TMI Blog2014 (6) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... their defence. Whether the counter given by Shri Dhar is sustainable and whether there is any other corroborative evidence sustaining the expert panel’s observations - Held that:- goods were never been in use in Belgium and the goods were refurbished before it was sent to the appellant-importer. If the goods were refurbished, the question of excessive wear and tear would not arise nor there could not be any rust due to exposure to open atmospheric condition. Further the foreign supplier himself says he is not sure whether some of the parts used for refurbishing is older or younger than 10 years. When the goods were refurbished and he is unsure to the age of the machine, how can the importer-appellant be sure of its age. Similarly, when old parts are refurbished, it is reasonable to presume that the parts used in refurbishing would be contemporaneous to refurbishing. If the year of the manufacture of crane is 1995 as claimed by the appellant and refurbished before shipping in 2003, the parts used for refurbishing would be of the later years. Denial of duty exemption contained in Notification No. 55/2003-Cus., dated 1-4-2003 - Mis declaration of goods - Held that:- order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Commissioner of Customs (Exports), JNCH, Nhava Sheva. 2. The appellant M/s. Patel Engineering Ltd. filed a Bill of Entry No. 946414, dated 7-1-2004 for clearance of two Tower Cranes under EPCG licence No. 0330004685, dated 11-11-2003 claiming benefit of Notification No. 55/2003-Cus., dated 1-4-2003. As per the declaration, the Tower Cranes were shown as of 1995 make and of German Origin, whereas the Port of loading was declared as Belgium and as per the licence, the appellant was permitted to import two second hand Liebherr Tower Cranes, Model No. 290 HC make-1995. The importer had also submitted a Chartered Engineer s certificate issued by one Shri D.M. Pradhan of Mumbai and as per the said certificate, the date of inspection was 1-1-2004 and both the cranes have been subjected to regular maintenance and they were furbished with new moving parts and there was no major repair work done and both were in good condition. Examination of the goods done on 15-1-2004 by the Shed Appraiser in presence of SIIB officers and the Assistant Commissioner revealed that out of 16 containers containing the goods, only two containers were grounded and the said two containers contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined that one machine was of 1988 make, while the other was of 1992 make, with parts ranging from 1987 to 1992, that is, various parts like jib and mast were of different years of manufacturing ranging from 1987 to 1992 based on different coded plates found on these structures. 2.3 Shri B.K. Chakraborty, Vice-President of M/s. Patel Engineering Ltd., was summoned and his statements recorded on 10-2-2004 and 11-2-2004. Shri Chakraborty, in his statement, admitted that they had imported the machine for undertaking the Parvati Project for which they got the contract in October, 2002. In April, 2003, the Director of M/s. Liebherr Export AG, Mr. Reim approached him to sell the tower cranes and the deals were finalized in September and the cranes were dispatched from Germany in December. When questioned as to why they did not obtain a Chartered Engineer s certificate from the supplier/Germany, he stated that both the appellant and the supplier had missed the requirement of producing Chartered Engineer s certificate from the supplier. When questioned about the certificate given by Shri D.M. Pradhan, who had issued the certificate without inspection, he stated that his CHA whom they had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t AG of India Office were recorded on different dates and he was asked about the coded markings such as 11/87, 1/90, 1/92 and he stated that first two numbers were numbers of welding procedure and latter digits were the drawing numbers for the welding procedure. When he questioned about the change of name plates, he stated that this was done to change the machines from DIN (German) Standard to FEM (International) Standard. When questioned as to why he did not issue a Chartered Engineer s certificate for the cranes, he stated that they did not have any such Engineer. But, when confronted with the Chartered Engineer s certificate issued by his company in the case of M/s. Jai Prakash Industries, he stated that his company called these certificates as Manufacturer s certificate. 2.6 In view of the doubt about the year of manufacture of the goods under importation, the department formed an Expert Panel consisting of 4 Appraising Officers including a Machinery Expert, the Dy. Commissioner of Customs, Docks, Plant Manager of Larsen Toubro, Independent Engineer, Assistant Foreman of Larsen Toubro, Shri Rakesh Handa, the CHA and Shri R.R. Dhar, appellant company s representative. