Case Law Details
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 importer. Therefore, following the ratios of various decisions cited supra, I hold that the imposition of redemption fine to the extent of 10% of the value of the goods and penalty of 5% of the value of the goods is sufficient and I accordingly reduce the redemption fine and penalty to 10% and 5%. Accordingly, the appeals are disposed of in above terms.
Relevant Extract of the CESTAT Order is as follows:-
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 except second-hand capital goods are restricted and permitted clearance only on the strength of license and since the importers failed to produce a valid license, the said goods were confiscated under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the FT (D & R) Act, 1992. Options were given to the importers to redeem the goods on payment of fine and penalties. After following the due process, the Commissioner (A) has imposed the redemption fine and penalty. Aggrieved by the same, the appellants have filed these appeals challenging the imposition of high redemption fine and penalty.
4. Heard both the parties and perused the records.
5. The only issue in all these appeals is whether the imposition of redemption fine and penalty is on a higher side as alleged by the appellant or what should be the percentage of redemption fine and penalty to be imposed on the importer who imports photo copier in violation of the Foreign Trade Policy. The learned counsel for the appellant submitted that the impugned order imposing redemption fine of more than 10% of the value of the goods in few cases and imposition of penalty of more than 5% of the value of goods, is not sustainable in law and is contrary to the consistent decisions of various Benches of the Tribunal and the High Court. He further submitted that the importation of the second-hand photocopier was under dispute on the ground that the same are not importable freely and are restricted in terms of para 2.17 of the Foreign Trade Policy read with para 2.13 of the Handbook of Procedure (import of second-hand capital goods are allowed freely). Based on the provisions of Foreign Trade Policy and Handbook of Procedure, the Customs Authorities issued show-cause notices under Section 124 of the Customs Act based on clarification issued in the Circulars alleging that the second hand photocopier were restricted for import and requires a valid import license and in the absence of such license, the goods were liable to be confiscated under Section 111(d) of the said Act read with para 2.17 of the Foreign Trade Policy and that the importers were liable to penalty under Section 112 of the said Act. The learned counsel further submitted that the different benches of the Tribunal took different views in the matter and therefore the issue was referred to the Larger Bench to resolve the conflicting conclusions. 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 Honble High Court was overruled by the Honble Supreme Court as reported in Atul Commodities Pvt. Ltd. vs. CC, Cochin: 2009 (235) ELT 385 (SC) and the Honble 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 on wards the import of used photocopiers were under dispute as to whether the same are consumer goods or capital goods and can be freely imported or not; whether the restriction imposed under Circular have the legal binding etc., in which the Supreme Court in the case of Atul Commodities (supra) settled the dispute. He further submitted that in all the appeals, it is an admitted fact that the appellant imported the used photocopiers without a license as required under the Foreign Trade Policy read with Handbook of Procedure during the relevant period. He also submitted that there was a lot of confusion during the impugned period during which the imports were made in the present appeals, as to whether the used photocopier can be imported freely or not. He further submitted that keeping in view the history of the dispute, the various Benches of the Tribunal and the High Court reduced the quantum of redemption fine and penalty imposed. In support of his submission, he relied upon the decision in the case of Navpad Enterprises Vs. CC, Cochin : 2009 (235) ELT 376 (Tri.-Bang.), wherein the Tribunal has held as follows:
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