PARK IMPEX INC. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THE appellants are challenging the correctness of the OIA No. 148/2004 -Cus.(B), dated 23 -12 -2004 by which the authorities have refused to accept the prayer for clearance of Polycom Viewstation FX PAL new style camera with one conversion cable and visual concerts FX as capital goods. The appellants have not challenged the correctness of the order treating the items to be second hand item. It is their contention that both the authorities have accepted the item to be in the nature of office equipment akin to Photocopying machines, computers and PCs which are aids for efficient office functioning offering easy way to connect, conference and making distance communications as natural and interactive, enabling meeting participants as being there. However, the findings recorded that the equipment is covered under DGFT Policy Circular No. 16 (RE -2002)/2002 -2007, dated 29 -9 -2003 which was issued in the nature of a clarification to attract the item under restrictions placed on import of second hand items as per Para 2.17 of the EXIM Policy 2004 -2009. They have also challenged the order of confiscation under Section 111(d) of the Customs Act on the ground that the import is not valid import covered by licence/permission. It is their submission that the second hand machinery, which are capital goods and meant for service industry, are covered by the Policy itself. Specific reference is made to Para 2.33 of the Handbook of Import Export Procedure 2002 -2003 which permits import of second hand capital goods freely which are capital goods. In terms of 9.12, Capital Goods have been defined to mean any plant, machinery, equipment or accessories required for manufacture or production either directly or indirectly, of goods or for rendering services...... They contend that the item has been brought for rendering services and the Tribunal, in the case of BE -Office Automation Pvt. Ltd. & Another v. CC, Mumbai - 2004 (63) RLT 125 (CESTAT -Del.) has accepted photocopier machines to be capital goods being used for rendering services and held that it cannot be considered as consumer goods. The Tribunal has considered the said item to be eligible for un -restricted import. It is pleaded by the Counsel that both the authorities have held the imported item to be akin to photocopying machines. Therefore, this ruling clearly applies to the facts of the case. Further reliance was also made on Wipro Ltd. v. CC, Bangalore - 2004 (173) E.L.T. 207 (Tri. -Bang.) wherein Video Conferencing equipment has been treated as capital goods when imported for development of software. The learned Counsel also submits that the transaction value cannot be described and value enhanced on the basis of Internet prices.

(2.) THE appellants have also challenged the enhancement of valuation on the basis of similar items trading on Internet on higher price. In this regard, he relies on the Amar Embroidery v. CC, Mumbai - 2003 (154) E.L.T. 664 (Tri. -Del.), Pearless Pack Ltd. v. CC, New Delhi - 2003 (157) E.L.T. 177 (Tri. -Del.) on the same plea. Further reliance was placed in the judgment rendered in the case of Madhu Overseas Corporation v. CC, Chennai - 2003 (154) E.L.T. 255 (Tri. - Chennai) and that of Speco Industrial Corporation v. CC, Amritsar - 2003 (157) E.L.T. 284 (Tri. -Del.); Prasant Glass Works P. Ltd. v. Collector of Customs, Calcutta - 1996 (87) E.L.T. 518 (Tribunal); Eicher Tractors Ltd. v. CC, Mumbai - 2000 (122) E.L.T. 321 (S.C.) ; CC, Chennai v. DTE Exports Pvt. Ltd. - 2003 (151) E.L.T. 380 (Tri. - Chennai); Hoogly Mills Project Ltd. v. CC, Visakhapatnam - 2003 (162) E.L.T. 172 (Tri. - Kolkata).

(3.) THE learned JCDR distinguished the Wipro Ltd. case on the ground that Video Conferencing equipment, which has been imported for the process of development of software, has been held to be capital goods while the present item can be used by any person and cannot be considered to be used in the service industry. The learned JCDR reiterated the plea of the authorities below with regard to enhancement of value.