MARINE CRAFTS AND EQUIPMENTS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants had imported 100 units of old diesel engines at Kandla from Singapore and filed Bill of Entry No. 6442 dated 03.12.1992 for clearance of the goods without payment of duty in terms of exemption Notification No. 211/83 -Cus. dated 23.07.1983 as amended. Along with the Bill of Entry, they also filed (i) Invoice dated 29.08.1992 covering 70 units of CL DAIHATSU 1000 cc engine valued at USD 215 per unit and 30 units of 4 FBI ISUZU 800 cc engine valued at USD 260 per unit (ii) Bill of Lading dated 29.08.1992 (iii) Certificate of Origin declaring Japan as the country of origin (iv) Packing list dated 29.08.1992 (v) Survey Report dated 13.06.1992 issued by M/s. SGS Singapore Pvt. Ltd. (vi) Certificate of Registration issued by the Directorate -General of Shipping, Bombay and (vii) SSI Certificate issued by the Directorate of Industries of the Government of Karnataka. However, the importer did not turn up for clearing the goods. The shipping agents, whose notice to the party for taking delivery order did not receive any response, requested for early destuffing of the cargo from the container. Subsequently, the goods were examined in the presence of a representative of the shipping agent on 26/27 April, 1993. The examination report showed that (i) 52 of the 100 diesel engines were fitted with compressor and the remaining engines were without compressor (ii) All engines were fitted with gearbox and alternator (iii) The engine capacity and year of manufacture were not found on any of the engines (iv) The engines were old and used and apparently not reconditioned (v) 48 compressors in loose were also found along with the engines. From the above report, it appeared to the Customs authorities that the import had been made in contravention of Section 3(2) of the Import and Export (Control) Act, 1947 and hence the goods were liable for confiscation under Section 111(d) of the Customs Act, 1962 and the importer was liable for penalty under Section 112(a) of the Customs Act. Accordingly, show -cause notice dated 27.05.1993 was issued to the appellants proposing to confiscate the goods and imposing penalty. The order dated 17.06.1993 passed by the Collector of Customs, Kandla, in adjudication of the show -cause notice, was set aside by this Tribunal and the case was remanded for fresh decision in accordance with the principles of natural justice. In the remanded proceedings, learned Commissioner of Customs, Kandla considered the contents of the letter dated 07.07.19,93 filed by the party and heard the party and passed the impugned order dated 14.10.1999.

(2.) IN the impugned order, learned Commissioner held that the imported engines, which were classified in the Bill of Entry under SH 8408.20 as "engines of a kind used for the propulsion of vehicles of Chapter 87", were not eligible for the benefit of Notification No. 211/83 ibid. He found that the engines were not meant for ocean -going vessels but only for vehicles such as motor cars, tractors etc. falling under Chapter 87 of the Customs Tariff. Learned Commissioner also took into account the opinion of 2 departmental machinery experts, which was to the effect that all the 100 diesel engines were automobile engines. On these findings, the goods were held liable for absolute confiscation under Section 111(d) of the Customs Act. Another finding recorded by the Commissioner for such confiscation was that, during the relevant period, second -hand diesel engines were consumer goods (and not capital goods) and hence could have been imported only under specific licence. The appellants had not produced any such licence. Having ordered absolute confiscation of the goods under Section 111(d) of the Customs Act, learned Commissioner also imposed a penalty of Rs. 5 lakhs on the importer under Section 112(a) of the Act.

(3.) WHEN the case was taken up by the Bench on 30.11.2006, there was no representation for the appellants despite notice, nor was their any application of theirs for adjournment. We have examined the records and heard learned SDR.