1999 (3) TMI 204 - AT - Customs

Summary

Issues Involved:
1. Confiscation of Fax machines.
2. Imposition of redemption fine.
3. Liability to pay customs duty.

Detailed Analysis:

1. Confiscation of Fax Machines:

The appeal was filed against the order of the Collector of Customs (Judicial), Mumbai, which directed the confiscation of 51 Fax machines with an option to redeem them on payment of a redemption fine. The appellants, a leading courier company, had purchased a Canon Fax machine from M/s. Micro Documentation Center Company (MDCC) and paid by cheque. The Department alleged that the Fax machines were smuggled and issued a Show Cause Notice (SCN) to the appellants, among others, to explain why the machines should not be confiscated and penalties imposed.

The appellants argued they were bona fide purchasers and had no knowledge that the machines were smuggled. They contended that since they bought the goods from an Indian firm and paid by cheque, they should not be penalized. However, the adjudicating authority rejected their claim and ordered the confiscation of the Fax machines, imposing a redemption fine and customs duty if the appellants chose to exercise the option to redeem.

2. Imposition of Redemption Fine:

The appellants argued that the Collector's findings indicated they were bona fide buyers and could not have known the machines were smuggled. They cited various legal precedents to support their claim that no fine should be imposed on them due to their bona fide conduct. The Department countered that Fax machines were restricted items during the relevant period and provided evidence from various statements indicating that the machines were smuggled.

The Tribunal considered the submissions and evidence, noting that the burden of proving the goods were smuggled lay with the Department. The evidence showed that the machines were of foreign origin and not imported bona fide, making them liable to confiscation. The Tribunal held that the option to pay a redemption fine in lieu of confiscation was based on equity and fairness, not penal in nature. The fine was not considered a penalty but a legal consequence of the confiscation.

3. Liability to Pay Customs Duty:

The appellants contended that as they were not the importers of the goods, they should not be liable to pay customs duty. They argued that import duty is payable by the importer, and they became owners only after the goods had been imported into India. The Department maintained that the goods were unlawfully imported and thus liable to confiscation and associated duties.

The Tribunal upheld the duty demand, stating that under Section 125(2) of the Customs Act, the duty demand against the appellants was legally sustainable. The Tribunal concluded that the redemption fine and duty demand were justified and rejected the appeal.

Conclusion:

The Tribunal sustained the impugned order, holding that the confiscation of the Fax machines, the imposition of the redemption fine, and the duty demand were legally justified. The appeal was rejected, affirming the Collector's decision.