Commissioner Of Customs, Bangalore vs M G Copiers

P. A. Augustian, Member (J)

This appeal is filed by the Revenue challenging the impugned order issued by First Appellate Authority, whereby First Appellate Authority partially allowed the appeal. Aggrieved by the impugned order, cross objection is filed by the respondent also.

Brief fact of the case is that the respondent had imported 128 units of used Multifunction machines and filed Bill of Entry No. 2881961 dt. 17.08.2017 declaring the value as USD 26795 equivalent to Rs.17,66,566/-. Goods were subjected to examination by DGFT approved Chartered Engineer and vide report dated 23.10.2017, the Charted Engineer assessed the value of the goods as Rs.21,98,071/-. Alleging violation of various provisions of law, the Adjudication Authority issued the order on 17.01.2020, whereby ordered absolute confiscation of the goods. For the alleged violation, the Adjudication Authority imposed penalty of Rs.21,98,071/- under section 112(a)(i) of the Customs Act, 1962. Aggrieved by the said order, the respondent filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide impugned order dated 25.08.2021 held that goods are not liable for absolute confiscation and remanded the matter by allowing redemption of goods on payment of appropriate customs duties, redemption fine and penalty.

Learned A.R. for the Revenue reiterated finding in order-in original, the grounds of appeal and also submitted that the impugned order is issued by remanding the matter to original authority on payment of appropriate customs duties, redemption fine and penalty as affirmed by importer/Respondent during hearing. Since there is no direction to quantify fine and penalty direction/order in the impugned order cannot be implemented.

Learned counsel appearing on behalf of the respondent submitted that the import of used digital multifunction machines were subject matter in large number of cases including the case law referred by the Appellate Authority. Since the issue regarding confiscation of the goods is settled by the judgment of the Supreme Court in the case of Commissioner of Customs vs M/s Atul Automation Pvt Ltd dated 24.01.2019, goods are not liable for absolute confiscation. Regarding quantum of fine and penalty, learned counsel drew my attention to various decisions of this Tribunal in similar cases and held that in the absence of any finding regarding the market value of the goods, in similar cases, the goods are being released subject to payment of redemption fine of 10% and penalty of 5% on enhanced assessable value. It is further submitted that, in view of the findings given by the Appellate Authority and this Tribunal in similar cases, the impugned order of remand made by the learned Commissioner (Appeals) without specified the fine and penalty is unsustainable. Further submitted that inspite of specific finding from various appellate forums, there was undue delay of more than 06 years in releasing the goods. Hence respondent also prays for issuing a direction for waiver of detention/demurrage charge.

In response to the submission on remanding the issue for ascertaining the market value and to determine the redemption fine, Learned counsel for the respondent submitted that in the matter of M/s S.R. Enterprises this Tribunal considered the issue regarding import of very same goods against Bill of Entry No. 4620026 dated 30.12.2017 and vide Final order No. 21308-21309/2019 dated 20.12.2019, Tribunal remanded the matter for denovo adjudication directing adjudication authority to find out the market value of the goods and to quantify the redemption fine and penalty, aggrieved by the said order, the Revenue filed the appeal before Hon’ble High Court of Karnataka and only on dismissal of the departmental appeal, Adjudication Authority considered the issue for denovo adjudication. Though this Tribunal had issued specific direction to find out the market value of the goods, the Adjudication Authority issued an order imposing redemption fine equivalent to the value of the goods on the ground that the market value of such goods is not readily available and considered the re-determined assessable value as the market price of such goods. The appeal filed before the Commissioner (Appeals) was also dismissed and importer was forced to file appeal before this Tribunal by filing Customs Appeal No. 20350 of 2021. This Tribunal vide Final Order No. 20762-20763/2021 dated 23.09.2021 considered the appeal on merits and following the decision of the Tribunal in similar cases, allowed the assessee to redeem the goods on payment of redemption fine of 10% on the enhanced value and penalty also reduced to 5% of the enhanced value. The learned counsel further submits that the issue attained finality only after more than 06 years and the importer had suffered huge losses due to undue delay in clearing the goods due to such remand order. Learned counsel further submits that in the absence of any finding regarding market value of the goods in the impugned order, the ratio of the judgment of the Hon’ble High Court of Kerala in the matter of Commissioner of Customs, Cochin Vs Office Devices - 2009 (240) E.L.T. 336 (Ker.) is squarely applicable in this case.

Learned counsel for the respondent also submitted that on very same issue, in the matters of M/s Photofax Systems vs. CC, Bangalore vide Final Order No. 20728/2023 dt. 24.07.2023 and M/s City Office Equipment vs. CC, Bangalore vide Final Order No. 20729/2023 dt. 24.07.2023, this Tribunal partially allowed the appeal and reduced the fine and penalty to 10% and 5% of the assessable value.

I have gone through the facts and submissions made by the Learned AR and the counsel for the Respondent. The Original Authority had re-determined the assessable value of 128 units of used Digital Multifunction Printing and Copying Machine (MFDs) as Rs. 21,98,071/-. It is also held that goods are liable for absolute confiscation and imposed penalty equivalent to the value of mported goods. The Commissioner (Appeals) in the impugned order had held that the goods are not liable for absolute confiscation but only issued an order for release of goods on payment of duty, redemption fine and penalty as affirmed by the respondent. Both the Revenue and the Respondent are challenging the impugned order on the ground that the Commissioner (Appeals) has not quantified the amount of fine and penalty and due to that reason, order cannot be implemented by the original authority. The Respondent accepted the enhanced value as per the Chartered Engineer’s certificate. There is no challenge to order of confiscation also.

It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. Considering lack of indigenous facility for manufacturing Multi Function Machines, lenient view is taken on such import and imported used MFD are released on payment of redemption fine of 10% & penalty of 5%. From the Final Order No. 20844/2020 dated 15.12.2020 in the case of M/s Accord Digitech Vs C.C. Bangalore passed by this Tribunal, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of the enhanced value of the imported goods. This was also followed by this Bench in the case of M/s S.R. Enterprises Vs Commissioner of Customs, Bangalore vide Final Order No. 20762-20763/2021 dated 23.09.2021 wherein the redemption fine and penalty was 10% and 5% of the enhanced assessable value. The ratio of the judgment of the Hon’ble High Court of Kerala in the matter of Commissioner of Customs, Cochin Vs Office Devices (Supra) is also squarely applicable in this case.

Keeping in view of the above decisions and considering the fact that the Department has also accepted the same in the case of M/s Accord Digitech Vs C.C. Bangalore (Supra), I am of the opinion that since 06 years have already been lapsed, in the interest of justice, Revenue’s appeal and cross objection filed by the respondent are disposed directing the Revenue to release the goods on payment of custom duty on enhanced value of Rs.21,98,071/-, redemption fine of 10% of the enhanced value and penalty of 5% of the enhanced value. Respondent is allowed to redeem the goods for home consumption in above terms.