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TMI Blog2017 (12) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... disposal of the appeals since they were already part of the documents filed before the authorities below. Appeal dismissed - decided against appellant. - CUSTOMS APPEAL NO.47 OF 2007 - - - Dated:- 16-11-2017 - A.S. OKA A.K. MENON, JJ. Mr. Pradeep S. Jetly for the appellant. Mr. D. Shroff, Senior Advocate, a/w Vinay Ansurkar, Mahi Lalka i/b. Ashok Singh for the respondent. JUDGMENT (PER A.K. MENON. J.) 1. By this appeal under Section 130 of the Customs Act, 1962 the appellant Commissioner of Customs has called into question the order No.A/834-835/WZB/2006/C-1/CSTB and M/599/WZB/2006/C-I/CSTB dated 4th September, 2006 passed by Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by which the appeal of the Revenue came to be rejected. 2. The facts in brief leading up to the present case are as under : The respondents imported and attempted to clear 1669 Old and Used Diesel Car Engines and 272 Old and Used Car Bonnets apparently by allegedly misdeclaring them as Capital Goods for Stone Processing Plant, with a declared CIF value of ₹ 1,73,17,651/- and claimed benefit as a 100% Export Oriented Unit. Information gathered by the Customs In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the quantum of redemption fine and penalty imposed vide the impugned order dated 18th December, 1996. All three appeals filed by the revenue and one appeal filed by the respondents were decided on 5th August, 2002. The tribunal ordered enhancement of penalty to ₹ 1 crore and the quantum of redemption fine was retained. 5. The respondent being aggrieved by the order applied for recall since according to them, they were not given an opportunity of personal hearing and, therefore, the order was rendered vulnerable due to violation of principles of natural justice. The appeal was rejected. The respondents carried the matter to this Court in Writ Petition No.1514 of 2005. The Court set aside the order of the Tribunal and remanded the appeal to be heard afresh. On 18th July, 2005 the Tribunal decided the appeals. In effect the quantum of redemption fine was reduced to 30% of CIF value and personal penalty was reduced to 5% of CIF value. The revenue has challenged the said order in this appeal. 6. This appeal came to be admitted on 9th August, 2007 and the following substantial questions of law were framed : 1. Whether CESTAT was right in reducing the quantum of redemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce according to Mr. Jetly the value was higher. He submitted that the respondents have already deposited ₹ 1,05,35,000/- towards redemption fine and ₹ 5,00,000/- towards penalty but they were claiming refund of ₹ 88,79,905/-. Refund of ₹ 84,32,851/- was sanctioned and same was refunded. 9. However, the revenue issued a protective demand by way of showcause notice on 17th September, 2008 in respect of ₹ 84,32,853/-. Mr. Jetly submitted that the Tribunal had relied upon the additional documents submitted by the respondent for the first time before the Tribunal and such additional documents ought not to be entertained. The Tribunal was error in assuming notional value of the goods at ₹ 3.47 crores. However, the market survey held at the material time reveal that the price of ₹ 7.9 crores and the same was never questioned by the respondent. Mr. Jetly therefore submitted that appeal does not give rise to substantial any question of law. 10. In the course of submissions, we called upon Mr. Jetly to explain how the impugned order is bad in law. Mr. Jetly took us through the order of the Tribunal and pointed out that in the first place, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nite tiles sold under 100% export oriented scheme which was duly filed with the revenue authorities. The list clearly discloses that the respondent required 3627 units of small used diesel engines with the accessories of capacity of 1000 cc to 2500 cc for processing of granite and other products. He submitted that capacity of the required engines were between 1000 cc and 2500 cc which is exactly what was imported. He submitted that the imports were genuine and for bonafide use of respondents' clients. 14. Mr. Shroff pointed out that the entire case of the respondent is misconceived. The show cause notice according to Mr. Shroff was based on the mistaken impression that the claim for duty benefit was improper wherein in paragraph 22 of the show cause notice the Commissioner of Customs had relied upon answers to a questionnaire made by the Secretariat for Industrial Approval which had observed that car engines are not capital goods, used for manufacturing of granite slabs and used car engines are not covered under the capital goods list forwarded by the company. Mr. Shroff submitted that the document referred to above clearly sets out that 362 used small diesel engines would c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel at length. In the course of submission Mr. Shroff relied upon the judgement in Commissioner of Customs vs. Marmo Classic . This Court has found that in similar cases the Tribunal had reduced the redemption fine and penalty by taking into account the margin of profit and demurrage incurred by the importer in respect of consignment and observed that the question whether the reduction in redemption fine or penalty was justified was essentially question of fact and no question of law arises. He submitted that a decision in Marmo Classic (supra) was affirmed by the Supreme Court in the Commissioner of Customs vs. Stoneman Marbles Industries 2011 (264) ELT 3 (SC) and that the impugned order therein reducing redemption fine and penalty is similar to the case at hand. He submitted that in the present case the Tribunal had determined the margin of the profit and redemption fine came to be reduced while enhancing the penalty. He submitted the reduction in redemption fine and enhancement of penalty being essentially a finding of fact, no question of law arises out of the Tribunal's order. 19. We find that the first ground of Mr. Jetly that additional evidence was allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any market inquiry report and for this reason the Tribunal has declined to accept the local market value of its goods at ₹ 7.93 crores. 21. According to us the reasoning of the Tribunal cannot be faultedinasmuch as there was no factual verification of the market value. No attempt was made by the revenue to ascertain the local market value of the used engines and in absence of such attempt to obtain market value, the estimation of the local market value is suspect. Even on the penalty aspect, the tribunal accepted the respondent's contention that there is reasonable doubt regarding inclusion of second hand engine in the Secretariat of Industrial Approvals (SIA). Subsequently, the SIA had clarified, vide letter dated 6th November, 1996, that used diesel engines were neither capital goods for granite stones processing plant nor they have been approved by SIA and imports were found to have suffered loss. Accordingly, penalty was reduced to 5% of the CIF value. The CIF value cannot be called into question since the same has been recorded as ₹ 1,73,47,655/- in paragraph 8 of the impugned order. Thus, there is no occasion for calling into question the CIF value taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... murrage incurred by the importers on the goods. Whether reduction in redemption fine and penalty was justified or not is essentially a finding of fact and no material has been adduced by the revenue to establish that the order of tribunal was perverse. As observed earlier the decision of this Court in Marmo Classic (supra) was also considered by the Supreme Court in Stoneman (supra) [Stoneman Marble Industries was formerly known as Marmo Classic] holding that redemption fine and penalty would essentially be a question of fact. In that case, similar questions arose as to correctness of the tribunal's decision in reducing redemption fine and penalty was imposed. The Supreme Court affirmed the decision of the Bombay High Court in Marmo Classic (supra) agreeing with the findings that the aspects of redemption of fine were essentially findings of fact and a standard formula cannot be laid for redemption fine and penalty and hence no question of law arose. In the circumstances the appeals were dismissed. We have no hesitation in holding that the decisions in Marmo Classic (supra) and Stoneman (supra) squarely cover the questions raised in this appeal in favour of the respondent a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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