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TMI Blog1997 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... y one M/s. R. Cressy Sons Ltd., U.K. Bill of Entry No. 107131, dated 26-3-1993 was filed through Clearing Agent, M/s. Foreign Traders, Delhi at ICD, New Delhi for clearance under Open General Licence and CIF value was declared as UK 5500.00. This consignment was awaiting clearance from ICD Customs, New Delhi, as on 7-4-1993. 3. The importer company had imported and cleared through ICD, New Delhi, another shipment covered by Invoice No. 1212, dated 2-11-1992 B/E No. 106979, dated 15-3-1993 filed through above said CHA by declaring the goods as used Textiles Machinery which includes one Bobbin Winder (1987), two Punching Machines (1986), one Card Repeating Machine (1986), two Mending Machines (1990) and two Saurer IS-55 10 Yards Machines (1986), Embroidery Machines. These goods were cleared by ICD Customs after recovering customs duty amounting to Rs. 2,56,233/- on 20-3-1993. The value was declared as Swiss Francs 34,800,00 (CIF). 4. As per the Import Policy 1992-97 Chapter V para 25 read with para 28, second-hand capital goods may be imported without a licence in garment/ Hosiery/made-ups sector and such second-hand machines shall not be more than 7 years old and shall have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 111(m) of the Customs Act, 1962, read with Clause 3 of Import (Control) Order, 1955, Section 3 of Imports and Exports Act, 1947 read with Section 4 of Foreign Trade (Regulation and Development) Act, 1992 as amended; (c) had in relation to the import of subject embroidery machines, imported vide B/E No. 106979, dated 15-3-1993 done or omitted to do acts, which acts or omissions had rendered the subject goods as per annexure, liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962 and thereby have become liable to penal action under the provisions of Section 112 of the Customs Act, 1962. 8. They were called upon to explain as to why : (a) The subject goods valued at Rs. 6,47,338.00 imported vide B/E No. 106979, dated 15-3-1993 imported and cleared under B/E No. 106979, dated 15-3-1993 should not be confiscated under Section 111(d) of the Customs Act read with Clause 3 of the Import (Control) Order, 1955, Section 3 of Imports and Exports Act, 1947 read with Section 4 of Foreign Trade (Regulation Development) Act, 1992; (b) The subject goods imported vide B/E No. 106979 dated 15-3-1993 covered by Bill of Entry No. 106979, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 or was a non existent Model; that their machine was IS 55 as confirmed by Mr. Dubey; that the value was 5,500 CIF and that correct invoice was the one dated 15-12-1992 which was submitted along with the packing list signed by Mrs. C.D. Cressy, C.S.; that the DRI has not proved that C.D. Cressy was not the C.S. of M/s. R. Cressy and Sons; that in fact invoice dated 31-3-1993 forwarded by H.M. Customs was the genuine invoice. (x) that the DRI had pressurised them to furnish Bank guarantee for few crores of Rupees to get the machine released on provisional basis on the wrong belief that the machines was as costly as 1,00,000 while now H.M. Customs has verified the actual price as 5,500 only, that his statement dated 27-9-1993 was under threat and pressure. (xi) that Sh. Dubey has stated that imported machine was Model IS 55. (xii) that Mrs. Vedi is not yet a Director in this Co. but only a proposed Director pending approval of RBI. (xiii) that N.V. Schiffli is a non existent Model; that regarding freight charges statement of Sh. N.K. Sharma recorded by H.M. Customs has not been placed on record; that regarding Chartered Engineers certified statement of Sh. Bajaj has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c allegation about the age of the machine is based on letter No. 1200/IMB/PS/AN/645, dated 8-5-1993 from M/s. Eastern Engineering Co., Bombay through Vikram S. Uppal, Director of M/s. Hindustan Embroidery Mills Pvt. Ltd., Delhi, M/s. Eastern Engineering Co., Bombay claimed that they are the agents of M/s. Saurer Embroidery System, Switzerland and M/s. Hindustan Embroidery Mills Pvt. Ltd. is obviously one of their customers. The whole allegation is, therefore, based on not a direct evidence by M/s. Saurer Embroidery System, Switzerland but a letter written by M/s. Eastern Engineering Co., Bombay who claimed that M/s. Saurer Embroidery System, Switzerland are their principals. He has observed that this type of allegation suffers from an inherent weakness, i.e. the complaint has been generated out of trade rivalry. However, whatever be the worth of such an allegation, it needs to be decided. He has proceeded to observe that M/s. Eastern Engineering Co., Bombay claimed that production of Model IS 55 embroidery machine was stopped by M/s. Saurer Embroidery System, Switzerland in the year 1945. It is, therefore, claimed that this model is not under production for more than 40 years. