TMI Blog2002 (3) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... nfiscated under Sections 111(d) and 111(o) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development Regulation) Act, 1992 on the ground that the import of old and used diesel engines fall under the restricted category of imports in terms of Para 5.3 of the EXIM Policy 2001-2002 AM, and requires specific licence for such imports. After hearing them on 6-8-2001, the ld. Commissioner, vide impugned Order-in-Original ordered absolute confiscation of the impugned goods covered by the two Bills of Entry, and imposed a penalty of Rs. 3.00 lakhs in respect of B.E. No. 82, dtd. 24-5-2001 and Rs. 4.00 lakhs in respect of B.E. No. 75, dtd. 19-5-2001. (b) The issues involved herein : - (i) Whether the impugned goods viz., old and used diesel engines imported by the appellants are liable for absolute confiscation under the provisions of Sections 111(d) of the Customs Act, 1962 read with Sections 3(2) and 3(3) of the Foreign Trade (Development Regulation) Act, 1992; (ii) Whether the Commissioner of Customs, Pune was correct in absolutely confiscating the impugned goods when admittedly 37 such consignments of used Diesel Engines imported by variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the ld. Commissioner has not given any finding on this submission in the impugned order. (iii) There was no mis-declaration by the appellants with reference to quantity or the value of the Diesel Engines and this is an admitted position and clearly mentioned vide Para 3 of the show cause notice which cites the Report dated 26-5-2001 of the Chartered Engineer. Therefore, the case of Shehla Enterprise - 1995 (80) E.L.T. 360 is not applicable. (iv) In similar cases where old and used engines were imported at CFS, Pune, the ld. Commissioner in his capacity as Commissioner (Appeals) has permitted clearance of the said goods on payment of redemption fine though there was mis-declaration of value, which was enhanced by the original authority. In that case he did not treat the said goods as prohibited goods nor he cited the decision of the Hon'ble Supreme Court in the case of Sheikh Mohammed Omar. (v) After issue of the impugned order on 6-9-2001, the ld. Commissioner passed a common order-in-original disposing of nine show cause notices, involving the import of 9 consignments of "Poppy Seeds", which admittedly is a restricted item under the EXIM Policy. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia." (viii) The appellants submit that the Order passed by the ld. Commissioner absolutely confiscating the goods is contrary to the decisions of the Hon'ble Supreme Court as well as the Hon'ble Tribunal. Further the same is also not maintainable in law as it traverses beyond the show cause notice and also shows non-application of mind and visible bias singularly against the appellants. Keeping in mind the delay in clearance of the impugned goods and the demurrages and losses suffered by the appellants, the R.F. may kindly be determined. 2(c). Misc. application No. 93/02 by Revenue reiterates the submissions as regards the non-availability of appellants firm/factory in Bangalore as in Misc. application No. 60/02 dealt vide Order 53-54/02, dtd. 6-2-2002. 3. We have heard both sides and considered the matter and find :- (a) After considering the plea of the importers that diesel engines are not prohibited items under the Import Policy 1992-97 by specific mention therein as they were in the nature of consumer goods it was held that they were not liable for absolute confiscation, the Customs authorities had been allowing release of the second hand diesel engines all alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Department has not accepted the order of the Commissioner (Appeals) and appeal has been filed against that order". During the hearing before us the learned DR has submitted that Commissioner (Appeals) could not have enhanced the penalty in the case of M/s Preet International in appeal. We have considered the submissions on this issue by both sides. In the case of M/s Preet International, the very same goods, had not been treated as prohibited goods nor the decision of Sheikh Md. Omer (SC) or Shehla Enterprises was applied, by the very same adjudicator, even though, there was a finding of mis-declaration of value arrived by him. We find, the same adjudicator, had the knowledge of these cases i.e., in the case of Sheikh Md. Omar Shehla Enterprises (where undervalued diesel engines were absolutely confiscated) he could have applied those case law, in his knowledge, to the case M/s. Preet International before him. Since, as Commissioner (Appeals), he could have exercised the statutory power given to him under first proviso to Section 128A(1), by putting the appellants in M/s. Preet International case to a notice. This was not done. The learned DRs defence, therefore does not an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcutta High Court while examining the conduct of the Commissioner as Adjudicating, and ordering absolute confiscation, of a Motor Car imported without a licence, when the practice was to allow the import of similar cars on Redemption fine, upheld the view of the Calcutta High Court in Para 8 (extracted herein, above) in the case of Mercantile Express Co. (supra) by holding : - "15. No doubt the Court was concerned with the interpretation of the tariff item, but the principles laid down therein are equally applicable in the case like this. The issue involved here relates to the taxing statute or the fiscal enactments and the Customs Authorities are bound by their previous decisions. If the authorities have on previous occasions allowed the importer to release the imported car upon payment of the fine in lieu of confiscation, they cannot unless there are compelling reasons, depart from the previous decisions..........." (iii) This view of binding nature of Administrative Precedent Treatment of imports, has been considered by the Division Bench of Calcutta High Court in the case of C.C., Calcutta v. Uday Engineering Enterprises Others [1987 (27) E.L.T. 234 (Cal.)] upheld t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hine International Another v. Collector of Customs, Madras [1993 (42) ECC 282 (Mad.)]