By TIOL News Service

CHENNAI, SEPT 12, 2014: THIS is a Revenue appeal.

The respondent imported old and used digital multifunction printing machines and filed bills of entry. The Revenue took the plea that as per the Trade Policy 2004-2009, import of photocopier machine was restricted and required import licence.The goods were subjected to verification by the customs authorities and according to the Revenue, the importers have admitted that they did not have any import licence and they requested for adjudication.

Orders-in-original were passed, in which value was enhanced based on the Chartered Engineer's Certificate, whose value was accepted by the importers and the goods were thereafter confiscated and were allowed redemption of the goods on payment of fine and penalty.

On appeal by the importers, the Commissioner (Appeals) reduced the quantum of fine and penalty. The order of confiscation had not been challenged.

Aggrieved by this order reducing the quantum of fine and penalty, the Revenue filed appeals before the CESTAT.

The Tribunal dismissed all the appeals holding that the Revenue has not made out any case for enhancement of fine and penalty.

So, the Revenue has filed Civil Miscellaneous Appeals before the Madras High Court.

The respondent was not represented. Perhaps, because, they had in similar situation come out with flying colours six years ago.

The primary ground raised by the Revenue reads -

"The Tribunal has gone beyond the scope of the Appeal by discussing the importability of the Multi Digital Printing and Copying Machines vis-à-vis import license, while the main appeal itself was for reduction of "Fine and Penalty" only."

The High Court observed that the Commissioner (Appeals) had reduced the fine and penalty based on the decision in Commr.of Customs, Tuticorin vs.Sai Copiers - 2008-TIOL-98-HC-MAD-CUS and the decision of the Tribunal in Kangra Overseas and Surya International - 2008-TIOL-2367-CESTAT-MAD and the plea of the Department in appeal was that the order of the Adjudicating Authority on fine and penalty should be restored on the ground that the restricted goods have been imported without any valid licence and that if the percentage of fine and penalty is reduced to 15% and 5%, it will encourage other importers to import restricted goods without licence, thus contravening the import policy.

Furthermore, the Tribunal had also relied upon the decision in Sai Copiers (supra) wherein percentage of fine and penalty was reduced to 15% & 5% and also the decision in Shivam International and M/s.SreeMaa Enterprises - 2011-TIOL-851-CESTAT-BANG, wherein, the Tribunal made a distinction between the photocopier and digital multifunctional print and copier machines and held that the Digital Multifunctional Print and Copier machines could not be termed as photocopiers so as to attract the bar of para 2.17 of the Foreign Trade Policy.

To the question raised by the Revenue that when the appeal itself was filed before the Tribunal only for enhancement of redemption fine and penalty, there was no need for the Tribunal to go into the merits of the case, the High Court observed that the Tribunal had relied upon the aforesaid decisions only to come to a prima facie conclusion that the case does not deserve enhancement of redemption fine and penalty. Inasmuch since there was no appeal filed by the importers against the order of confiscation, therefore, those findings are not relevant for the purpose of deciding the merits of the case, except to the extent that the Tribunal has decided the issue with regard to the enhancement of quantum of redemption fine and penalty. Moreover, with regard to calculation of margin of profit in the absence of market enquiry made by the department, the Tribunal came to the conclusion that the value had been fixed on the basis of the Chartered Engineer at the behest of the department and no fault could be attributed to the assessee and these factors are to be kept in view while fixing fine and penalty, the High Court added.

Holding that the Department had not made out a case for enhancement of fine and penalty, the Revenue appeals were dismissed.

In passing: Also see: 2008-TIOL-98-HC-MAD-CUS

(See 2014-TIOL-1561-HC-MAD-CUS)