1997 (4) TMI 254 - AT - Customs

Summary

Issues:
Import of second-hand machines under Open General License (OGL) policy, manipulation of year of manufacture, confiscation of imported goods, imposition of penalty under Section 112, validity of Chartered Engineer's certificate, fulfillment of OGL conditions, evidence of year of manufacture, applicability of import policy restrictions based on machine age.

Analysis:
The judgment by the Appellate Tribunal CEGAT in New Delhi involved two appeals concerning the import of second-hand machines under the Open General License (OGL) policy. The case arose from information received by the DRI Zonal office regarding the manipulation of year of manufacture by a supplier in Italy to facilitate import under OGL. The department suspected that the machines were older than claimed, violating the OGL conditions. Statements of partners and agents were recorded, revealing that the machines were reconditioned old ones from the 1960s, not meeting the OGL age requirements.

During the investigation, show cause notices were issued proposing confiscation of the imported machines and penalties under Section 112. The Adjudicating authority held some machines liable for confiscation and imposed penalties on the importers. The appellants argued that the Chartered Engineer's certificate confirmed compliance with OGL conditions and that the age restriction was no longer applicable under later import policies. However, detailed reports from the Italian Chamber of Commerce showed discrepancies in the year of manufacture, leading to partial confiscation.

The Tribunal agreed with the department that some machines were over 7 years old based on the evidence. It found that only specific machines imported by each appellant exceeded the age limit, warranting confiscation. The judgment upheld the confiscation of certain machines while setting aside confiscation for others. The redemption fine was reduced, and penalties were revoked due to the department's failure to prove the appellants' knowledge of the machines' confiscation liability. The decision emphasized the adherence to OGL conditions in force during the import period, rejecting the argument based on later import policies.

In conclusion, the Tribunal partially upheld the confiscation, reduced the redemption fine, and set aside the penalties, disposing of the appeals accordingly. The judgment clarified the importance of fulfilling OGL conditions and the consequences of non-compliance with import policy restrictions based on machine age.