2011 (8) TMI 1064 - AT - Customs

Tribunal reduces penalties on imported machines, distinguishes between photocopiers and multifunction machines.

COMMISSIONER OF CUSTOMS, CHENNAI Versus RASI OFFSET PRINTERS

COMMISSIONER OF CUSTOMS, CHENNAI Versus RASI OFFSET PRINTERS - 2014 (313) E.L.T. 234 (Tri. - Chennai) Issues Involved:1. Reduction in the quantum of fine imposed in lieu of confiscation of imported old/used photocopiers/digital multifunction machines.2. Reduction of penalty by the adjudicating authority.Issue-wise Detailed Analysis:1. Reduction in the Quantum of Fine Imposed in Lieu of Confiscation:The Revenue appealed against the reduction in fine imposed for the confiscation of imported old/used photocopiers and digital multifunction machines. The lower appellate authority had reduced the fine based on precedents such as the Hon'ble Madras High Court's decision in Commissioner of Customs, Tuticorin v. Sai Copiers and various Tribunal orders. The Revenue argued that restoring the original fine was necessary because importers repeatedly imported restricted goods without a valid import license. They contended that reducing the fine to a standard percentage would encourage continued contravention of the import policy.The Tribunal, however, referred to a recent decision in the case of M/s. Shivam International and M/s. Sree Maa Enterprises, which held that digital multifunctional print and copier machines are not classified as photocopiers and thus are not restricted for import under Para 2.17 of the Foreign Trade Policy (FTP). The Tribunal noted that the Chartered Engineer's inspection report confirmed that the imported goods were digital multifunctional machines, not merely photocopiers. The Tribunal emphasized that the FTP restricts only photocopier machines and not multifunctional machines capable of performing additional functions like printing, scanning, faxing, and emailing.The Tribunal also referenced the Hon'ble Supreme Court's judgment in Xerox India Ltd., which classified multifunctional machines based on their predominant function, supporting the view that these machines should not be considered photocopiers. Consequently, the Tribunal concluded that the confiscation and penalties related to 'old & used digital multifunctional print and copier machines' were incorrect and set aside the impugned orders to that extent.2. Reduction of Penalty by the Adjudicating Authority:The Revenue's appeal also challenged the reduction of penalties imposed by the adjudicating authority. The Tribunal noted that in similar cases, penalties had been consistently reduced to 5% of the value of the goods. The Tribunal found no justification for enhancing the penalties, especially since the adjudicating authority had determined that the imported machines had multifunctional capabilities and were not merely photocopiers.The Tribunal distinguished the present case from others cited by the Revenue, such as the judgment of the Hon'ble Bombay High Court in Commissioner of Customs, Mumbai v. Vaibhav Exports, which involved different goods and circumstances. The Tribunal also noted that no market enquiry was conducted by the department to ascertain the market price, and the estimated value provided by the Chartered Engineer was not definitive.Furthermore, the Tribunal observed that the respondents in some appeals were first-time importers and not repeated offenders, which did not justify an enhancement in penalties. The Tribunal highlighted that even in cases involving repeated offenders, such as Sai Copiers, the penalties were pegged at 5%.Conclusion:In conclusion, the Tribunal upheld the lower appellate authority's decision to reduce the fine and penalty, rejecting the Revenue's appeal for enhancement. The Tribunal emphasized that the imported goods were digital multifunctional machines, not restricted photocopiers, and that the penalties imposed were consistent with precedents and justified by the specific circumstances of the case. The appeals were dismissed, and the impugned orders were upheld.