TaxTMI 
TaxTMI 
1989 (2) TMI 288
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....d KIS brand still photography processing and Printing Equipment." The equipment is stated in the OGL APP. 1 Part B List 8 Item No. 39 of Import Export Policy 1985-88. The goods are in very good condition and as per your order dt. 12-12-86. The equipments comprise the following: (a) Four - DN Negative Processors Serial Nos. 3924,2525,3914 & 3923. (b) Four Colour Printer Serial Nos. 2225, 2161,1911 & 1907. (c) Four Film Dryers. (d) Four sets of wooden cabinet stands for the film processors and printers." 2. As the goods imported were second-hand, a certificate dated 27-1-1987 issued by Daplas Electronics (P) Ltd., Chartered Engineers, certifying that the following 4 sets were KIS Mini Lab Colour Photographic Processing System viz., (a) DN Negative processors Sl. Nos. 3924, 2525,3914 & 3923. (b) Magnum speed printer Sl. Nos. 2225, 2161,1911 & 1907. together with their associated Film Dryers and Wooden Cabinet stands for the above mentioned sets were inspected and the age of the machine was certified as 3 years and the then value of the same was US $ 2,000/- per set. The importers also produced a copy of catalogue of M/s. KIS INDUSTRIES (P) LTD., for the KIS Min....
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....rm was also recorded. The value declared was found to be very low. At the time of filing of the bill of entry the importers had produced xerox copy of catalogue of KIS Mini Lab System. The same catalogue was produced by Shri K.A. Basheer when his statement was recorded on 30th March,1987. The department obtained a quotation from M/s. KIS Industries Pvt. Ltd., Singapore through a source. According to the said quotation the price of 1 Unit KIS Mini Lab Magnum speed was found to be US $ 22,750 GIF Madras. 5. As per the detailed examination report, the importers had imported 17 complete units of KIS Mini Lab system (both used and new) apart from a few pieces of colour printers, film dryers and cabinets as well as other items viz., (a) 2 Nos Vacuum Cleaners (used) (b) 2 Nos Water Pumps (used) (c) 1 No Air-conditioner (used) with Stabilizer (d) 1 No Steel Cash Box (used) (e) 4 Nos Cotton Shirts (new) (f) 2 Nos Wooden Tables (used) (g) 5 Nos Steel Stools (used) (h) 8390 Nos Negative Wallets in 3 packages (i) 50 Nos Plastic Spools (used) (]) 50 kgs. used wires. 6. These items were found imported as against the declaration of 4 sets of secondhand KIS bran....
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.... photographic processing & printing equipment 17,24,878 2 Nos. Colour Printers 1,20,000 1 No. Film Drier 30,000 9 Nos. Wooden Cabinet Stand 22,500 9. The following goods were also confiscated under Section 111(m), (1) and (d) of the Customs Act. However, the same were allowed to redeemed on payment of a fine of Rs. 5 lakhs under Section 125 of the Customs Act, 1962 :- (i) 4 sets of second hand KIS brand still photographic processing & printing equipment having Serial Nos. 3924, 2525, 3914 and 3923 in the negative processors and 2225, 2161,1911 and 1907 in the printers (i) 4 sets of second hand KIS brand still photographic processing & printing equipment having Serial Nos. 3924, 2525, 3914 and 3923 in the negative processors and 2225, 2161,1911 and 1907 in the printers Rs. 5,30,732 (ii) 2 Nos. Vacuum Cleaners (used) 1,000/- (iii) 2 Nos. Water Pumps (used) 200/- (iv) 1 No. Air-conditioner with Stabilizer (used) 1,500/- (v) 1 No. Steel Cash Box (used) 750/- (vi) 4 Nos. Cotton Shirts (new) 40/- (vii) 2 Nos. Wooden Tables (used) 150/- (viii) 5 Nos....
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....t sizes of paper at the same time. The production of this Model was stopped in 1985. In 1985 KIS Magnum Speed Model was introduced. The basic feature of this Model is the same as that of the Magnum except the speed is faster than that of Magnum. KIS Mini Lab system comprised of four standard components. The chemical preparation and storage unit, the Negative Processor, the Printer and the Film Dryer. A letter to this effect is part of the paper book (Page 115) filed by the Respondent. The said letter dated 20th August, 1987 is written to Shri K.A. Basheer by M/s. KIS Industries (Pvt) Ltd. Shri Lakshmikumaran, the learned Advocate has drawn the attention of the Bench to the Inspection Report of the Appraiser, which appears from pages 1 to 8 of the paper book filed by the Respondent and to the Bill of Entry filed by the appellants which appears on pages 9 & 10 of the Paper book. Shri Lakshmikumaran states that the Revenue's examination report clearly shows that the machine imported is 'Papier Model' which is at Sl. No. 109 of the examination report. It reads "1 Unit used papier colour printer Sl. No. TN 1913A -1". He has also slated that the inspection report on page 1 pertains to Ne....
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....pellants that the catalogue did not pertain to the goods imported. Shri Durghayya argued that even the Chartered Engineer's Certificate clearly indicates that the four sets of equipments at Sl. Nos. 2225, 2161, 1911 & 1907 were Magnum Speed Printers and the Chartered Engineer's Certificate was produced by the appellants for their claim under OGL and for valuation of the goods. Shri Durghayya argued that the goods on examination were found to be in agreement with the description given in the catalogue and in the Chartered Engineer's Certificate. The appellants had declared the value of the goods at US $ 8,000 which is equivalent to Rs. 1,06,146 and the Revenue has assessed the value of the same at more than Rs. 24 lakhs. The appellant had claimed that the equipment imported was 'Papier Model' whereas as per the Revenue it is Magnum Model. Shri Durghayya has referred to the letter written by DBS Finance Ltd. to M/s. Premier Commercial Enterprises dated 9th September, 1986 which appears on page 31 of the Respondent's paper book. It clearly shows that the machine was capable of printing 3R, 4R and 5R sizes and as such it is a Magnum Model. Shri Durghayya also referred to the letter wri....
