COMMISSIONER OF CUSTOMS Vs. ATUL COMMODITIES PVT LTD

JUDGEMENT

(1.) These appeals have been preferred by the Commissioner of Customs. Common questions arise for consideration in all these appeals and hence we are disposing of these cases by a common judgment. Question posed is whether second-hand photocopiers are capital goods or consumer goods and whether the import of second-hand photocopiers require licence and whether the import is governed by paragraph 2.17 of the Export Import Policy 2004-2009. Conflict of opinions were expressed by various Benches of the Tribunals and consequently the matter was referred to a Full Bench of CESTAT. CESTAT took the view that second-hand photocopiers are capital goods within the meaning of paragraph 9.12 and freely importable under paragraph 2.17 and are not consumer goods within the meaning of Exim Policy for the year 2004-2009 Commissioner of Customs is aggrieved by those orders and has preferred these appeals. For disposal of these appeals we may refer to the facts in CUA. No. 11 of 2005.

(2.) Respondent private limited company had filed B/E 154419/25-1-05 for import of various models of used photocopiers. The goods were invoiced at US $ CIF and the total assessable value worked out to Rs, 19,20,474/-. Goods were examined in the Office of the Customs and were found to be as per the declaration. The declared price was compared with the contemporary import price at other ports and the price of models of photocopier was found to be low. The details of said prices were given to the importer and it was proposed to raise a query on the importer and reject the transaction value in terms of Rule 10(A) of Customs Valuation Rules, 1988 and the value was proposed to be re-fixed under Rule 6/8 of Valuation Rules, 1988 based on the contemporary import price/Chartered Engineer Certificate. The proposed assessable value worked out to Rs. 24,11,741/-. It was noticed that the second-hand photocopiers are not importable under para 2.33 of Hand Book of Procedures to Foreign Trade Policy and the same was restricted under para 2.17 of the Foreign Trade Policy. Since the exporter had failed to produce any valid import licence it was noticed that the goods are liable to confiscation under Section 111(d) read with para 2.17 of Foreign Trade Policy. It was also noticed that the importer was liable for penalty under Section 112 of Customs Act, 1962. Importers were therefore called upon to show cause to the Commissioner of Customs as to why the goods imported under B/E 154419, dated 25-1-2005 should not be confiscated and penalty imposed. A show cause notice dated 25-2-2005 was therefore issued to the importer under Section 124 of the Customs Act, 1962. Reasons for issuing such show cause notice has been specifically stated in the notice. We may extract the reasons for easy reference.

(3.) Tribunal took the view that second-hand photocopiers are capital goods within the meaning of paragraph 9.12 and freely importable under paragraph 2.17 and are not consumer goods. Tribunal has also found the circulars Nos. 16/03, 19/03 and 20/05 issued by the Director General of Foreign Trade dealt with imports under the EPCG Scheme and those circulars have no application to the general imports of the nature made by the importer and therefore held that second-hand photocopiers are capital goods within the meaning of paragraph 9.12 and freely importable under paragraph 2.17 and are not consumer goods.