TMI Blog1999 (2) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... redemption fine of Rs 1 lakh each in respect of goods covered by these three Bills of entries. Penalty of Rs 1 lakh has been imposed on M/s Indo European Machinery Co (P) Ltd who are not before us in appeal. No penalty has been imposed on the present appellants. 2. Heard Shri R. Sasidharan, learned Counsel for the appellants and Shri S. Kannan, learned DR. 3. The learned Counsel submits that the items involved are Web Offset Printing Machine manufactured by M/s Solna Printing Machinery AB, Sweden and imported by the appellants. In the Bills of entry filed the appellants have claimed Customs duty exemption in terms of Notification 114/80, dated 19-6-1980. The learned Counsel submits that the appellants entered into a contract with the foreign suppliers for one of such machine in 1986 and sent their Chartered Engineer to inspect the output of the said machine as they would be claiming the exemption under the said Notification which would apply only to machine having output of 30,000 copies or more per hour. After inspection the Chartered Engineer submitted a report dated 15-9-1980 certifying that the output was more than 36,000 copies per hour. This report was dated 27-9-1986, B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was that the machine was at the speed of 39,000 copies per hour. The learned Counsel submitted that this report was submitted before the original authority for consideration. (d) Since these machines have been inspected, trial runs conducted by two independent agencies i.e. IIT, Madras and the Chartered Engineer and since both have come to the conclusion that the machines were capable of printing more than 36,000 copies per hour, therefore, the conditions of the Notification have been clearly met by the appellants. (e) The learned Counsel submitted that as against these expert opinions submitted by them to the Customs authorities, these authorities have not brought to the notice of the appellants any technical opinion of any qualified expert to the contrary including the DGTD. Therefore, the appellants had discharged the burden cast on them while claiming the exemption in the said Notification and burden if any now lies squarely on the Revenue to disprove it effectively these two technical opinions of experts of high repute. Since the Revenue had not shown any evidence given by similar technical experts or they did not choose to demolish the value of these technical opinions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... series only which have been imported to India needed a very close scrutiny. (b) For this close scrutiny the Customs authorities consulted local office of the DGTD who are the highest technical experts available in India. It is on record that this expert of DGTD was also associated in the personal hearing given to the appellants. The DGTD consistently maintained that they require details of atleast the modification done on the machines by the manufacturers before they could further consider its output if necessary even conducting trial runs as is clearly borne out in the order impugned. The learned Collector could not supply these technical details of modification to the DGTD as the appellants had submitted their inability to obtain the same from the foreign manufacturers. This position was brought to the notice of the appellants even during personal hearing. Therefore, while on the one hand the Customs had given due notice to the appellants on this issue, on the other hand since the appellants could not produce details of at least the major modifications carried out on these series, therefore, they had not discharged the burden attendant upon them when they claimed duty exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 minutes and the third one for five minutes and that it represented the highest speed at which the machine was capable of operating. In 15 minutes first run generated 9704 copies and the third run 9750 copies. In 10 minutes second run 6500 copies were generated. From these the Engineer had worked out pro-rata per hour calculation and had concluded that the machines can produce 39,000 copies per hour. However, nowhere was it demonstrated that the machine was actually run for one hour and what was the actual production of copies which were the output by the machine and secondly, the said certificate clearly gives the reason as to why the machines were not run in any of the trial runs of duration beyond 15 minutes, when it records that the machine can run without reel change only for 18/19 minutes at maximum speed at a time, depending upon reel diameters. Therefore, it is clear that none of the machines can be run at a maximum speed for a period of over 18 to 19 minutes. Even at intermediate speed they cannot be run for a period exceeding 30 minutes at the most. Hence these machines clearly did not have output of anything even approximately 30,000 copies per hour of running in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1 of the said table which reads as under :- Web fed High Speed letter press Rotary and Web fed offset Rotary printing machines having output of 30,000 or more copies per hour. The only point of dispute is whether the three machines imported had an output of 30,000 or more copies per hour or not. The dispute further arose because the manufacturers general catalogue for sales worldwide, these series of machines as described thereunder were having a maximum output of 25,000 copies per hour. As against this, appellants claim that the foreign manufacturer had modified the machine imported by them and that because of upgradation of the electric motor drives, the machine could run at higher RPM and thereby had achieved an output of more than 30,000 copies per hour . To substantiate this claim, they have submitted three evidences :- (a) The manufacturer s special catalogue for these machines (b) The technical opinion of their consulting Engineer Shri Doshi . (c) The technical opinion of Professors of IIT Madras; all of which have been already recorded above. 8. Since the basic dispute arose out of an interpretation of the said notification, we have considered the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants had been informed about the necessity for providing this information, yet same could not be provided on the ground that foreign manufacturer could not reveal their trade secret. When the basic machine had already been catalogued, we find it difficult to swallow the excuse that any secret modifications were involved which could not be disclosed as it would hurt their interest. This is not the case where there was some patent or proprietary formula as in sophisticated drugs etc. which was involved. We cannot also find fault with the view of the DGTD expert that normally by merely upgrading the electric motor drive, the machine could not have an increased output. Therefore, we are of the clear opinion that by not supplying the information, the importers/appellants had not discharged the burden cast on them when they were claiming the said exemption. (b) We have perused the technical opinion of M/s . I.I.T, Madras. No doubt, it is extensive, but the major consideration given by the Professors of the Department of Electrical Engineering of I.I.T., Madras is to the capability of the upgraded electric motor to handle higher RPM operations without undue wear tear. The only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... folds :- (i) the machine, even if reel of full capacity is loaded thereon, when it is operated at an upgraded maximum RPM of 30000 RPM , the paper in the said reel gets exhausted within 18 minutes or so and therefore in one batch run the output being only about 10,000 copies. This means that the machine is not capable of an output of 30000 copies in an hour without changing the reels from time to time . (ii) Since it would take some appreciable time, which has not been measured or recorded by any technical authority on behalf of the appellants, to change and reloaded a fresh reel and to caliberate and set the machine for printing , therefore the output per hour in actuality has not been determined or certified to be 30,000 copies or more with respect to this machine by this certificate. 10. In this connection, this Bench had also given an opportunity to ld. Advocate during the course of hearing in Court to produce their own internal records to substantiate their claim that machines had in fact given an output of 30000 copies or more per hour. However, ld. Advocate submits that no such records are now available, the period being quite old. It is our considered view that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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