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also held that there is no evidence of under-invoice in the case. He has concluded that M/s. Volga Embroidery was not aware of that whether value of the machine imported by them was CIF or FOB. Therefore, he has held that there was no deliberate attempt on their part to suppress the value particularly when they had declared the value of the machine correctly. 12. As regards the point of the Embroidery machine being less than 7 years old, he has held that there is overwhelming evidence that these machines are definitely more than 7 years old. He has noted that Shri R.L. Dubey during the course of his cross-examination has stated that these machines are re-conditioned machines. However, they looked new and give an impression that they are new. It would, therefore, appear that the Chartered Engineers Certificate is not correct, even though the age of the machine cannot be judged very correctly by anyone. He has stated that as per his knowledge IS 55 machines had been imported into India during 1992-93. There is no manufacture of IS 55 other than Saurer. He had also stated that when he had inspected the machine at the time of import, he had found that it looked in quite good conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of order of the manufacture inscribed on the machine. He submits that there is no mens rea on the part of the appellants to evade duty and in view of the findings arrived at, the imposition of penalty is not justified. In this regard, he relied on the judgment rendered in the case of Akbar Badruddin Jiwani v. Collector of Customs, as reported in 1990 (47) E.L.T. 161 and that of Sir Shadi Lal Sugar and General Mills Ltd. v. Commissioner of Income-Tax as reported in 1987 (31) E.L.T. 325. He also relied on the following judgments : 1. Extrusion v. Collector of Customs [1990 (26) E.L.T. 52] 2. Mogul Line Ltd. Others v. I. J. Dutta and Another [1990 (26) ECR 100] 3. Merck Spares, Delhi v. Collector of Central Excise Customs [1983 (13) E.L.T. 1261] 4. Collector of Customs v. Seth Enterprises Pvt. Ltd. [1990 (49) E.L.T. 612] 5. Tata Engineering Locomotive Company Ltd. v. Collector of Customs [1991 (56) E.L.T. 812] 6. Tsubo Shilpa Exports v. Collector of Customs [1990 (46) E.L.T. 402] 7. Satya Prakash Agnihotri v. Collector of Customs, [1990 (40) E.L.T. 614] 15. He also relied on the following judgments to show that in the absence of any mens rea, no con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance and that the Chartered Engineers Certificate is not correct. In view of his own finding that the age of the machine cannot be ascertained and also there is no deliberate attempt on the part of the importer to suppress the value or misdeclare and in view of the entire evidence and the conduct of the appellants, the age of the machine being less than 7 years old could have been accepted. This finding is arrived at by me on the basis of the Commissioner s own finding with regard to the varying evidence on the age of the machine. The department has not brought any evidence with regard to the age of the machine being more than 7 years old and in the facts and circumstances of the case, it was but proper to have given the benefit of doubt to the appellants. The Counsel has relied on several judgments noted above, wherein it has been laid down that the confiscation, penalty cannot be imposed in the absence of mens rea. The Counsel has also relied on the judgment that in the absence of any mens rea no confiscation can be ordered and fine be imposed. 19. Taking into consideration, the judgments cited above and the law laid down by the Hon ble Supreme Court, it is but proper to gra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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