COMMISSIONER OF CUSTOMS Vs. RYDERTRAC EXPORTS

JUDGEMENT

(1.) THE brief facts of the case are that the officers of the DRI seized 107 second -hand machines, out of which 42 machines had not yet been cleared (while the remaining 65 machines had already been cleared) and were seized from the business premises of Kulbir Singh, Partner of M/s. Rydertrac Exports (34 machines from business premises at Wazirpur Industrial Area were seized on 7 -9 -1989, while 31 such machines were seized from another business premises in Wazirpur Industrial Area on 5 -10 -1989). The charge of the Department was that the importer did not have an industrial unit and was not an actual user and also did not possess valid import licence for the import of 42 machines sought to be imported, but only producted additional licences which did not cover the import. It was alleged that the importer had failed to produce any evidence for import of 34 second -hand machines seized on 7 -9 -1989, while in respect of 31 machines seized on 5 -10 -1989, the importer was able to produce the Bill of Entry and additional licences against which 28 machines had been cleared earlier and could not produce evidence for import of remaining 3 second -hand machines. A show cause notice dated 18 -1 -1990 was issued to M/s. Rydertrac Exports and its partners proposing confiscation of the entire quantity of 107 secondhand machines under Section 111(d) and proposing imposition of penalty under Section 112 of the Customs Act, 1962. The Commissioner of Customs adjudicated the case vide his Order -in -Original dated 24 -12 -1996, ordering release of 65 second -hand machines seized from two different business premises at Wazirpur Industrial Area, and confiscated 42 second -hand machines under Section 111(d) with option to redeem the same on payment of a fine of Rs. 1.5 lakhs and imposing a penalty of Rs. 50,000/ - on M/s. Rydertrac Exports.

(2.) THE Revenue challenges the order of the Commissioner on two counts (1) that the Commissioner should have confiscated the 65 second -hand machines imported earlier and (2) that the redemption fine and penalty are not commensurate with the value of the 42 second -hand machines which is Rs. 26 lakhs.

(3.) WE have heard Shri Satnam Singh, learned SDR and Shri Harbans Singh, learned Advocate and record our findings as under: Point No. 1 - Release of 65 second -hand machines These machines had already been cleared by the Proper Officer of the Customs under an order passed in terms of Section 47 of the Customs Act, 1962. The import of these machines were neither covered under OGL nor could have been imported under the additional licences produced, in the absence of specific endorsement thereon which is required in the case of second -hand machines. The order passed under Section 47 does not oust the jurisdiction of the Customs authorities to confiscate the goods if the conditions under which the goods were permitted to be imported were not complied with, as held by the Tribunal in the case of R.K. Industries v. C.C.E. reported in 1989 (39) E.L.T. 316. However, the present case is not one of non -compliance with any condition under which the goods were permitted to be imported. Rather, it is a case where goods had been duly cleared, and at the time of clearance, the Customs authorities are required to know whether the import was covered under OGL or a specific licence was required or whether the import could be made under additional licence. It is not the case of the Department that the importers violated any post importation conditions. Once the goods had been cleared under an order passed under Section 47 of the Customs Act, 1962, such order can reviewed only when fraud or suppression or misdeclaration is detected by the Customs authorities, as held by the Hon'ble Delhi High Court in the case of Jain Shudh Vanaspati v. Union of India reported in 1982 (10) E.L.T. 43 (Del). In the case before us, significantly the Department has not alleged any one of the above mentioned 3 ingredients. Therefore, we agree with the adjudicating authority that the 65 second -hand machines seized from Wazirpur Industrial Area are not liable to confiscation and reject this gound of the appeal. Point No. 2 Quantum of RF and Penalty The finding of the adjudicating authority on this point is contained in para 34 of this order which is reproduced below :