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TMI Blog2017 (5) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 - Final Order No. 20647 - 20663 / 2017 - Dated:- 8-5-2017 - Shri S. S. Garg, Judicial Member Shri B. Venugopal, Advocate Shri Mhd. Rahim, Advocate For the Appellant Shri Naveen Kushalappa, AR Shri N. Jagadish, AR For the Respondent ORDER Per S. S. Garg The appellants have filed these 17 appeals against the different impugned order passed by the Commissioner of Customs (A). Since in all the 17 appeals, the issue involved is identical and therefore all the 17 appeals are being disposed of by this common order. The details of the 17 appeals are produced in the tabular form. Sl. No. Appeal No. Appellant Assessable value (Rs.) Redemption Fine (Rs.) Penalty (Rs.) 1 C/526/2007 Sai International 1127938 280000 150000 2 C/527/2007 Sooraj Graphics 755916 190000 100000 3 C/528/2007 Sagar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 130000 17 C/656/2008 Impact System Inc 2312360 575000 300000 2. For the sake of convenience, the facts of appeal No. C/526/2007 are being taken. 3. The appellant filed bill of entry No.171946 dated 11.1.2006 for the clearance of various number of the used incomplete copier. As the invoice did not contain any details, the services of independent Chartered Engineer were obtained in the presence of the Dock officers at the CFS Petta. On examination, the goods were found to be Medium duty and Heavy duty assemblies. The age of the machines in the two consignments were somewhere between 8 10 years and not reconditioned. The importers vide various letters dated 8.12.2005 and 19.1.2006 had accepted the findings and value as appraised by the Chartered Engineer and requested for waiver of show-cause notice. They have stated that they have imported the goods under the impression that these are capital goods which are freely importable under the Foreign Trade Policy. Since as per para 2.17 of the EXIM Policy 2004-09 import of second-hand goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. Accordingly, the Larger Bench in the case of Atul Commodities (P) Ltd. vs. CC, Cochin reported in 2005 (184) ELT 135 decided the issue by holding that the second hand photocopier qualify as capital goods and are freely importable in terms of para 2.33 of the Handbook of Procedure. The Revenue challenged the Larger Bench decision before the High Court of Kerala and the High Court overruled the Larger Bench decision as reported in CCE vs. Atul Commodities : 2006 (202) ELT 392. Thereafter, the decision of the Hon ble High Court was overruled by the Hon ble Supreme Court as reported in Atul Commodities Pvt. Ltd. vs. CC, Cochin: 2009 (235) ELT 385 (SC) and the Hon ble Supreme Court upheld the view of the Larger Bench of the Tribunal that photocopier machines are capital goods. It was further held that any amendment to the Policy has to be done only through a Notification and not through policy circular and therefore, the import of photocopier machines stands restricted only on or after 19.10.2005, the date on which Notification No.31 issued restricting import of second hand photocopier. The learned counsel further submitted that from the year 2002 onwards the import of used photocop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances in each case, we fail to see how any question of law, much less any substantial question of law could arise. A quasi judicial authority in exercising a power of discretion has to do it in an objective manner and cannot do so in a mechanical way. But we find that no peculiar facts were pleaded or materials placed to show that the redemption fine imposed at 10% and penalty at 5% is on a lower side. True that in earlier cases as pointed out in the Tribunals order, redemption was at the rate of 10% and penalty at 5%. If the facts in this case cannot be differentiated, then for parity of reasons, necessarily, the Tribunal has to follow its precedence while imposing the redemption fine and penalty as otherwise, such decision can also be characterised as arbitrary and discriminatory. Coming to the facts of this case, the Tribunal found that the value as fixed by the Chartered Engineers certificate is an enhanced value from the one declared by the assessee. That duty was imposed reckoning the value as fixed by the Chartered Engineers certificate. Therefore, the redemption fine imposed being on such rate as fixed in the certificate issued by the Chartered Engineer, there was escalati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The learned standing counsel appearing on behalf of the appellant placed reliance on the decision in Jain Exports Pvt. Ltd. v. Union of India [1993 (66) E.L.T. 537 (S.C.)]. In that case, the Apex Court, while considering the quantum of redemption fine to be imposed, held that the quantum should depend on the totality of the facts and circumstances of each case and that bona fide action of assessee by itself cannot entitle him to claim full waiver of fine. It was also held that the Apex Court would not ordinarily go into the matter while exercising jurisdiction under Articles 32 and 136 of Constitution of India unless impugned order is shown to be thoroughly arbitrary or whimsical resulting in gross miscarriage of justice. 