TaxTMI 
TaxTMI 
2002 (7) TMI 368
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....st the said appellant under the provisions of Section 28(2) of the Customs Act, 1962. Penalty of equivalent amount has been imposed upon M/s. Tanya Diagnostic Centre under the provisions of Section 114A of the Customs Act. In addition personal penalty of Rs. 5,00,000/- (Rupees five lakhs) has been imposed upon Dr. Kamal Kr. Dutta, Director of M/s. Tanya Diagnostic Centre under Section 112(b) of the Customs Act, 1962. Penalty of Rs. 10,000/- (Rupees ten thousand) has been imposed on Shri Arun Saini, another Director of M/s. Tanya Diagnostic Centre and Penalty of Rs. 20,000/- (Rupees twenty thousand) on Smt. Manjusha Dutta, Director of M/s. Tanya Diagnostic Centre. Penalties of Rs. 10,000/- (Rupees ten thousand) each has been imposed upon the rest of the appellants. 2.1 Briefly stated the facts of the case are as under :- 2.2 M/s. Tanya Diagnostic Centre Pvt. Ltd. (hereinafter referred as Tanya) is a Pvt. Ltd. Co. and Dr. Kamal Kr. Dutta is its Director. The said appellant imported one Philips Tomoscan CX Head Scanner (1987 Model) as per the actual user condition contained in Import-Export Policy, paragraph 5.4 regarding import of second-hand capital goods. The said g....
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....l invoice produced by M/s. Tanya should not be rejected and the value should be enhanced based upon another bill of entry; as to why the goods should not be confiscated inasmuch as the same were installed at two different clinics at Calcutta and as to why the penalties should not be imposed upon various persons. The said show cause notice culminated into the impugned order passed by the Commissioner. 3.  We have heard Shri P.K. Dutta, ld. adv. Along with Shri Biswajit Mukherjee, ld. adv. appearing for M/s. Tanya. The other appellants have been represented by different advs. as indicated in the preamble of this order. Shri V.K. Chaturvedi, ld. SDR represented the Revenue. 4. It is the contention of Shri P.K. Dutta, ld. adv. appearing for M/s. Tanya that there was no misdeclaration on the part of the importer. The machine was described in the bill of entry as follows :- Medical Equipments (Head Scanner Philips Tomoscan with Accessories) - Philips Tomoscan Head Scanner High Power X-ray (Year of Manufacture -1987) Used Medical X-ray Apparatus of Power more than 50 KW. He submits that the description given by them in their bill of entry fully t....
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....ion on behalf of the importer and no appeal having been filed by the Revenue against such assessment. 5. As regards the valuation aspect Shri Dutta submits that the same has been dropped by the ld. adjudicating authority. 6. Shri Dutta further submits that the findings of the Commissioner that they had imported two machines, he submits that the second machine, which was found at the premises of Manisha was incomplete inasmuch as one ADC card was missing and the other was defective out of the 10 ADC cards required for the machine. Inasmuch as the machine was incomplete, the same was not declared by them. 7. As regards the installation of the machines at the premises of Maa Durga and Manisha, he submits that the same were imported by them for installation at Bihar, where M/s. Tanya intended to open a diagnostic centre. However, it was subsequently discovered by them that three phase electricity line was not in existence at the Dhanbad site. The machines were installed at the premises of M/s. Maa Durga to keep the same functional. He submits that from the agreement entered into with Maa Durga it is clear that the said agreement was a temporary arrangement witho....
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....violated by the appellants. 10. As regards the first issue i.e. the classification the appellants have strongly contended that they had correctly described the goods in their bill of entry, which description tallied with the description given by the foreign supplier in their commercial invoice as also as given in the chartered engineer's certificate. They had claimed the classification under Heading 9022.14. The goods were examined and re-examined by the customs authorities before assessing the same under the sub-heading. If the Revenue authorities were not satisfied with the classification claimed by the appellant, they could have changed the classification at the time of assessment of the machine. Inasmuch as the bill of entry has been finally assessed and duty paid by the appellant, the change in classification based upon the misdeclaration about the description of the goods is not justified inasmuch as there was in effect no misdeclaration. 11. It is seen that if the goods are classifiable under Heading 9022.14, they are entitled to lower rate of duty. Whereas such exemption is not available to the goods if the same are held to be classifiable under Heading 9022....
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....period of about one year, re-classify the goods under a different heading, when there was no misdeclaration as regards the description of the goods by the appellant. As such without giving any finding on the correct classification of the machine, we hold that its re-classification by the Commissioner in subsequent proceedings without filing any appeal against the assessment order was not justified. 13. As regards the mis-description about the number of machines the appellants' contention is that the second machine installed in the premises by M/s. Manisha Imaging was not a complete machine inasmuch as one ADC card was missing and one ADC card was not functioning. We do not agree with the above submissions of the appellant. The Commissioner by referring to the rules of interpretation has concluded that the appellants have imported two machines by misdeclaring the same as one number high power X-ray machine. Rule 2A of General Rules for the interpretation of the Schedule of the Customs Tariff Act, 1975 is to the effect that any reference in a Heading to an article shall be taken to include a reference to that article incomplete or un-finished, provided that as presented, the ....