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....ate has stated that even for the sake of argument if it is taken that the importation was unauthorised merely on account of non-furnishing of a certificate from the Chartered Engineer the appellants should have been given an option to redeem the goods after payment of fine. He has again pleaded for the acceptance of the appeal. 14. We have heard both the sides and have gone through the facts and circumstances of the case. Facts are not in dispute that in the Bill of Entry, the appellants had given the description as "Four sets of second-hand KIS brand still PHOTOGRAPHY PROCESSING AND PRINTING EQUIPMENT" and the value was declared at Rs. 1,06,146 and the value as per invoice was CIF US $ 8,000/-. We have also gone through the Chartered Engineer's Certificate, which is reproduced below :- "Daplas Electronics (Private) Limited P.O. Box 195 Katong, Singapore 9143, CABLE : DAPRONICS TELEPHONE 414967 Your Ref: Our Ref: AW/COV/8701-1 Singapore 27th January, 1987 Singapore Colour Centre, 669, Mount Road, Madras 600 006 India. Dear Sirs, CERTIFICATE OF VALUATION I, ALLAN Y K WONG, Chartered and Registered Professional Electrical Engineer hereby certify that I h....
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.... Film Dryer. The model name in all the three models is imprinted in the Printer. I hope the above details give sufficient information about our mini lab systems. Yours faithfully KIS Industries (Pvt.) Ltd. Sd/- PHILIPPE DARDEL Managing Director." 16. This letter was filed by the appellants before the Adjudicating authority. The genuineness of this letter has not been doubted by the Respondent. Para (i) of the said letter clearly says that Papier Model "which is also known as TN/DN Model was manufactured until 1984. This model can only print one size of photographs and take only one size of paper." Para (ii) of the letter shows that KIS Magnum Model was intrduced in 1984 and this model could print three different sizes of photograph namely, 3R, 4R and 5R sizes, and the production of this Model was stopped in 1985. As per the Chartered Engineer's certificate the year of manufacture of the machines is 1983. The genuineness of the Chartered Engineer's certificate has also not been doubted by the Revenue authorities. The examination report which runs from pages 1 to 9 of the Respondent's paper book clearly shows that most of the goods imported were used. There are s....
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....ants had attached the catalogue of Magnum Model cannot lead to the inference that the goods imported are Magnum Speed Model, especially when the Negative Processor and Colour Printers bear serial numbers as well as date of manufacture. We have perused in detail the examination reports dated 13-3-1987 and 16-3-1987. A close examination of the report shows the position of the Negative Processor and Colour Printers as under :- "Relevant Extract from the Examination Reports dated 13/16-3-1987 (Pages 3 to 7 of the Respondent's paper book) Sl. No. Processors Sl. No. Printers 2. New 4. Old 5. New 9. New 1907 A 6. New 109. Used TN 1913 A 127. New DN 3914 125. Used TN 1895 A 128. New DN 3924 130. Used TN 2225 A 147. New DN3890 135. Used TN 1923 A 151. New DN 3929 136. Used TN 1862 A 148. Used DN 3913 126. Used TN 1911 A 149. Used DN 2534 A 145. Used TN 2142 A 150. Used DN 2145 A 137. New TN 1860 A 152. Used DN 2528 A 138. New TN 2150 A 153. Used DN 2096 A 139. New TN 2228 A 154. Used DN 2093 A 140. New TN 1611 A 155. ....
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.... Magnum Model in respect of Colour Printers in the Chartered Engineer's certificate should not lead to the inference that the machines imported was Magnum Model. Keeping in view the totality of the facts and circumstances of the case and on detailed examination of the examination reports we hold that the machines imported by the appellants are Papier Models. 20. Now coming to the valuation aspect, in the invoice and packing list which appear at pages 16 and 17 of the Respondent's paper book, the value has been shown as US $ 8,000/- and the Chartered Engineer in his certificate had adopted the same value at US $ 2,000/- per set. The examination report shows that there are 7 new processors and ten new printers in addition there are ten used processors and 9 old printers. The number of processors imported is 17 and the printers imported is 19. Thus two printers are in excess. Keeping in view the totality of the facts and circumstances of the case, we hold that the value in terms of the provisions of Section 14(1)(a) of the Customs Act, 1962 cannot be adopted and as such we have to resort to the provisions of Section 14(l)(b) of the Customs Act, 1962 read with Rule 8 of the Valuatio....
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....ed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) For the removal of doubts it is hereby declared that any fine in lieu of confiscation of goods imposed under sub-section (1) shall be in addition to any duty and charges payable in respect of such goods." 22. A simple reading of the Section shows that where the goods have been imported in violation of the conditions of licence granted to the assessee, the goods are liable to confiscation under Section 111(d) of the Customs Act, 1962. In the matter before us the goods fall under App. 1 SI. No. 39 of Appendix I Part II List of Capital goods allowed under Open General Licence. The importation is subject to the condition laid down under para 64 of AM 85-88 which appears on page 22 of the AM 85-88 Policy. The appellants had produced a Chartered Engineer's Certificate only in respect of 4 sets of KIS Mini Lab system. No Chartered Engineer's Certificate has been filed for 13 Mini Lab system and the two colour printers which are in excess of the 17 sets. No bifurcation of value is possible in respect of the two printers. The invoice dated 14-2-1983 which appears on page 1....