RAJ TELEVISION NETWORK Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) M /s. Raj Television Network Ltd. (appellants in Appeal No. C/293/2005) had imported certain telecommunication equipments under 2 EPCG licences dated 30.5.2003 and 18.7.2003 issued by the Directorate -General of Foreign Trade and had cleared the goods under 11 Bills of Entry during June to October 2003. The clearance was obtained against payment of duty on concessional rate in terms of Customs Notification No. 55/2003 dated 1.4.2003. The goods so cleared included a DSNG (Digital Satellite News Gathering) system, a satellite communication equipment, covered by Bill of Entry No. 6394 dated 6.8.2003. The remaining equipments were covered by the other 10 Bills of Entry. The EXIM Policy relevant to the period of subject imports had stipulated that satellite communication equipments (like DSNG equipment) classifiable under CTH 8525 20 92 could be imported only against an import licence issued by the WPC (Wireless Planning and Coordination) wing of the Department of Telecommunications under the Ministry of Communications and Information Technology (hereinafter referred to as WPC licence). A Separate licence from the same authority was required for establishing and operating the equipment. For obtaining this licence (called operating licence) the applicant was required to satisfy the licensing authority that the equipment conformed to the technical parameters such as frequency, emission, bandwidth etc. laid down by the said authority. Under the EPCG scheme, the appellant -company was required to fulfill their export obligation in relation to the imported capital goods within a period of 8 years from the date of issue of EPCG licence. Within this period, export obligation should be discharged in the following proportions: Block of 1st and 2nd years - Nil Block of 3rd and 4th years - 15% Block of 5th and 6th years - 35% Block of 7th and 8th years - 50% The benefit of concessional rate of duty under the Customs Notification was available to the imported goods, subject to the further condition that certificates from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise confirming installation and use of the capital goods in the importer's premises be produced within six months from the date of completion of imports or within such extended period as might be allowed by the Customs authorities. Of course, the importer had also to comply with other usual conditions attached to EPCG scheme in respect of the goods cleared under all the 11 Bills of Entry.

(2.) THE goods were cleared by the appellant -company after final assessments on the Bills of Entry by the assessing authority, followed by payment of the duty assessed (at concessional rate in terms of the Customs Notification), by the company.

(3.) IN November 2004, the Special Intelligence and Investigation Branch (SIIB) of the Department launched investigations into the above imports and found that the DSNG equipment had been imported and cleared without producing WPC licence. SIIB searched the importer's premises and seized documents such as copies of the Bills of Entry, copies of EPCG licences, proforma invoice, correspondence between the importer and the Ministry of Information and Broadcasting etc. They found that the importer had misclassified the goods and misdeclared its description in Bill of Entry No. 6394 dated 6.8.2003 with intent to secure clearance of the goods with the benefit of the Notification without WPC licence. The DSNG system was seized under a mahazar dated 23.11.2004 under Section 110 of the Customs Act. A scrutiny of the seized documents revealed that the appellant -company had classified the DSNG system under CTH 8529 90 90 as freely importable goods. Visual examination of the equipments and study of technical data available with it disclosed that the DSNG system was a complete set of equipments classifiable under CTH 8525 20 92 as 'other satellite communication equipment', which was restricted for import and could be imported only under WPC licence in terms of Customs Notification No. 71/53 dated 25.9.1953. SIIB also found that the appellant -company had obtained a permission from the Ministry of Information and Broadcasting to use DSNG equipment for getting live feeds from the States of Tamilnadu, Andhra Pradesh, Kerala and Karnataka to be downlinked at their earth station in Chennai for permitted TV channels. This permission was seen to have been communicated in the Ministry's letter dated 5.8.2003. SIIB did not accept this permission as substitute for WPC licence. Further, they found that the appellant -company had applied for such licence on 16.10.2003 only and were yet to receive the licence. Statements were recorded from Shri M. Raajhendran, Managing Director of the company (appellant in Appeal No. C/294/2005), Shri M. Raveendran, Director of the Company (appellant in Appeal No. C/295/2005) and Shri E. Kirubakaran, Senior Engineer - Maintenance of the Company under Section 108 of the Customs act. Any WPC licence or installation certificate was not produced by the appellants even during the course of investigations. On the basis of investigative results, the Department issued show -cause notice dated 8.2.2005 to the appellant -company, its Managing Director and 3 other Directors viz. S/Shri M. Raveendran, M. Rajarathinam (appellant in Appeal No. C/296/2005) and M. Raghunathan (appellant in Appeal No. C/297/2005) proposing: