IQUIRA INC Vs. COMMISSIONER OF CUSTOMS, CHENNAI

JUDGEMENT

(1.) THIS appeal arises from Order -in -Appeal No. 691/2003 -Cus., dated 19 -11 -2003 passed by the Commissioner of Customs (Appeals), Chennai.

(2.) THE appellants have been permitted to file the appeal in this Bench in terms of Misc. Order No. 148/2004, dated 1 -4 -2004 in view of the appellant being situated within the jurisdiction of this Bench. The Commissioner (Appeals) upheld the Order -in -Original No. 1000/2003, dated 24 -4 -2003 (signed on 19 -9 -2003) by which the import of used Colour Monitors, which was not reconditioned and year of manufacture was not available, was held to have violated Para 2.33 of the EXIM Policy 2002 -2007 of Handbook of Procedure Volume -I, which prohibits import of second hand capital goods which are more than 10 years old, are a restricted item for import and requires a specific import licence. The appellants did not possess an import licence and prayed for clearance of the same by waiving the issue of Show Cause Notice. The said Para 2.33 permits import of second hand capital goods, which are less than 10 years old freely. The appellants contention was that the item is a second hand capital goods being less than 10 years old. However, despite this fact, they were charged under Section 111(d) of Customs Act and for penal action under Section 112(a) of the Customs Act on the ground that the import is unauthorised and is liable for confiscation. The Additional Commissioner did not issue a Show Cause Notice as it had been waived, however, during the personal hearing, he relied on the Chartered Engineers Certificate who inspected the goods and on seeing the condition of the goods had assessed the value of the imported goods as Rs. 3,55,286/ - CIF as against the declared value of Rs. 2,58,390/ - (CIF). He has held in the Order -in -Original that the value cannot be determined by following Rule 5, Rule 6 or Rule 7 of the Customs (Valuation) Rules and hence proceeded to determine the value under Rule 8 of the Valuation Rules by adopting the value given by the Chartered Engineer. A copy of the Chartered Engineers Certificate was not made available to the appellants by the Additional Commissioner. The Appellants filed an appeal before the Commissioner (Appeals) and urged these points. When the appeal was still pending before the Commissioner (Appeals) and argued on 7 -11 -2003 and it was submitted that there was no contravention of the EXIM Policy 2002 -2007 as the age of the imported capital goods was not more than 10 years and it was freely importable. The case had been reserved for orders and when the situation was thus, the Additional Commissioner appears to have been sounded on this issue and on the same date of 7 -11 -2003, he issued a corrigendum to the Order -in -Original No. 1000/2003 GR 5A, dated 24 -4 -2003 by which he invoked Para 2.17 of the EXIM Policy 2002 -2007, which restricts import of second hand goods and in terms of the corrigendum, it stated that since the goods imported are used colour monitors, which are in the nature of office equipments, hence, it required a specific licence. The Commissioner (Appeals) appears to have taken this corrigendum behind the back of the appellants and held the confiscation to be proper for violation of Para 2.17 of the EXIM Policy, and has held the goods to be confiscable and has reduced the redemption fine of Rs. 3,80,000/ - to Rs. 1,00,000/ - and penalty from Rs. 1,90,000/ - to Rs. 25,000/ -. At the outset, the learned Counsel attacked this procedure adopted by the Additional Commissioner in obtaining evidence behind their back in respect of the Chartered Engineers Certificate. It was submitted that after the appeal was heard by the Commissioner, the Additional Commissioner issued a corrigendum on the date on which the appeal was heard and proceeded to invoke Para 2.17 with regard to import of second hand goods. The Commissioner (Appeals) has proceeded to confirm the order -in -original on the basis of the corrigendum.

(3.) LEARNED Counsel relied on the Circular No. 502/68/1999 -CX, dated 16 -12 -1999 which has been issued by the Board on aspects pertaining to corrigendum issued subsequent to the adjudication order. The same is reproduced below : Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs Subject : Issue of corrigendum subsequent to Adjudication Order passed by departmental authorities - Advice sought from Law Ministry - Regd. While reviewing an Order -in -Original passed by a Commissioner, it was observed that the said Commissioner made substantive changes in his order by issuing a corrigendum nearly 10 months after issue of the order -in -original. It was felt, prima facie, that the substantive changes brought about by the corrigendum may be beyond the scope of Section 154 of the Customs Act, 1962 and may thus not stand judicial scrutiny by the appellate authorities.