2009 (2) TMI 135 - AT - Customs

Tribunal rules in favor of appellant, overturns machine confiscation based on age evidence

The Tribunal overturned the confiscation of a second hand Teijin Seiki draw twister machine imported by the appellant, ruling that the machine was less ... Import of Second Hand Machinery – Without License – alleged that the machine was more than 10 years old – some parts in the machines found older than 10 years – Held that the adjudicating authority has relied upon the fact that solenoid operated valve and the power cable show the date of manufacture as 1988 and accordingly it has to be concluded that the machine was actually manufactured in 1988. This fact also stand explained by the foreign manufacturer that the machine being admittedly old, some of the parts were replaced and valve and power cable may have been manufactured in 1988. - Year of manufacture found on a small component of whole machinery can not lead to the conclusion that the entire machinery was manufactured in that particular year. - Confiscation of the machinery and penalties is set aside. Issues:1. Confiscation of second hand Teijin Seiki draw twister machine imported by the appellant.2. Duty confirmation against the appellant.3. Imposition of penalties on M/s. Nova Petrochemicals and its Director.4. Dispute over the age of the imported machine.Confiscation of Machine:The Commissioner of Customs, Ahmedabad, confiscated a second hand draw twister machine imported by the appellant from Korea. The appellant had the option to redeem the machine on payment of a fine. The Customs authorities believed the machine was over 10 years old, requiring a specific import license. Investigations were initiated, and proceedings were brought against the appellant, culminating in the impugned order.Duty Confirmation and Penalties:The duty of approximately Rs.17.07 Lakh was confirmed against the appellant, along with penalties imposed on M/s. Nova Petrochemicals and the Director. The penalties were imposed under Section 112(a) of the Customs Act.Dispute over Machine's Age:The appellant contended that the machine was not over 10 years old, as stated by the Customs authorities. The machine was accompanied by a Chartered Engineer certificate showing the year of manufacture as 1992. The Customs authorities doubted the genuineness of the certificate due to a reference to the Letter of Credit date. However, the appellant explained that the LC date was added later as per the LC conditions. The Tribunal cited precedents where machinery accompanied by a Chartered Engineer certificate confirming its age had to be accepted as such, in the absence of contradictory evidence.The Customs communicated with the foreign manufacturer, who repeatedly confirmed the machine's manufacture year as 1992. Despite one letter mentioning the machine being over a decade old, it was clarified that this was a rough expression and did not contradict the actual year of manufacture. The presence of parts with 1988 manufacturing dates was explained by the foreign manufacturer as replacements in an old machine. Precedents were cited where the year of manufacture found on a component did not determine the entire machinery's manufacturing year.Judgment:The Tribunal found no merit in the Customs' conclusions regarding the machine's age. It held that the machine was indeed less than 10 years old, overturning the confiscation and penalties. The matter was remanded to the original adjudicating authority solely for assessing the appellant's liability based on the machine's age. The confiscation of the machinery and penalties imposed on the appellants were set aside, and both appeals were disposed of accordingly.