INDIAN THERMOPLASTIC (P) LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) APPELLANT is aggrieved by the order passed by the Collector of Customs, Kandla, demanding differential duty of Rs. -5,65,365/ - on the import of slitter cum rewinder machine by the appellant, confiscating the machine under Section lll(d) and (m) of the Customs Act, 1962 with option to redeem it on payment of Rs. 1,00,000/ -, holding the appellant guilty of misdeclaration of description and value of the machine in order to obtain the benefit of OGL and to evade payment of duty and imposing penalty of Rs. 50,000/ - on the appellant and Rs. 25,000/ - on one of the Directors of the appellants' sister concern under Section 112 of the Act. The Collector did not impose penalty on the other officers of the appellant.

(2.) THE imported machine was second hand machine. Appellant declared the machine as "fully programmed paper cutting machine with three knife trimmers and accessories and spares" and declared value as Rs. 15,94,044/ -. The machine was assessed on the invoice value and duty was paid and the machine cleared. The Central Economic Intelligence Bureau received information that the machine imported was actually slitter cum rewinder machine worth much more than the invoice value. The premises of the Import Executive of the appellant were searched. The Chartered Engineer's certificate in original dated 6 -1 -1987 which came through banking channel was recovered. On a search of the residence of Director of the appellant's sister concern original Chartered Engineer's certificate also bearing the same date was recovered. It was the later certificate which had been submitted along with the import documents. The former certificate showed the year of manufacture as 1980, the price of new machine as DM 650000 and the CIF value of the imported machine with accessories and spares as DM 450000 while the year of manufacture and the CIF value of the imported machine were mentioned in the latter Certificate as February, 1982 and DM 284000 respectively. Persons connected with the appellant were questioned. Show cause notice was issued alleging misdeclaration of goods, misdeclaration of value and proposing demand of differential duty, confiscation and levy of penalty. The show cause notice proposed the adoption of CIF value as DM 450000 less depreciation. The notice also alleged that the machine imported was not paper cutting machine used in printing industry but slitter cum rewinding machine which would not fall under Item 11(9) of Part B Appendix I of AM 1985 -88 Policy and therefore, could not have been imported under OGL.

(3.) THE appellant denied the material averments in the show cause notice with reference to the description of the machine, the permissibility of import under OGL and the valuation. The Collector, however, rejected these contentions and passed the impugned order holding that the machine was a slitter cum rewinding machine and not paper cutting machine falling under the aforesaid item and could not have been imported under OGL but required specific licence. The Collector determined the CIF value at the time of import at Rs. 2,59,181 and the differential value originally.assessed and presently assessed differential duty.