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh, Asstt. Chief Engineer of M/s. Patel Engineering Ltd., and Shri B.K. Chakraborty, Vice-President of M/s. Patel Engineering Ltd. under Section 112(a) of the Customs Act. The case was adjudicated by the impugned order. The goods were confiscated under Sections 111(d) (m) of the Customs Act, 1962 with an option to redeem the same on payment of fine of Rs. 40 lakhs. The benefit of Notification No. 55/2003-Cus. was denied and the goods were ordered to be assessed on merits and differential duty was demanded uinder Section 28 along with interest thereon under Section 28AB. A personal penalty of Rs. 10 lakhs each was imposed on the appellant-firm M/s. Patel Engineering Ltd. and M/s. Liebherr Export AG India office under Section 112(a). Penalty of Rs. 5 lakhs each was imposed on Shri B.K. Chakraborty, Vice-President of the appellant-firm, Shri Pulok Gupta, Manager of the supplier s India Office and Shri D.M. Pradhan, Chartered Engineer. A penalty of Rs. 3 lakhs was imposed on Shri Rakesh Handa, the proprietor of CHA firm. A penalty of Rs. 1 lakh was imposed on Shri Mani Shankar Singh Asst. Chief Engineer of the appellant-firm. It is against this order, the appellants are before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were deliberately replaced for misdeclaring the year of manufacture. In any case, the alleged acts were committed abroad. The India office and its employee did not commit any such act rendering the goods liable for confiscation therefore, they cannot be penalized. He relies on a number of decisions in support of his contention :- (a) British India Steam Navigation Co. - 1990 (48) E.L.T. 481 (S.C.) (b) Guru Electronics Singapore Pvt. Ltd. - 2009 (240) E.L.T. 56 (T) (c) Ankit Gopal Agarwal - 2009 (234) E.L.T. 646 (T) (d) Advance Exports - 2007 (218) E.L.T. 39 (T) (e) Relax Safety Industries - 2002 (144) E.L.T. 652 (T) (f) C.K. Kunhammed - 1992 (62) E.L.T. 146 (T) 5. The learned Addl. Commissioner (AR) appearing for the Revenue, on the other hand, submits that on examination of the goods by Shed Appraiser under the supervision of Assistant Commissioner (Docks) and Assistant Commissioner, SIIB, it was found that name plates affixed on the goods have been tampered with and replaced by a new plate. Other plates found welded on the machine s main frame indicated the year of manufacture ranging between 1988 and 1992. The drawings for electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection, which was denied by the CHA. When asked about the markings found in the centre line of plates like 11/87, 1/90 1/92, he did not reply. Shri B.K. Chakraborty was the person, whole and sole incharge, for the purchase of the subject cranes and had given false statements and tried to conceal the facts in the import of cranes which were not eligible for concessional rate of duty under the EPCG scheme. Shri Mani Shankar Singh in his statement dated 13-2-2004 deposed that the machines were inspected in Germany whereas Shri Gerhard Class, representative of the supplier in India had stated that machines were inspected in Belgium. Thus, Shri Singh tried to mislead the department and aided and abetted the import of the impugned goods in violation of the EPCG scheme and therefore, penalty is imposable under Section 112(a) of the Act. Shri D.M. Pradhan, who issued the Chartered Engineer s certificate without inspection of the machine, is no more alive. Therefore, the proceedings against him abated. Shri Pulok Gupta also gave misleading statements. Therefore, Shri Pulok Gupta is also liable to penalty. 5.5 Regarding denial of cross-examination, there is no vested right of cross-exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the denial of cross-examination prejudicially affects the right of defence, can it be said that the principle of natural justice has been violated. In the present case, the copy of the expert panel s report has been given to the appellant. In fact, the appellant s representative Shri R.R. Dhar was part of the expert panel, which examined the goods and submitted the report. Shri R.R. Dhar had exressed his reservations on the observation and conclusions drawn by the expert panel and had submitted detailed comments vide letter dated 8-3-2004. Thus, sufficient opportunity has been given to the appellant to make submissions against the findings of the expert panel. Therefore, it cannot be said that denial of cross-examination of the members of the expert panel has caused prejudice to the appellant in making their defence. Thus the facts involved in the present case are different and distinguishable from those in the Kellogg India Pvt. Ltd. s case (supra) and, therefore, the ratio of the said decision is not applicable. 