12. In State of U.P. and Others v. Sukhpal Singh Bal [(2005) 7 SCC 615] the Apex Court held that the penalty is intended to protect the public revenue. As per Section 125 of the Customs Act, what is prescribed is the maximum of the amount that could be fixed by way of redemption fine. Therefore what exactly should be the redemption fine to be imposed will necessarily depend upon the facts and circumstances of each case. 13. It is settled that power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de Policy and misdeclaration of the value is involved. In those cases, I find that the Tribunal has put a benchmark of imposition of redemption fine of 10% and penalty of 5% respectively on the value of the imported goods as arrived by the Chartered Engineer. I do not find any reason for deviating from such a benchmark which has been fixed by the Tribunal and also upheld by the Hon ble High Court of Bombay and P H. 8. In view of the above, the impugned orders as regards the fine and penalty are modified to the extent in all these cases, that the appellants are required to pay redemption fine of 10% and penalty of 5% of the value of goods as arrived by the adjudicating authority. 5.3 Further, in the case of Commissioner of Customs, Cochin vs. Dilip Ghelani: 2009 (248) ELT 888 (Tri.-LB), the Tribunal has held as follows: 9. On a very careful consideration of the issue, we find that in all identical or similar cases of import of second-hand photocopiers, this Tribunal taking into account, the facts and circumstances of the case, had fixed the fine-and penalty at 10% arid 5% of the value of the imported goods respectively. The Commissioner (Appeals) has only followed the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % respectively. In view of the ruling in Rex Printing Press v. CC, Kolkata - 2005 (184) E.L.T. 73 (Tri.-Bang.) and Sooraj Graphics (cited supra), the redemption fine and penalty in these cases is restricted to 10% and 5% respectively. In the result, the Transaction Value is accepted while restricting the RF and penalty to 10% and 5% respectively. The appeals are disposed of in the above terms. 5.5 Further, in the case of Omex International vs. Commissioner of Customs, New Delhi reported in 2015 (228) ELT 57 (Tri.-Del.), wherein the Tribunal held as follows: 14. As regards the violation of EXIM Policy, the learned advocate has drawn our attention to various decisions of the Tribunal, wherein the redemption fine and penalty was reduced to 10% and 5% of the value of the photocopier. We note that in the case of Navpad Enterprises v. CC, Cochin [2009 (235) E.L.T. 376 (Tri.-Bang.)], redemption fine and penalty was reduced to 10% and 5% after rejecting the contention of the learned Departmental Representative that the assessee in that case was repeatedly committing violation of the EXIM Policy. The Tribunal observed that inasmuch as in the earlier decisions the view has already be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, all the Coordinate Benches have taken a categorical view of imposition of redemption fine of 10% and penalty of 5% of the value of imported goods, we find no justification to take a different view. It may not be out of place to mention here that in some of the cases, the importers were repeatedly violating the EXIM policy provisions. Inspite of that, the Tribunal imposed redemption fine and penalty of 10% and 5% of the value only. Some of the Tribunals decision also stand upheld by the Hon ble High Courts. 15. In view of the above, we set aside the impugned order as regards the enhancement of the value. However the imported goods are confiscated with an option to the appellant to redeem the same on payment of redemption fine of 10% of the value of the goods and penalty of 5% of the value of goods is upheld. 5.6 Further, in the case of Larsen Tubro Ltd. vs. CST: 2013 (32) STR 410 (Tri.- Del.), the Hon ble Tribunal has observed as under: 2. We find that the said issue was the subject matter of the various decisions of the Tribunal for a long time. One such reference can be made to the Tribunal's decision in the case of Omex International vs. Commissioner of Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have consistently imposed 10% fine and 5% penalty. Learned counsel further submitted that while imposing redemption fine no market enquiry has been conducted to arrive at the margin of profit, which is an important requirement. Only in some of the Orders-in-Original it is merely observed that the margin of profit in respect of impugned machines is around 20% which again has no basis as no such market enquiry report has been provided to the appellant to counter the same. It is settled law that quantum of redemption fine always depend on determination of market price which is one of the prerequisite prescribed in the statute itself in terms of the decision of the Hon ble Supreme Court in the case of Commissioner of Customs, Mumbai vs. Mansi Impex reported in 2011 (217) ELT 631 (SC). 7. After considering the submissions of both the parties and the perusal of the various decisions, I am of the considered view that the issue of imposition of redemption fine and penalty has been settled and now various Benches of the Tribunal have consistently held that the redemption fine of 10% of the value of the goods and penalty of 5% of the value of the goods is sufficient punishment to the imp ..... 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