AI Drafter 
TaxTMI 
TaxTMI 
2010 (2) TMI 1241
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....he petitioners in respect of detention/storage/demurrage charges suffered by them from the date of the order of the Commissioner of Customs (Appeals) till the date of its release. 2. It is the case of the petitioners that during the course of their trading operations, they imported 108 units and 77 units respectively of old and used digital multifunction (print and copying) machines falling under sub-heading No. 8443 31 00 of the Customs Tariff Act apart from 24 units of used photocopier machines falling under CTH 8443 39 30 by the petitioner in W.P. No. 2044 of 2010 under bill of entry Bearing Nos. 279266, dated 5-8-2009 and 294982, dated 25-8-2009 respectively. 2(a) In terms of the provisions of the Customs Act, 1962, the third respondent seized the same. The petitioners purchased the said goods from their supplier, M/s. Ruehl Printing Solutions GmbH, Baiersdorfer StraBe, 15,91099 Poxdorf/Germany for Euro 17,275/- against Invoice No. 907217, dated 1-7-2009 and from M/s. Habibullah Copiers Trading LLC, PO. No. 83565, Dubai, UAE for US $ 22100 against Invoice No. 190HCT2009, dated 5-8-2009 and accordingly declared the said transacted value in the bill of entry for a....
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....tatutory appeals in terms of Section 128 of the Customs Act before the first respondent, the Commissioner of Customs (Appeals), Chennai who by his Order-in-Appeal No. 1138/09, dated 15-9-2009 and Appeal No. 1147/09, dated 17-9-2009, while confirming the order of confiscation ordered by the second respondent, however, reduced the redemption fine and penalty to Rs. 2,10,000/- and Rs. 1,30,000/- and Rs. 2,00,000/- and Rs. 1,35,000/- respectively in both the cases. 2(g) The Commissioner of Customs (Appeals) passed the orders on 15-9-2009 and 17-9-2009 respectively and in spite of the same, the respondents have not allowed the petitioners to clear the goods out of the customs custody. In the representations made on 16-9-2009, 14-10-2009 and 19-10-2009 (W.P. No. 2044/10), 19-9-2009 and 14-10-2009, 19-10-2009 and 3-11-2009 (W.P. No. 2045/10), the petitioners have stated about the mounting detention and storage charges and requested to clear the goods based on the orders of Commissioner of Customs (Appeals) dated 15-9-2009, unless the said orders are annulled or stayed by the higher appellate forum. 2(h) It is stated that since the respondents have not passed any order clea....
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.... as C/Stay/13/2010 and early hearing petition was numbered as C/Misc/15/2010 in respect of the order which is subject matter in W.P. No. 2044 of 2010 and in respect of the order challenged in W.P. No. 2045 of 2010, appeal as well as stay petition was also filed on the same date, but remained to be numbered. 3(b) According to the respondents, when the statutory remedy of appeal is available, the writ petitions are not maintainable. It is also stated that when the petitioners themselves are having the right of appeal for the purpose of release of goods, without exhausting the same, the writ petitions filed under Article 226 of the Constitution are not maintainable. It is stated on the merits of the case that the petitioners have not produced specific licence for old and used digital multifunction (print & copying) machines and under the Foreign Trade Policy 2004-2009, there are restrictions regarding the import of second-hand goods except second-hand capital goods. Therefore, the confiscation has been done in accordance with law. 3(c) While it is admitted that the Additional Commissioner of Customs viz., the second respondent passed the original order under Section 11....
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....bunal. According to him, the mere filing of appeal is not deemed to be an automatic stay under the provisions of the Customs Act. It is his contention that by the delaying tactics of the respondents for nearly four months, the goods are detained and the petitioners have been paying demurrage as well as storage charges to a large extent causing irreparable loss to them. 4(a) It is his further contention that even in the letter dated 11-1-2009 by the counsel addressed on behalf of the petitioners, the petitioners have only agreed to furnish bank guarantee for 50% of the total fine and penalty imposed by the original authority, of course in addition to the duty, but under the impugned order the first respondent who is a subordinate to the Commissioner of Customs (Appeals) and who is expected to obey his orders, has chosen to pass independent orders on the basis of the letter of the petitioners dated 11-9-2009 and 15-9-2009 sent through their counsel allowing the petitioners not only to execute bank guarantee for 50% of fine and penalty as levied by the original authority and to pay duty applicable, but also directing the petitioners to pay fine and penalty as ordered by the Co....