6.3 In the case of Kanungo Co. v. Commissioner of Customs, Calcutta - 1983 (13) E.L.T. 1486 (S.C.), the Hon ble Apex Court held that the principles of natural just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he gear box. This can happen even to a new machine remaining in idle condition for more than six months. The lifting cage has a very limited use only while erection of the Tower Cranes. As such may be the rollers are little jammed or rusted due to non-use for long time. Moreover, lifting cage is always considered as an accessory. Another observation of the expert panel is that the components like motor, gear box, bear the year of make 1988, 1990, etc. From this it may also be concluded that the cranes are more than 10 years old. The counter to the same by Shri Dhar is that it is nowhere written on the Motor s Gear Boxes the wording Year of Make . 6.5 Now, let us examine whether the counter given by Shri Dhar is sustainable and whether there is any other corroborative evidence sustaining the expert panel s observations. There is a correspondence dated 9-3-2004 from the supplier M/s. Liebherr Exports AG, Switzerland available in the records. In the said letter, it has been stated as follows :- Both cranes were sourced in Germany and were never been in use in Belgium. Before handover of the cranes to M/s. Liebherr Exports AG, the cranes were moved to a yard in Belgium for mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Pradhan, who was summoned to enquire into the issue of a bogus certificate by him, was asked to examine the goods and on such examination, he opined that the goods are of 1988 and 1992 vintage and more than 10 years old. Thus the evidences available on record, clearly establish that case of the Revenue that the goods under importation are not of 1995 make as claimed by the appellant, but they are of older vintage. 6.6 There is one more reason to come to this conclusion. As per Finance Ministry s Circular 493/124/86-Cus., dated 19-11-1987, as per the Import policy, importers of second hand machinery are required to produce a certificate from a professional independent chartered engineer or any equivalent institute in the country of supply of the machinery. This certificate, inter alia, indicates the currency, CIF value of the machinery, if purchased now, year of manufacture of the machinery and the sale price of the suppliers besides present conditions of the machinery and nature of reconditioning or repairs, if any, carried out. The appellant had not obtained such a Chartered Engineer s certificate as required in respect of second hand machinery. Once they realized that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled them to the exemption as held by the Hon ble Apex Court in the case of Mysore Metal Industries v. Collector [1988 (36) E.L.T. 369 (S.C)]. 6.8 In the case of Collector of Customs v. D. Bhoormull [1983 (13) E.L.T. 1546 (S.C.)], the Hon ble Apex Court held as follows :- These fundamental principles, shorn of technicalities, we have discussed earlier, apply only in a broad and pragmatic way to proceedings under Section 167(8) of the Act. The broad effect of the application of the basic principle underlying Section 106 of Evidence Act to cases under Section 167(8) is that the department would be deemed to have discharged its burden if it adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of a fact sought to be proved. In the present case, from the evidences available on record both circumstantial and direct, the department has discharged its burden that the machinery imported were more than 10 years old, by proving that the Chartered Engineer s certificate produced by the appellant was bogus and by way of positive evidence regarding the age of the machinery by way of examinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of the foreign supplier and whatever tampering of the name plates, etc. had been done abroad and it cannot be said that India office of the foreign supplier or its Manager were responsible for the same. In the absence of a positive evidence against them, it is not possible to sustain the penalty on them and accordingly, we set aside the penalties imposed on the India office of the foreign supplier and its Manager. 6.14 Coming to the penalty imposed on the Chartered Engineer, Sri Pradhan, who gave a certificate without examination of the goods, there is a positive role played by him in the misdeclaration of the goods which rendered the goods liable for confiscation. Since the said Chartered Engineer is no more alive, the proceedings against him abate and accordingly the penalty imposed on him is set aside. 6.15 The next issue for consideration is whether the CHA is liable to penalty under Section 112(a) of the Act. The CHA knew that the age of the machine has been misdeclared and a bogus certificate was obtained. In fact, it was the CHA who arranged for the false certificate. Therefore, he was party to the misdeclaration made by the appellant-importer which rendered the go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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