RAJENDRA S. SANGHVI Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellant had imported what were declared to be components of photocopying machines and filed a bill of entry dated 3.7.1987 for clearance of the goods. The import was in terms of a licence dated 14.7.1986 issued by the Controller of Imports and Exports, wherein 21 components of photocopying machines were allowed to be imported. The invoice filed with the bill of entry also mentioned these 21 components of photocopying machines. The goods were assessed to duty on the basis of the declaration made by the importer and this duty was paid also. However, on second - check examination of the goods, the SIIB found that complete units of photocopying machines had been imported in SKD/CKD condition. This examination was carried out on 10.8.1987 in the presence of the importer's CHA. A re -examination of the consignment was held in November 1987, again in the presence of the importer's representative. From this re -examination also, it emerged that the imported components could be assembled into complete machines. It was also observed that the brand name of a photocopier (Canon 305) was embossed on the plastic cabinet of the machine. Technical literature relating to such photocopiers was also examined. On the basis of the results of these investigations, a show -cause notice was issued to the appellant, proposing (a) to reject the declared value and demand differential duty of over Rs. 20.9 lakhs, (b) to confiscate the goods under Section 111(d) and (m) of the Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 and (c) to impose penalty on the importer under Section 112(a) of the Customs Act. In adjudication of this notice, the learned Collector of Customs confirmed the demand of differential duty against the assessee, ordered confiscation of the goods with option for redemption against payment of fine of Rs. 13,97,000/ - and imposed a penalty of Rs. 5,00,000/ - on the party. The appeal filed against the Collector's order was disposed of by this Tribunal in favour of the importer. During the pendency of that appeal, there was further examination of the goods (which were still in departmental custody) pursuant to a direction of the Bench and the examination report was in favour of the department. However, that report was not accepted by this Tribunal and the decision on the appeal came to be in favour of the importer. The department filed Customs Appeal No. 62 of 2009 before the Hon'ble High Court, which was disposed of on 11.8.2009. The Hon'ble High Court, in its order dated 11.8.2009, referred to the inspection report dated 10.8.1987 as also the latest inspection report dated 11.8.2008 and made the following observations:

(2.) AFTER examining the records and hearing both sides, we note that this case arises for fresh decision on the basis of correct assessment of the material evidence available on record. 21 components of photocopying machines were allowed to be imported vide licence dated 14.7.1986. These very components were imported by the licensee vide invoice dated 22.6.1987 and bill of entry dated 3.7.1987. Though the bill of entry was assessed on the basis of the declaration made by the importer, the dispute arose as to whether what was imported was a consignment of photocopying machines in SKD/CKD condition or only components of such machines. That was a question of fact, which called for physical inspection/examination of the goods. In the second -check examination conducted by the customs authorities in the shed, the consignment was found to be containing 20 complete photocopying machines in CKD condition vide report dated 10.8.1987. Subsequently, on 10.11.1987, a sample of the goods was examined before the Collector of Customs in the presence of the appellant and their CHA, whereupon the customs authorities confirmed that the machines imported were "Canon 305" with reference to the technical information available. These results were communicated to the party from the Custom House in a letter dated 10.11.1987. In the same letter, the party was given an opportunity to make additional arguments, if any. Later on, after hearing the party, the learned Collector passed the impugned order.

(3.) LEARNED Counsel has argued that some parts of photocopying machines were indigenously procured for the purpose of assemblage, along with imported components, into complete photocopying machines. However, she has not been able to cite any documentary evidence of this fact. In the circumstances, the contention that some components of photocopying machines were imported and others indigenously procured cannot be given any weightage. There are three examination reports in this case. All the three examinations were carried out in the presence of the appellant and/or their representatives. All the three examination reports brought out concurrent findings, which are to the effect that the consignment in question consisted of 20 complete units of photocopying machines of Canon 305 brand along with stray components of photocopying machine. Among these reports, the last one is a part of the appellate proceedings before this Tribunal. This Tribunal directed a re -examination of the goods and stipulated certain conditions therefor. In keeping with these conditions, the examination was conducted before the adjudicating authority in the presence of representatives of the appellant. The examination report dated 29.9.2008 is a part of the record and the same is against the appellant. We are of the considered view that, where the appellant was a party to the departmental appeal before the Hon'ble High Court but yet chose not to challenge the Hon'ble High Court's order wherein the examination report of 2008 was also referred to for the purpose of guidance to this Tribunal while remanding the case, the appellant cannot take a turnabout to challenge the examination report of 2008 in the manner the learned Counsel has chosen to do today. The examination report dated 29.9.2008 is a part and parcel of these proceedings inasmuch as such examination was held in terms of the specific direction issued by this Tribunal. It stands on a different footing vis -à -vis the earlier examination reports. Had the appellant any genuine grievance against the examination report, they would have raised the same before the Tribunal itself in the earlier round of litigation. Even after remand of the case by the Hon'ble High Court, we find, there is no contest to the examination report dated 29.9.2008. That report must bind both parties to this appeal. This view is also consistent with the observations made by the Hon'ble High Court in its order dated 11.8.2009.