SRI VENKATESH ENTERPRISES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants imported second -hand Photocopiers, without import licence, and filed a Bill of Entry dated 20.5.2005 for clearance of the machines. Ld. Commissioner of Customs confiscated the goods for want of licence and imposed a penalty of Rs. 6 lakhs on the importer under Section 112 of the Customs Act. He also enhanced the value of the goods and demanded differential duty. The differential duty was paid by the party along with a cash deposit of over Rs. 2.6 lakhs and bank guarantee for over Rs. 16 lakhs at the time of provisional clearance of the goods. At present, we are dealing with an application for waiver of pre -deposit and stay of recovery in respect of the penalty amount.

(2.) LD . Counsel submits that second -hand Photocopiers being capital goods did not require licence for import at the material time. In this connection, he relies on the Tribunal's Larger Bench decision in Atul Commodities (P) Ltd. v. Commissioner of Customs, Cochin 2005 (184) E.T.T. 135 Tri -LB, wherein second -hand Photocopiers were held to be capital goods and not consumer goods. It is pointed out that an appeal from the Larger Bench decision was dismissed by the Andhra Pradesh High Court on the ground that no question of law had arisen in such appeal. We have perused the High Court's order dated 4.10.2005 in CE Appeal No. 52/2005. It would appear from this order that the finding of fact recorded by the Tribunal's Larger Bench in the case of Atul Commodities (supra) stood affirmed. Ld. Counsel has also brought on record a copy of Notification No. 31/2005, dated 19.10.2005 of the Central Government (issued by DGFT), which amended Para 2 -17 of the Foreign Trade Policy. 2004.09. On a comparison of Para 2.17 before its amendment and Para 2.17 after its amendment, we find that second -hand Photocopier machines have ever been recognized as second -hand capital goods. We have heard ld. SDR also, who has referred to the Larger Bench order to bring home to us the point that secondhand Photocopier machines were recognized as consumer goods only by the DGFT during the material period and that, if those goods were consumer goods for one scheme (EPCG), they should equally be so for every scheme. This submission of ld. SDR is based on a few earlier circulars of DGFT.

(3.) AS the amending notification of the Central Government, issued by the DGFT, is clear enough to show that the second -hand Photocopying machines are capital goods, we need not look back to the old circulars of DGFT. The position is doubly clear from the Tribunal's Larger Bench decision as affirmed by the High Court. It is not in dispute that second -hand capital goods required no licence for import on the date of filing of the Bill of Entry. Hence, prima facie, the confiscation order of the Commissioner is not sustainable and for that matter, the appellants have a strong case against the penalty. Accordingly, there will he waiver of pre -deposit and stay of recovery in respect of the penalty amount.