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TMI Blog2001 (12) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ond-hand capital goods being imported has a minimum residual life of five years (ii) declaration to the effect that he is the actual user. 3. Appellants filed declarations as prescribed in the Handbook of Procedures to the effect that the said imports were made under Actual User Condition of the imported second-hand printing machine would be installed at their factory premises. They also declared that this would abide by the relevant provisions of the EXIM policy. 4. However, on investigation in the set of appeals, arising from Order-in-Original No. 55/2000 (Commr.) issued on 29-8-2000, the said Intelligence Officers attached to DRI on visit to the premises of M/s. DJR Arts and its godown at various places in Chennai on 29-6-1999 found that the imported second-hand printing machines had been kept in different godowns. It was found that D. Joseph, proprietor of DRJ Arts had floated, in the name of his relatives, 11 firms and had made all other proprietors of the firm to file Bill of Entry and give undertakings and cleared the goods on the pretext of the actual user. However, on in vestigation and recording of statements of all the persons which re vealed that relatives of D. Jos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary, merely based on the initial statements given under coercion and later retracted, appellant D. Joseph alone cannot be regarded to be as "importer" in respect of goods related to his firms. He submitted that in respect of 74 machines, which were held to be confiscated, the same have not been sold and are still in the possession of the importer and therefore in that circumstances, there is no violation and the said goods could not have been ordered to be confiscated and directed to be released on payment of fine. It was also argued that out of 74 printing machines, only 58 machines had been imported through Tuticorin and balance 16 had been imported through Chennai port and therefore the Commissioner of Customs, Trichy had no jurisdiction to initiate proceedings against 16 numbers. It was also pointed out that the Commissioner had not specifically given the option to any individual to redeem the goods but mere stated that he gives op tion to the party to redeem the goods. Therefore, the order is bad in law as there was no specific mention to the person who is required to redeem the goods. He contends that on that count alone the order is required to be set aside. It was also ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Apex Court disagreed with this view and took a view that it was not possible to agree with Tribunal's view that the Commissioner has travelled beyond the record and culled out fresh facts or fresh evidence in support of his conclusion. The above cited case, the Hon'ble Apex Court further held that the Collector restricted himself to the examination of the facts apparent from the record and drew the inferences and conclusions of his own on an appreciation of the material on record and in the light of the extent procedures. (Emphasis supplied by us). The Apex Court further held that the Commissioner did not launch upon an investigation of the facts which can be said to be extraneous to the record placed before him and therefore set aside the basic assumption and view taken by the Tribunal as incorrect and justified the Collector' s action in taking a view despite revenue not having raised a question in their refund application under Section 129D(2). As this judgment directly applies to the point raised by the Counsel in this case that revenue has not filed any appeal and the Tribunal cannot direct on remand for fixing redemption fine. He also pointed out that the ld. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson to whom it has to be released, therefore the order on this count is set aside and the Commis sioner is required to readjudicate with regard to 74 nos. of machines which have been seized and Redemption Fine has been imposed. Further, we notice that the Commissioner has ordered that 354 nos. of second-hand printing machines are liable for confiscation under Section 111(o) of the Customs Act but has not ordered for confiscation as the goods are not available. In this connection, it was brought to our notice by ld. SDR and DR that once the goods are found to be confiscable, the Commissioner has no choice but to order for confiscation and impose penalty as held by the Apex Court in the case of Jain Exports Ltd. v. UOI, 1993 (66) E.L.T. 537 (S.C.), in paras 6 to 13 as noted herein below :- 6. Since the question regarding the legality and the validity of the im ports has been finally concluded by this Court in the appeal arising from the deci sion of the Delhi High Court, the only point which remains for our consider ation is whether the importers had acted bona fide, in that, they had in good faith assumed that the non-edible variety of coconut oil was not a canalised item and cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Chief Marketing Manager of STC by his letter dated 30th October, 1980. 