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2016 (4) TMI 138 - CESTAT CHENNAI

2016 (4) TMI 138 - CESTAT CHENNAI - TMI - Import of old and used photo copying machines - Mis-declaration of goods - Imposition of fine and penalty under Section 112 (a) of the Customs Act, 1964 - Enhancement of value and confiscation of the goods for contravention of license policy - During the during the period under import i.e. on 17.9.2004, the import of old and new photo copier machines covered under the policy as second hand capital goods and the policy was specifically amended on 19.10.20 .....

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And P. K. Choudhary, Member (J) For the Appellant : Mr. N. Viswanathan, Adv For the Respondent : Mr. B. Balamurugan, AC (AR) ORDER Per P. K. Choudhary The appellant filed this appeal against the Order of the adjudicating authority dated 20.10.2004. 2. The appellant M/s. A.I.R. Overseas, New Delhi, holders of Import Export Code No. 0599008067, imported a consignment of 308 nos. of old and used parts of main frame assemblies' of photocopier and other parts such as drum unit, functional gears, .....

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Shri N. Viswanathan, Advocate, appearing on behalf of the appellant placed the decision of the Tribunal in the case of M/s. Office Tec Industries Vs. CC (Port-Export), Chennai reported in 2015 (320) E.L.T. 150 (Tri. - Chennai), wherein the Tribunal observed that the import of second hand photocopier prior to 19-10-2005 also do not warrant licence for import. In that case, the value was enhanced by the Customs authorities and also confiscated the goods in terms of Section 111(d) of the Customs A .....

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d & used photo copying machines and enhancement of value and confiscation of the goods for contravention of license policy. The appellants imported these second hand photo copiers on 17.9.2004. As regards the contravention of policy, we find during the period under import, the import of old and new photo copier machines covered under the policy as second hand capital goods. The policy was specifically amended on 19.10.2005 where the second hand photo copiers were brought under restricted cat .....

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ppellants herein (although the value declared by the importers has been rejected and value enhanced by the Customs authorities, that is not the subject matter of challenge in any of these appeals). The goods have been confiscated in terms of Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act for import of goods without specific licence, and an option to redeem them on payment of fine has been extended. Penalty has also been impo .....

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is not restricted prior to 19-10-2005 (imports in all these appeals are prior to this date) and that Notification No. 31, dated 19-10-2005 restricts imports of such goods only on and after 19-10-2005. The Apex Court has upheld the decision dated 11-5-2005 of the Larger Bench of the Tribunal in M/s. Atul Commodity Pvt. Ltd. and the Hon'ble High Court of Andhra Pradesh also took the same view in Central Excise Appeal No. 52/05 and the Apex Court set aside the judgment dated 7-4-2006 of the Hon .....

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nd goods could be made only against a licence. They came in the restricted category. However, in the Handbook (2002-07) it was inter alia provided that old and used capital goods which were not more than 10 years old could be imported freely. Those goods, therefore, were treated as new goods. This resulted in confusion. Therefore, DGFT stepped in to clarify that second-hand photocopying machines, irrespective of the period of use, shall fall in the restricted category (see Policy Circular No. 19 .....

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imported under para 5.1 of the Policy. Reverting to para 2.17 of FTP (2004-09) read with para 2.33 of the Handbook (2004-09) one finds that import of second-hand capital goods is made free . Para 2.17 of FTP (2004-09) is in two parts. The first part deals with the meaning of the words second-hand goods . The second part states that import of second-hand capital goods shall be allowed freely. Para 3 of the Policy circular No. 20/05 states that import of second-hand goods shall be governed by the .....

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EPCG. As stated above, in this case, we are concerned with imports under general category and not under EPCG. We are in agreement with the view expressed by the Larger Bench of the Tribunal that photocopying machines are capital goods as defined under para 9.12. The Tribunal has held that the use of these machines for rendering services makes them capital goods. In fact, this finding on the user is not challenged by the Department. Therefore, import of old and used photocopying machines stands .....

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