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....S.C.) = 2001 (46) RLT 121 (SC). In Para 13 of their judgment, it has been observed by their Lordships that the arrangements with another hospital in the proximity which is a sister concern of the centre, with whom the centre had entered into an agreement for reserving 10% beds, will not satisfy the conditions of the notification involved in that case, which require reservation of 10% of beds for the same hospital where the equipment is installed. As such we find that M/s. Tanya have violated the provisions of Para 5.4 of ITC policy, making the goods liable for confiscation and the appellant liable for penal action under the provisions of the Customs Act, 1962. Accordingly, we uphold the confiscation of the machines with an option to the appellant to redeem the same on payment of redemption fine of Rs. 5,00,000/- (Rupees five lakhs), as ordered by the Commissioner. 15. As regards the personal penalty upon M/s. Tanya, we have already observed that the same is imposable for importation of extra machine without declaration and without payment of duty and in violation of the actual user condition. However, inamsuch as their appeal succeeds on the first issue of classification, t....
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....es ten thousand) upon him, we find that the said appellant acted in routine discharge of his duties as a chartered accountant and it cannot be said that he was involved in the wrongful importation of the machines and the violations of actual user condition by Dr. Dutta. As such we do not find any justifiable reason for imposition of penalties upon him and allow his appeal by setting aside the same. 19. Personal penalty of Rs. 10,000/- (Rupees ten thousand) has also been imposed on Shri Pratik Kr. Sen, Director of M/s. GYPTPAK (I) Pvt. Ltd. It is the contention of the appellant that he acted only as a consultant and there was no role played by him for the wrongful importation. After going through the discussions of the adjudicating authority, we find that the ld. Commissioner has placed heavy reliance upon the fact that the said appellant's clearing agency licence was cancelled in the past on account of manipulations of documents and he has vast knowledge of customs clearance and had given guidance to Dr. Dutta to plan fraudulent activities with ulterior motive. However, we find that there is no direct evidence on record against the said appellant and as such we set aside th....
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.... imported is Rs. one crore and above. The second-hand capital goods shall not be transferred, sold or otherwise disposed of within a period of five years from the date of import, except with the prior permission of the Director General of Foreign Trade." 24. There is no allegation that the imports did not satisfy the above policy provisions. There is no complaint that at the time of clearance of the goods the appellants satisfied the requirement for the import. The only allegation is that importers alienated the machines before the expiry of the stipulated period of five years. Paragraph 5.4 of Handbook of Procedures makes it clear that that alienation can be permitted by the Director General of Foreign Trade. 25. From the above legal provisions, it is clear that issues relating to alienation of imported second-hand capital goods under actual user condition relating to import policy fell within the purview of Director General of Foreign Trade. For that reason, it is clear that customs jurisdiction ended at the time of clearance of the goods, at which point the jurisdiction of the Director General of Foreign Trade began. I am afraid that th....
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....as a minimum residual life of 5 years, and (ii) a declaration to the effect that he is an actual user, in the form given in Appendix-9; that in addition a certificate certifying the residual life of the capital goods and reasonability of the certification agencies where the CIF value of the capital goods being imported is more than Rs. 1 crore. The Handbook also provides that the second-hand capital goods will not be transferred, sold or otherwise disposed of within a period of five years from the date of import except with the prior permission of the Director General of Foreign Trade. Ld. Advocate further submitted that at the time of import of the impugned goods they have complied with all the conditions contained in Para 5.4 of the ITC Policy read with Handbook; that the impugned goods cannot be confiscated on the ground that they have alienated the impugned goods before the expiry of the stipulated period of five years; that alienation in terms of Handbook can be permitted by the Director General of Foreign Trade (DGFT); that on account of such legal position, ld. Member (Technical) has given his findings that "alienation of imported second-hand capital goods under actual user ....
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....ed that the adjudicating authority had imposed a penalty of Rs. 5 lakhs on Dr. Kamal Kumar Dutta, Appellant Number II, which has been reduced by the ld. Member (Judicial) to Rs. 3 lakhs whereas the ld. Member (Technical) has held that as the amount of duty evaded on the importation of second-hand machine is required to be determined afresh by the adjudicating authority and penalty depends upon the duty evaded, the determination regarding penalty on Dr. Dutta for the import of second-hand machine is also more appropriately required to be left to be determined by the adjudicating authority in a fresh proceeding. He, therefore, requested that the determination of penalty on Dr. Dutta may also be remanded to the adjudicating authority as the ld. Member (Judicial) has remanded the question of penalty to be imposed on M/s Tanya Diagnostic Centre to the adjudicating authority after determination of demand of duty leviable on the second-hand machine. 31. I have considered the submissions of both the sides. Section 111(d) of the Customs Act provides that any goods which are imported or attempted to be imported or are brought within Indian Customs Waters for the purposes of being imp....
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.... subject to distribution of rapeseed oil according to the provisions of Essential Commodities Act. In the light of these facts, the Hon'ble Calcutta High Court held that whether the petitioner would be able to sell rapeseed in view of restrictions imposed by the Essential Commodities Act cannot be a ground for holding that the importation is unauthorised or withholding the release of the goods. The ratio of the decision in the case of Biocon India (Pvt.) Ltd. is not at all relevant for deciding the present matter as it was held therein that the Customs authorities are not empowered to take a cognizance of violation of Central Excise Act and Rules. I am, therefore, of the view that the adjudicating authority was competent to order for confiscation of the machines for violation of the ITC conditions. I answer the question accordingly. 32. Regarding imposition of penalty on Dr. Dutta, I observe that the ld. Member (Judicial), while holding that the personal penalty is imposable for importation of extra machines without declaration and without payment of duty on M/s. Tanya Diagnostic Centre, has remanded the matter to the Commissioner for deciding the quantum of penalty afresh ....