Tribunal rules in favor of appellant in import case under EPCG scheme

The tribunal found in favor of the appellant in a case involving the import of second-hand machinery under the EPCG scheme. The appellant had retained empty containers, which led to allegations of mis-declaration and suppression of value by the department. However, the tribunal determined that the containers were correctly declared in all import documents and that their value was included in the machine value. Relying on a Supreme Court judgment, the tribunal ruled that containers are not separately dutiable when goods are imported in them. As a result, the impugned order was set aside, and the appeal was allowed.

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Issues:
Import of second-hand machinery under EPCG scheme, retention of empty containers, confiscation of containers, mis-declaration, suppression of value, redemption fine, penalty.

Analysis:
The appellant imported second-hand machinery with accessories under the EPCG scheme, fulfilling the export obligation but retaining the empty containers. The department alleged suppression of the container value, leading to confiscation, a Rs. 12 lakh redemption fine, and a Rs. 4 lakh penalty. The appellant contended that the containers were correctly declared in the invoice, import documents, and supplier's certificate, showing no mis-declaration. The appellant argued that the goods were imported packed in containers as per the sale contract and shipping line invoices. The Adjudicating Authority's decision was based on the appellant's failure to declare the containers in the bill of entry.

Upon review, the tribunal found that all import documents clearly stated the goods were packed in containers, with the supplier's certificate confirming the container cost was included in the machine value. Citing a Supreme Court judgment, the tribunal held that containers are not separately dutiable when goods are imported in them. The tribunal concluded that there was no mis-declaration or suppression of container value, as the entire deal was to import the machinery packed in containers under the EPCG scheme. Consequently, the impugned order was set aside, and the appeal was allowed.

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