8. Besides, counsel urged, when M/s. Jain Shudh Vanaspati Ltd., a sister concern, imported industrial coconut oil under the 1980-81 policy, the Collector of Customs by his order dated 17th December, 1980 held the import illegal and imposed a redemption fine of Rs. 25 lakhs. This view was reversed by the Board by its order dated 23rd January, 1981 which view was confirmed by the Government of India by its order dated 31st March, 1981. Subsequently, in May-June, 1981 clearances were permitted both by the Bombay and Kandla offices of the customs department and hence the im porters had every reason to believe that the non-edible variety could be im ported under the OGL. The Collector of Customs, Ahmedabad, was bound by this view but he chose to ignore the same which was not proper. Reliance was also placed on certain imports made subsequent to the imports in question under the 1980-81 policy which were cleared vide Bill of Entry of January, 1983 of M/s. Jayant Oil Mills and Allana Impex Pvt. Ltd. Lastly, attention was invited to a letter dated July 12, 1985 of the DGTD to M/s. General Foods Pvt. Ltd., Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved therefrom. The Tribunal has noted : "However, the appellants, despite the direction from the Delhi High Court to produce relevant details for determining the quantum of redemption fine have not given any details regarding the landed costs and other expenses including the sale price on high sea sale basis for arriving at the appropriate quantum of profit." Even during the course of the hearing before us we repeatedly inquired of counsel for the importers to show us from the record whether or not the transactions in question had yielded any profit and, if yes, the quantum thereof but we did not receive a satisfactory reply. In fact as pointed out by the Tribunal the importers had failed to place the said material on record for reasons not difficult to guess. Therefore, even after two opportunities, the first given by the Delhi High Court and the second by this Court by the order under review, the importers have deliberately failed to place this vital infor mation on record. Counsel for the importers requested us to give him time to procure and place the said material on record but we saw no reason to grant further indulgence and permit the importers to do so belatedly when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, vide paragraph 48 of the judgment. The Collector has pointed out that while revalidating the additional licence dated 4th Novem ber, 1980 it was specifically stipulated that during the period of revalidation items which do not appear in Appendix 5 and 7 of the 1982-83 import policy shall not be imported and since the commodity in question did not figure in either of the appendix it could not be imported under OGL. The importers who are well versed would have realised that in view of this position the state ment in the letter of the STC cannot carry any weight. In this background if the Tribunal felt the letter of the STC was being used as a cover to put forth the plea that the imports were made bona fide, it cannot be said that the in ference raised by the Tribunal was unwarranted. In the circumstances it is difficult to believe that the importers were not alive to this changed situation which necessitated import of both varieties of coconut oil through the STC. The letter of the DGTD was issued in 1985 much after the import in September, 1982 and hence it could not have influenced the importers in importing the two consignments and, therefore, can be of no avail in determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake any difference. We feel that taking cover under the earlier orders passed in the case of M/s. Jain Shudh Vanaspati Ltd., and the letter of the STC, the importers have tried to create the impression that they were innocent victims of the subsequent interpretation put on the relevant entry, ignoring the fact that the licences were revalidated on certain terms and conditions which did not permit import except through the STC. We are, therefore, satisfied that the import under OGL was not a bona fide act. We, therefore, dismiss both the appeals as well as the writ petition with costs. Hearing cost quantified at Rs. 10,000/-. 8. On a reading of the above judgment, it is very clear that once the goods are held to be confiscable, then the redemption fine has to be imposed notwithstanding the plea of bona fide belief held by the importer or having acted in goods faith. Therefore, this finding of the Apex Court binds the authorities and Courts through out the country and it is binding law in terms of Article 141 of the Constitution of India. The Commissioner has committed an error which is patent on record and the Tribunal in terms of Section 128B of the Customs Act and pass orders to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secution's proceedings and imposed a sentence and fine. 9. In view of this Apex Court judgment cited (supra) and also that rendered in the case of CC v. Ballarpur Industries Ltd., (supra) the order of the Commissioner holding that the goods are not available and penalty cannot be imposed, is against the law as laid down therein. Therefore, the order is required to be set aside and remanded back to the original authority to re-adjudicate on these seized machines and pass a correct and appropriate orders including fine and penalties afresh after granting an opportunity to the appellants. (B) Appeal No. C/7/2000 : 10. This appeal arises from Order-in-Original No. 68/99, dated 8-10-1999 by which the Commissioner has noted that the imported one number used Planeta offset printing press with tower coater, under each bill of entry totally declaring the value at CIF of Rs. 13,11,000/- was imported against the restriction placed in para 5.3 of EXIM policy 1997-2002 as amended upto 1st April, 1999 as per which said goods required import licence. Appellant importer had imported against the specific provisions of the EXIM policy and hence such import was considered to be liable for confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other cited cases (supra) that once a violation of the condition of the Import Export Policy has been noted, then redemption fine has to be imposed. Therefore, the matter is remitted back for reconsidering the quantum of fine and penalty. In view of the plea that the goods have been sold to the actual user, this has to be verified by the original authority after granting opportunity of hearing to appellants and