TaxTMI 
TaxTMI 
1997 (11) TMI 325
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....9201512, dated 15-12-1992 issued by one M/s. R. Cressy & Sons Ltd., U.K. Bill of Entry No. 107131, dated 26-3-1993 was filed through Clearing Agent, M/s. Foreign Traders, Delhi at ICD, New Delhi for clearance under Open General Licence and CIF value was declared as UK GBP 5500.00. This consignment was awaiting clearance from ICD Customs, New Delhi, as on 7-4-1993. 3. The importer company had imported and cleared through ICD, New Delhi, another shipment covered by Invoice No. 1212, dated 2-11-1992 B/E No. 106979, dated 15-3-1993 filed through above said CHA by declaring the goods as used Textiles Machinery which includes one Bobbin Winder (1987), two Punching Machines (1986), one Card Repeating Machine (1986), two Mending Machines (1990) and two Saurer IS-55 10 Yards Machines (1986), Embroidery Machines. These goods were cleared by ICD Customs after recovering customs duty amounting to Rs. 2,56,233/- on 20-3-1993. The value was declared as Swiss Francs 34,800,00 (CIF). 4. As per the Import Policy 1992-97 Chapter V para 25 read with para 28, second-hand capital goods may be imported without a licence in garment/ Hosiery/made-ups sector and such second-hand machines sh....
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.... the Customs Act, 1962 thereby making the subject goods liable for confiscation under Section 111(m) of the Customs Act, 1962, read with Clause 3 of Import (Control) Order, 1955, Section 3 of Imports and Exports Act, 1947 read with Section 4 of Foreign Trade (Regulation and Development) Act, 1992 as amended; (c) had in relation to the import of subject embroidery machines, imported vide B/E No. 106979, dated 15-3-1993 done or omitted to do acts, which acts or omissions had rendered the subject goods as per annexure, liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962 and thereby have become liable to penal action under the provisions of Section 112 of the Customs Act, 1962. 8. They were called upon to explain as to why : (a) The subject goods valued at Rs. 6,47,338.00 imported vide B/E No. 106979, dated 15-3-1993 imported and cleared under B/E No. 106979, dated 15-3-1993 should not be confiscated under Section 111(d) of the Customs Act read with Clause 3 of the Import (Control) Order, 1955, Section 3 of Imports and Exports Act, 1947 read with Section 4 of Foreign Trade (Regulation & Development) Act, 1992; (b) The ....
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....emsp;that the DRI has not proved that N.V. Schiffli was ever manufactured by M/s. Saurer; that DRI was trying to prove that IS 55 was manufactured much earlier than 1986 or was a non existent Model; that their machine was IS 55 as confirmed by Mr. Dubey; that the value was GBP 5,500 CIF and that correct invoice was the one dated 15-12-1992 which was submitted along with the packing list signed by Mrs. C.D. Cressy, C.S.; that the DRI has not proved that C.D. Cressy was not the C.S. of M/s. R. Cressy and Sons; that in fact invoice dated 31-3-1993 forwarded by H.M. Customs was the genuine invoice. (x) that the DRI had pressurised them to furnish Bank guarantee for few crores of Rupees to get the machine released on provisional basis on the wrong belief that the machines was as costly as GBP 1,00,000 while now H.M. Customs has verified the actual price as GBP 5,500 only, that his statement dated 27-9-1993 was under threat and pressure. (xi) that Sh. Dubey has stated that imported machine was Model IS 55. (xii) that Mrs. Vedi is not yet a Director in this Co. but only a proposed Director pending approval of RBI. (xiii) that N.V. Schiffli is a non existent....
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....in the order. The sole allegation is therefore, about the age of the machines in question, the allegation being that all of them are more than 7 years old. Noting these observations, the Commissioner has held that the basic allegation about the age of the machine is based on letter No. 1200/IMB/PS/AN/645, dated 8-5-1993 from M/s. Eastern Engineering Co., Bombay through Vikram S. Uppal, Director of M/s. Hindustan Embroidery Mills Pvt. Ltd., Delhi, M/s. Eastern Engineering Co., Bombay claimed that they are the agents of M/s. Saurer Embroidery System, Switzerland and M/s. Hindustan Embroidery Mills Pvt. Ltd. is obviously one of their customers. The whole allegation is, therefore, based on not a direct evidence by M/s. Saurer Embroidery System, Switzerland but a letter written by M/s. Eastern Engineering Co., Bombay who claimed that M/s. Saurer Embroidery System, Switzerland are their principals. He has observed that this type of allegation suffers from an inherent weakness, i.e. the complaint has been generated out of trade rivalry. However, whatever be the worth of such an allegation, it needs to be decided. He has proceeded to observe that M/s. Eastern Engineering Co., Bombay claime....
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....he year of manufacture inscribed on the machines. He has held that the age of the machine was deliberately misdeclared is not supported by any evidence. He has given a detailed finding on this aspect of the matter. He has also held that there is no evidence of under-invoice in the case. He has concluded that M/s. Volga Embroidery was not aware of that whether value of the machine imported by them was CIF or FOB. Therefore, he has held that there was no deliberate attempt on their part to suppress the value particularly when they had declared the value of the machine correctly. 12. As regards the point of the Embroidery machine being less than 7 years old, he has held that there is overwhelming evidence that these machines are definitely more than 7 years old. He has noted that Shri R.L. Dubey during the course of his cross-examination has stated that these machines are re-conditioned machines. However, they looked new and give an impression that they are new. It would, therefore, appear that the Chartered Engineers Certificate is not correct, even though the age of the machine cannot be judged very correctly by anyone. He has stated that as per his knowledge IS 55 machines ....
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....inted out that the Commissioner himself had arrived at the conclusion that the charge of falsification and manipulation would appear to be difficult to sustain, as the age of the machine is to be judged by its appearance and not necessarily on the basis of order of the manufacture inscribed on the machine. He submits that there is no mens rea on the part of the appellants to evade duty and in view of the findings arrived at, the imposition of penalty is not justified. In this regard, he relied on the judgment rendered in the case of Akbar Badruddin Jiwani v. Collector of Customs, as reported in 1990 (47) E.L.T. 161 and that of Sir Shadi Lal Sugar and General Mills Ltd. v. Commissioner of Income-Tax as reported in 1987 (31) E.L.T. 325. He also relied on the following judgments : 1. Extrusion v. Collector of Customs [1990 (26) E.L.T. 52] 2. Mogul Line Ltd. & Others v. I. J. Dutta and Another [1990 (26) ECR 100] 3. Merck Spares, Delhi v. Collector of Central Excise & Customs [1983 (13) E.L.T. 1261] 4. Collector of Customs v. Seth Enterprises Pvt. Ltd. [1990 (49) E.L.T. 612] 5. Tata Engineering & Locomotive Company Ltd. v. Collector of Customs [1....