2000 (9) TMI 659 - AT - Customs

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Notification No. 118/80-Cus.
2. Eligibility to import goods under Open General Licence (OGL).
3. Misdeclaration of spare parts and size parts.
4. Classification of 7 items of machinery as accessories.
5. Imposition of penalties and redemption fines.

Issue-Wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Notification No. 118/80-Cus:
The Collector accepted the importer's contention that the plant and machinery, except for 7 items, were eligible for a concessional rate of duty under Notification No. 118/80-Cus. This was based on a certificate from the Department of Electronics, which treated the importer's AC Capacitor plant as an electronic industry. The Department of Electronics confirmed that the firm held an Industrial Licence for manufacturing plastic film capacitors, which are considered electronic capacitors, even though many find applications in electrical industries as well.

2. Eligibility to Import Goods under OGL:
The Collector found that the imported goods were eligible to be imported under OGL. The Department of Electronics' certification was accepted for both the concessional rate of duty and the import under OGL. The Tribunal upheld this finding, agreeing that the project for which the machines were imported was an electronic industry, thus importable under OGL.

3. Misdeclaration of Spare Parts and Size Parts:
The Collector found a positive misdeclaration regarding spare parts and size parts valued at Rs. 20,63,178/- CIF, which were declared as "Printing Machinery with accessories." These were confiscated under Section 111(m) of the Customs Act, with an option to redeem on payment of a fine of Rs. 50,000/-. The Tribunal upheld the Collector's findings, noting the absence of rebuttal from the importers and justifying the redemption fine.

4. Classification of 7 Items of Machinery as Accessories:
The Collector held that the 7 items of machinery were not standard accessories, as they were not integrated with the main machines and were charged separately. The Tribunal agreed with the Collector's detailed findings, noting that the items were independent machines or equipment, not standard accessories. The redemption fine of Rs. 1.50 lakhs was upheld as reasonable.

5. Imposition of Penalties and Redemption Fines:
The Collector imposed penalties on the Importer Company and its officials, which were upheld by the Tribunal. The penalties were deemed reasonable, considering the positive misdeclaration and the classification of the 7 items as non-accessories. The Tribunal also upheld the redemption fines, finding them justified and within permissible limits as per the Import Policy for 1983-84.

Conclusion:
All four appeals filed by the Importer Company and its officials were rejected, and the appeal filed by the Revenue was also rejected. The impugned Order was upheld in its entirety, confirming the eligibility for concessional duty, import under OGL, findings of misdeclaration, classification of machinery, and the imposition of penalties and fines.