re-decided in terms of judgments noted in the above noted appeals. (C) Appeal Nos. C/390 to 395/2000 : 14. In all these appeals, the Commissioner has clearly noted that Shri A. Gunasekaran, proprietor of M/s. Safire Litho Graphers had floated eight other firms with the sole purpose of importing second-hand printing machines and other allied machineries and that same were sold in the market by violating the EXIM policy. The Commissioner after due consideration has directed that 103 second-hand printing machinery found in different godowns could be released to the importers by taking undertaking from them that they shall not sell the same. While, he has directed that 91 machines which are already sold to be confiscated and in lieu, a fine of Rs. 56 lakhs should be paid a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of release of 103 second-hand printing machinery to the party is not correct as each individual importer had admitted that the goods were not owned by them and it was in the name of A. Gunasekaran. In view of this ld. DRs submitted that the order itself being not correct requires to be set aside and remanded back to the Commissioner for proper adjudication in the light of Supreme Court and Tribunal judgments cited by them. 17. On a careful consideration of the submissions and on examination of the matter, we notice that the importers in this case have clearly admitted that they had no interest in the import of these machines except that they had given their names to A. Gunasekaran who was the person who had imported and dealt with the machines. In view of this submission, the order of release of 103 second-hand machines to individual importers does not appear to be a correct order as the said persons have not claimed release in their individual names. Therefore, the matter has to go back to the Commissioner as submitted by ld. SDR/DR for de novo consideration on 103 second-hand machines directed to be released to the individual importers. In so far as the confiscation of 91 machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d penalty as submitted by them in the light of judgments cited (supra). 21. On a careful consideration of the submissions, we agree with ld. SDR/DR that the matter is required to be remanded for de novo consideration in the light of the findings already recorded supra. We have given a clear finding that in the light of judgments noted, once the goods have been found to have violated the policy and undertaking, even they are liable for confiscation and if they are not available or sold, the fine is required to be imposed in terms of Supreme Court judgment rendered in Westen Components Ltd. (supra) and the Tribunal judgment rendered in Mangala Textiles (supra). Therefore, taking into consideration all the findings already recorded, the impugned order is set aside and matter remanded for de novo consideration to the Commissioner with the direction to readjudicate the matter on fine and penalty after taking into consideration the judgments cited and the submissions that would be made by the appellants in the personal hearing that should be granted by the ld. Commissioner. 22. In conclusion, it has to be noted that even the Apex Court in the case of Hargovind Das K. Joshi v. CC - 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1982 by opening the Letter of Credit knowing fully well that during the period of import, even the actual users have to approach the canalising agency for their requirement and by importing this canalised item, they could make considerable profit by way of sale. The Tribunal therefore unable to appreciate the plea of the advocate that there was good faith about the lawful nature of the import and the good faith was provided by the letter from S.T.C did not agree for non-imposition of re demption fine. 24. In the case of P.C. Joshi v. CC, New Delhi - 1987 (28) E.L.T. 450 (T) = 1987 (12) ECR 667 at pp. 67-71, it has been held that the power to give option to the importer to get release of the prohibited goods upon payment of fine is a power coupled with duty and in any event, it should be exercised fairly and reasonably and not arbitrarily and capriciously. 25. In the case of Dynamics - 1992 (58) E.L.T. 553 (S.C.) at page 555, the Apex Court observed that imposition of a quantum of fine is purely in exercise and discretion by a quasi-judicial authority like the Tribunal and such discretion should be exercised judiciously keeping in mind the profit margin of the goods. Depending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go than to permit the petitioner-bank who is the owner of the goods and in whose favour the bills has been endorsed, to redeem the goods, when the order of the first respondent dated 6th August, 1980, gives the importer (the fourth respondent) an option under Section 125, it could only mean the "owner" because, as is seen above, Section 125 uses only the word "owner". Therefore, it has to be observed that when an adjudication takes places either under Section 111 or under Section 124, the adjudication is in relation to the goods. This must be clearly borne in mind. The object of the Customs Act generally is to see that there is no illegal importation of goods. The various policies under the Import Trade Control are enunciated with reference to the economic conditions of the country and one cannot claim an inviolable right with regard to importation. An item which is freely importable today may be subject to restrictions tomorrow or even altogether banned. In other word the import of a particular goods may be licit today but become illicit tomorrow. Thus, the power of the Authorities under the Act is to determine whether a particular import is licit or illicit. The Section 112 impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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