. The Hon'ble Court held in this case, has also held : - "..........The Customs authority cannot take a different view, in my view, at different times, with regard, to imports of same goods as to whether to confiscate completely or pass an order of confiscation giving an option to the Bill (SIC) by paying a fine. It is true that it is the discretion of the authority under section 125 of the Customs Act. But that discretion is to be applied fairly. There is no doubt that, with regard to cassia, orders were passed by the department earlier only ordering release on payment of redemption fine or penalty only, in lieu of confiscation. It has to be followed in these cases also." We therefore would order, on the same lines, as regards the treatment to be meted to imports of Diesel engines herein. Since admittedly there have been a practice at CFS, Pune, to release such goods on fine and from the perusal of the other case law cited and reported, the same practice continues unabated even today all over India. Such redemption fine releases, are not considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure at CFS, Pune and no Public notice having been issued, induce us to follow Shah Tools Bearing Co. case (supra) where such requirement is mandated to set aside this order of Absolute Confiscation. (g) The appellants have relied upon Order-in-Original passed by the same Commissioner, Pune in the case of "Poppy Seeds" an item, import of which is prohibited subject to clearance from the Narcotics Control Authorities of Country of Shipment and Country of Imports. In that case, the goods imported under 9 BEs by the same importer were allowed to be cleared provisionally, presumably as per Board's instructions on expeditious clearance of imported cargo; they were found to be misdeclared in value and had impugned the provision of 111(d) of the Customs Act also, by the very same adjudicator, yet he has ordered the release of the same 9 consignments of the same importer on redemption fine. The Sheikh Omar case of the Apex Court which was extensively relied upon in the present case before us, was overlooked in the case of 'Poppy Seeds' order passed almost one month after the present order. If this is not selective amnesia, which surely it is not, then it could be the dawn of the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, not to order absolute confiscations of Gold, in cases where the passengers had even cleared the "Green Channel", but were otherwise eligible for the import and had enough foreign exchange to cover the duty. The approach in the two Acts viz, "Imports and Exports (Control) Act, 1947" and Foreign Trade (Development Regulation) Act, 1992 have vastly changed 'objects and reasons'. There is a declared, sea charge in approach to and in Import Control Laws. Considering these objects and reasons in the later 1992 Act vis-a-vis the earlier 1947 Act resort to 'Absolute Confiscation' should be an exception. It could be resorted, only in case of Negative List of imports and not where interpretation of "Capital goods" and the scope and the applicability of the definition thereto is in a contest. We would consider the resort to the change in the object and reason of the two Acts to consider that the decision of Sheikh Md. Omar of the SC delivered in 1963, under the erstwhile 1947 Import law could though not be founded fault with, as far as 'restrictions' being a "prohibition", but it could not be an authority to arrive at a finding, that "offer of redemption fine is not mandatory" in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly, of goods or for rendering services..........". The definition then goes on to give certain illustrations which include, inter alia, 'power generation sets' but not 'diesel engines'. It is not the, claim of the importer that the imported diesel engines are required for manufacture or production, either directly or indirectly, of any goods or for rendering any services. Rather, contention of the importer is that engines will be assembled into DG sets. Therefore, these will not be covered by the definition of "capital goods" and will not be allowed to be imported in terms of para 5.4 of the EXIM Policy." These findings have not considered. The plea of the importers, as is evident from their letter dated 16-5-2001 to the Deputy Commissioner intimating : "5. We are also enclosing the copy of a letter issued by the DGFT, Delhi dated 22-8-98 wherein the same policy is in force that diesel engines covered under heading 8408.20 imported as capital goods in second hand condition are freely importable as per para 5.4 of the Policy." In the same letter, they had informed the department :- "1. We are registered as a SSI Unit with the Directorate of Industries and Commerce, Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
