MADHU INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS, AHMEDABAD

JUDGEMENT

(1.) VIDE impugned order the Commissioner of Customs, Ahmedabad has confiscated the second -hand machinery imported by the appellants on the ground that the same was more than 10 years old and was not allowed to be imported under Import Export Policy. However, he has given option to the appellants to redeem the same on payment of redemption fine of Rs. 42 lakhs. In addition he has also held that the machine in question was under -valued and has accordingly, confirmed the demand of duty of Rs. 21,59,290/ -. Penalty of Rs. 26 lakhs and of Rs. 8 lakhs stand imposed upon the importer M/s. Madhu Industries Ltd. and also on Shri Sushil Agarwal, Managing Director of the importing firm.

(2.) SHRI Devan Parikh, learned Advocate do not dispute the findings of machine being more than 10 years old and as such liable to confiscation. He, however, submits that total value of machine as declared by them was to the tune of Rs. 28,98,606/ -. As such imposition of redemption fine of Rs. 43 lakhs and penalty of Rs. 26 lakhs is much on the higher side. He places reliance upon the Tribunals decisions in the case of CC, Chennai v. Vijex Office Equipment Pvt. Ltd. - 2006 (202) E.L.T. 123 (Tri. -Chennai), and Iquira Inc. v. C.C, Chennai - 2004 (170) E.L.T. 583 (Tri. -Bang.) in suppprt of his submissions to reduce the redemption fine and penalty.

(3.) AS regards enhancement of value of second -hand machine, he submits that the Commissioner has not doubted or discarded the invoice but has enhanced the price based upon contemporaneous import. He submits that in case of old and used machine, no two imports can be identical and the value of each machine depends upon the condition of the same. Our attention has been drawn to the Honble Supreme Courts decision in the case of Tolin Rubbers Pvt. Ltd. v. C.C, Cochin - 2004 (163) E.L.T. 289 (S.C.) for the proposition that transaction value should normally be accepted and in exceptional circumstances the same has to be rejected and further determination has to be made under Rule 8. Reference has also been made to Bangalore Bench decision in the case of S and S International v. CCE, Hyderabad -II - 2005 (192) E.L.T. 194 (Tri. -Bang.) laying down the transaction value has to be accepted in the absence of any evidence of contemporaneous import. Inasmuch as there can be no contemporaneous import in respect of second -hand machinery, the Commissioners finding of enhancement of value are against the declared law.