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TMI Blog2001 (5) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... ort Policy Part-I 1997-2002 (hereinafter referred to as the Policy ), with actual user condition during the period 1997-98 and 1998-99. It was mentioned in the show cause notice dated 30-7-1999 that Prashant Knitting Mills was a fictitious firm and that Shri Prashant Mohan had transferred the said imported second-hand knitting machines in violation of the provisions as contained in the above mentioned para-5.4 of the Policy. It was also noted in the said show cause notice that the machines had been imported for and on account of Shri Ramesh Savlani. In addition, Shri Ramesh Savlani had also imported some of the second-hand knitting machines and had installed them in his concerns. Some of the machines so imported by Shri Ramesh Savlani had also been disposed of to different parties on different terms and conditions. Charges were also framed against the buyers of the said machines on the ground that they had reason to believe that the same were liable for confiscation being disposed of in contravention of the provisions of the said Policy. Redemption fines were also imposed with regard to the various machines seized from different premises. The matter was adjudicated by the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere concerned, the ld. Advocate submitted that those machines had not been imported by Shri Ramesh Savlani, no bill of entry was filed by him. Even where Shri Ramesh Savlani had been charged with the transfer of machines, no import had been made by Shri Ramesh Savlani and no bill of entry had been filed by him. The imports were in the name of the various firms and no show cause notice had been issued to such importing firms. The importing firms were separate legal entities. The machines were freely importable by the actual users and the noticees were all actual users. Their disposal was also not prohibited and the only condition was that the prior permission of the DGFT was to be obtained. He submitted that at best it could be considered as a technical offence. Shri K.K. Anand, Advocate appearing for Shri Prashant Mohan, M/s. Prasnant Knitting Mills, M/s. Bharbhutta Weaving Factory, M/s. Pretty Nets Laces, Shri Iqbal Singh, Shri Subhash Malhotra, M/s. Gurpreet Knitters, M/s. Sachin Textiles and M/s. M.M. Knitters, adopted the agruments of Shri J.P. Kaushik, Advocate in so far as the jurisdiction of the customs authorities was concerned. He further submitted that the machines we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms at the time of clearance of goods - (i) a self-declaration to the effect that the second-hand capital goods being imported has minimum residual life of 5 years, and (ii) a declaration to the effect that he is an actual user in the form given in Appendix-9. In addition to the above, a certificate certifying the residual life of the capital goods and reasonability of the purchase price from any of the Inspection and Certification agencies including their branches as given in Appendix - 32A where the CIF value of the capital goods being imported was Rs. 1,00,00,000/- and above, was to be furnished. It was also provided in the said para-5.4 of the Handbook that the second hand capital goods shall not be transferred, sold or otherwise disposed of within a period of 5 years from the date of import except with the prior permission of the DGFT. 5. From the facts on record, it is seen that at the time of the imports of the second-hand knitting machines in question during 1996-99, the requisite declarations were filed with the Customs and other prescribed formalities had been complied with. No discrepancy was found at the time of import, and the goods were released ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much in existence. We find that Shri Prashant Mohan, Proprietor was available for inquiries and investigations. If an actual user, then Shri Prashant Mohan could import such second-hand knitting machines even in his own name. We do not find any evidence to establish that Shri Prashant Mohan was not an actual user for the import of these machines. Shri Prashant Mohan, Proprietor, M/s. Prashant Knitting Mills in his statement recorded under the provisions of the law submitted that his firm was very much in existence and there was documentary evidence to that effect. The machines had been imported and cleared after the requisite formalities by the Customs. The machines were either transferred to the actual users or were lying in other premises or had been given on job work. It was submitted that the only violation was that M/s. Prashant Knitting Mills had not sought permission from the DGFT before transferring the machines, which it was submitted was a technical violation not warranting any imposition of penalty. 10. With regard to noticee, Shri Ramesh Savlani, imports had been made in the name of Tirupati Enterprises, Ganga Fashions, Kishan Chand and Balaji Industries. Shri Rame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions were made through statutory channels. The show cause notice did not specify that these persons were aware that the machines purchased by them had been sold after their clearance for home consumption. The adjudicating authority had recorded that there was nothing to doubt the bona fide of the persons, who have purchased the goods in the normal course of business. He had held that such persons were neither aware nor had any reason to believe that the goods were liable to confiscation and were thus not liable to penal action under Section 112(b) of the Act. 12. The appellants have pleaded that no offence has been committed by them under any provisions of the Customs Act and that Policy requirements have also been met by them. It has been further pleaded that at best a technical infringement could be said to be have committed for not obtaining the prior permission of the DGFT. The noticees from where the machines were seized were also actual users. At the time of the imports, the requisite formalities have been fulfilled. In these circumstances, we feel inclined to agree with the submissions that the infringement in these cases was not of any of the provisions of the Customs Ac ..... 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