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....y. The said order is as follows : "(i) I reject the declared value of EURO 17275 (C&F) of the subject goods imported vide Bill Entry No. 279266, dated 5-8-2009 under Rule 12 of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 and re-determine the value of the said goods at EURO 19830 (C&F) equivalent to Rs. 13,94,692/- (CIF) under Rule 9 of CVR 2007. (ii) I confiscate the impugned offending goods valued at Rs. 13,94,692/- (CIF) under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development & Regulation) Act, 1992. However, I give an option to the owner of the goods to redeem the same on payment of fine of Rs. 4,18,000/- (Rupees Four Lakhs Eighteen Thousand only) under Section 125 of the Customs Act, 1962 subject to payment of applicable rate of duty. (iii) I also impose a penalty of Rs. 3,49,000/- (Rupees Three Lakhs Forty Nine Thousand only) on M/s. Shubham Construction, Mirzapur, under Section 112(a) of the Customs Act, 1962, for having rendered the subject goods liable for confiscation and having committed the offence for the third time." 8. Li....
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....ms to impose deterrent fines. At various times, in photocopier cases judicial forums have imposed fine and penalty cumulatively varying between 20% [CC, Chennai v. Omex International - 2007 (216) E.L.T. 144 (Tri.-Chennai) to as much as 40% when margin of profit was found to be 25% [G.B. Trading Co. v. CC, Tuticorin - 2008 (231) E.L.T. 325 (Tri.-Chennai). Here no finding has been made with regard to margin of profit by the lower authority. However, the need to impose a sufficiently deterrent fine and penalty has to be balanced with the requirement for equity and justice. The lower authority has imposed as much as 30% fine and 25% penalty. In light of previous precedents, I am of the view that a fine of Rs. 2,10,000/- and penalty of Rs. 1,30,000/- would suffice under the circumstances. I therefore order accordingly. Appeal is partly allowed." "Order dated 17-9-2009 : I therefore do not accept the contention that the machines, which are multi function machines including the function of photocopying, are not liable for confiscation as photocopiers. The order of the lower authority is therefore upheld inasmuch as it refers to the above. As regards the plea that the fine and pen....
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....binding on the first respondent. The first respondent has passed the impugned orders, based on the representations stated to have been made by the petitioners through their counsel dated 11-11-2009 and 15-12-2009 which is also the case of the counsel for the respondents during the course of arguments. 12. Now, let us refer to the relevant portions of the said letters of the counsel for the petitioners dated 11-11-2009 and 15-12-2009 as follows : Letter dated 11-11-2009 : "4. My client states that in the last communication dated 19-10-2009 addressed to the learned Additional Commissioner he had after setting out the fact which came to his knowledge namely the fact of the department proposing to file an appeal against the order of the learned Commissioner of Customs (Appeals) and had accordingly come forward to furnish a BG for 50% of the total fine and penalty imposed by the learned adjudicating authority, which would sufficiently cover the confirmation of the fines and penalties approved by the learned Commissioner of Customs (Appeals) in his order-in-appeal referred to above." Letter dated 15-12-2009 : "4. My client states that in the last communicati....
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....remedy is available to the petitioners before the Tribunal has no meaning. 14. Now, it is relevant to mention the judgment of a Larger Bench of the Supreme Court in Union of India v. Kamlakshi Finance Corporation Ltd. [1991 (55) E.L.T. 433 (S.C.)] wherein it was insisted that the duty of the lower authorities is to follow the orders of the appellate authority and the relevant portion is as follows : "It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not 'acceptable' to the department - in itself an objectionable phrase - and is the subject-matte....
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.... petitioners complying with the orders of the Commissioner of Customs (Appeals), Chennai. 17. Insofar as the claim of the petitioners for the payment of demurrage and detention/storage charges, as submitted by the learned counsel for the respondents, the same is a separate issue which has to be decided based on appreciation of evidence and materials to be placed which cannot be done by this Court by exercising powers under Article 226 of the Constitution of India, by exchange of affidavits. Even assuming that there has been delay on the part of the respondents in releasing the goods, in the context of specific contention raised by the respondents that statutory appeals have been filed within the time stipulated therefor and the Tribunal is taking time for the purpose of numbering the appeals, it is not possible at this stage to decide who is at fault so as to come to the conclusion that any damages or compensation to which the petitioners may be otherwise entitled to. 18. There is no grave circumstance for this Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. It is not as if the petitioners who are regular importers ar....