial of T.R. Rules benefits was upheld as the goods were shipped outside the stipulated timeframe.

4. Confiscation of Fax Machine:
The fax machine was ordered for confiscation under Section 111(l), with an option for redemption on a fine of Rs. 10,000. The Tribunal's analysis did not specifically address this issue separately from the household articles, implying the same reasoning applied.

5. Rejection of T.R. Rules Benefits:
The Collector rejected the T.R. Rules benefits, citing non-compliance with the conditions regarding the duration of stay abroad and the timing of shipment. The Tribunal upheld this decision, noting that the goods were shipped outside the required timeframe and the importer had not resided abroad for the requisite period immediately preceding the transfer.

6. Non-Imposition of Penalty:
The Collector did not impose any penalty under Section 112 of the Customs Act, and this decision was not contested in the Tribunal's judgment.

7. Allegations of Undervaluation:
The Collector dropped the charges of undervaluation for the CAT Scan, X-ray tube, and Oscilloscope, accepting the declared transaction values due to lack of contrary evidence. The Tribunal upheld this finding, noting that the Collector had accepted the explanation provided by the importer.

8. Eligibility for Concessional Rate of Duty:
The Collector denied the benefit of Custom Notification No. 138/88 due to the absence of a notarized affidavit from abroad. The Tribunal found this to be a procedural, not substantive, requirement and cited the Supreme Court's ruling in Mangalore Chemicals and Fertilizers Ltd. v. Dy. Commissioner, which allows for the condonation of procedural violations. The Tribunal concluded that the importer was entitled to the benefit of the notification, as there was no substantive violation.

Conclusion:
The appeal was allowed in part. The Tribunal set aside the confiscation orders for the medical equipment, accessories/spares, and household articles due to procedural compliance and lack of substantive violations. The denial of T.R. Rules benefits was upheld. The Tribunal emphasized the distinction between procedural and substantive conditions, aligning with the Supreme Court's jurisprudence.

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