2017 (10) TMI 1364 - HC - Customs

Court overturns CESTAT decision on imported photocopiers, ruling them freely importable

The High Court overturned the CESTAT's decision and restored the Appellate Commissioner's ruling that the imported used photocopiers were freely ... Review of order - import of used photocopiers - restricted item - case of Revenue is that proper remedy for the assessee is to carry the matter to the Supreme Court and that this review is nothing but a further appeal in disguise. Held that:- There can be no dispute with the settled legal principle that a review petition cannot be permitted to masquerade as an appeal in disguise. In the normal circumstances, a judgment pronounced by the Court should be treated as final and departure from this norm would be justified only when grounds for review, in terms of Order 47 Rule 1 CPC, are specifically made out. There was a manifest error in the order dismissing the appeal, as the issue raised therein was not even considered by this Court and the mistake committed by the CESTAT was just carried forward while dismissing the appeal - review petition allowed. Issues Involved:1. Whether the used photocopiers were freely importable or classified as restricted goods.2. Legality of the revaluation of the imported goods.3. Validity of the imposition of redemption fine and penalty.Detailed Analysis:1. Whether the used photocopiers were freely importable or classified as restricted goods:The primary issue was whether the used photocopiers imported by the assessee were freely importable or classified as restricted goods requiring a specific license. The Commissioner of Customs & Central Excise initially held that the goods were restricted and liable for confiscation under Section 111(d) of the Customs Act, 1962, due to the lack of a license. However, the Appellate Commissioner, referencing the CESTAT’s judgment in M/s. S & S International, concluded that the goods were freely importable and set aside the confiscation and penalty.2. Legality of the revaluation of the imported goods:The Commissioner re-determined the value of the imported photocopiers at Rs. 10,64,400/- from the declared value of Rs. 7,03,122/-, citing undervaluation by the assessee. The Appellate Commissioner confirmed this enhanced valuation. The CESTAT upheld the Commissioner’s revaluation, dismissing the assessee’s appeal on this ground, and the High Court did not find sufficient reason to interfere with this valuation.3. Validity of the imposition of redemption fine and penalty:The Commissioner imposed a redemption fine of Rs. 1,50,000/- and a penalty of Rs. 50,000/- under Sections 125 and 112(a) of the Customs Act, 1962, respectively. The Appellate Commissioner set aside these penalties, citing that the goods were freely importable. However, the CESTAT, relying on its earlier judgment in Rex Printing Press, reinstated the penalties, fixing the redemption fine at 10% and the penalty at 5% of the value of the imported goods. The High Court initially dismissed the appeal, treating the issue as one of quantum rather than legality.Review Petition:The assessee filed a review petition asserting an error apparent on the face of the record, arguing that the core issue of whether the goods were freely importable was overlooked. The High Court acknowledged this oversight, noting that the CESTAT and the Court had not considered whether the goods were freely importable, thus erroneously upholding the penalties.Final Judgment:Upon review, the High Court found a manifest error in its earlier dismissal of the appeal. The Larger Bench of the CESTAT in Atul Commodities (P) Ltd. had held that used photocopiers were freely importable, contradicting the Commissioner’s original stance. Consequently, the foundation for the redemption fine and penalty was erroneous. The High Court set aside the CESTAT’s order, restoring the Appellate Commissioner’s decision that the goods were freely importable and not liable for confiscation or penalties. The review petition was granted, and the appeal was allowed, resulting in no costs.