2000(01)LCX0234
IN THE CEGAT, COURT NO. II, NEW DELHI
S/Shri S.S. Kang, Member (J) and V.K. Agrawal, Member (T)
Final Order No. 127/2000-B, dated 27-1-2000 in Appeal No. C/1074/93-B
CASE CITED
Printwell Industries v. Commissioner — 1998(10)LCX0146 Eq 1999 (107) ELT 0252 (Tribunal) — Followed. [Paras 3, 4]
Advocated By : Shri Gopal Prasad, Advocate, for the Appellant.
Shri Jagdish Singh, JDR, for the Respondent.
[Order per : V.K. Agrawal, Member (T)]. - The issue involved in this appeal filed by M/s. Bradma of India Ltd., is whether the “Note & Document Counting Machine" imported by them is classifiable under sub-heading 8443.50 of the First Schedule to the Customs Tariff Act as other printing machinery as claimed by them, or under sub-heading 8472.90 as office machine, as confirmed by the Collector (Appeals) in the impugned order.
2. Shri Gopal Prasad, learned Advocate, submitted that the Appellants imported seven "Note and Document Counting Machines" on the strength of three REP licences which were classified by them under sub-heading 8443.50 as ‘other printing machinery’; that the Additional Commissioner, Customs, in the Adudication Order, dated 21-7-1992 confiscated the machine with an option to redeem the same on payment of fine of Rs. 7.50 lakhs imposed a penalty of Rs. 3,50,000/- holding that the machines in question are office machines as these are used in banks for counting notes; that according to ITC Policy, office machines are not permitted to be imported against the flexibility provisions of REP licences. The learned Counsel, further, submitted that accepting that the machine is considered to be an office machine, the Import was allowed; that provisions under para 204(1) of the 1990-93 Policy states that in the case of Export (other than those against registered contracts) made prior to 1-4-1990 the rate of import replenishment would be admissible on the date of export but subiect to the condition laid down in 1988-91 Policy Book; that the items of import and the flexibility allowed shall be those which were permissible on 31-3-1990 in the said Policy; that all the three licences were governed by this provision; that two of them specifically refer to items permissible in terms of the 1988-91 Policy. He also mentioned that Para 177(2) of 1988-91 Policy permits the import of capital goods except the capital goods included in Appendix 1, Part A, instrument included in Appendix 8 and 3 office machines as specified in Para 118 of the same policy ; that Para 118 specified 10 office machines and it would be those machines which would be not in terms of the flexibility provisions in Rule 177(2) of the Policy; that as Note counting machine was not specified in Para 118, it could be imported in terms of the flexibility provisions. Finally the learned Counsel submitted that as they were allowed clearance of such machine at Madras in terms of Para 177(2) (1) read with Para 118, there was no mala fide intention on their part and as such imposition of penalty and redemption fine is very harsh.
3. Countering the arguments Shri Jagdish Singh, learned D.R., submitted that the Appellate Tribunal, in the case of Printwell Industries v. C.C., Bombay, 1999 (107) E.L.T 252 (T) = 1999 (081) ECR 0355 (T) did not classify the vacumatic Paper Countring Machine under Heading 84.35 as "Other Printing Machinery; machinery for uses ancillary to printing” as it was not specially designed or exclusively designed to operate with Printing machinery. He, therefore, contended that the impugned goods cannot be classified under Sub-heading 8443.50 of the Tariff. Regarding Import Policy, the learned D.R. submitted that no doubt under the Flexibility Provisions, certain Capital goods could be imported against the REP licences; that, however, Para 118(7) of the Policy 1988-91, clearly provides that import of office machine cannot be made under the flexibility provisions; that Para 118(7) of the policy is not governed by Para 118(1) of the Policy; that as per Para 204(6) of Policy 1990-93, REP licences cannot be utilised for import of non-OGL capital goods. He finally submitted that as the total value of seven machines imported by them was Rs. 7,64,327, the amount of redemption fine and penalty is not on the higher side.
4. We have considered the submissions of both sides. Sub-heading 8443.50 of the Customs Tariff applies to "Other Printing Machinery”. As per adjudication Order, the impugned machineries were designed for counting currency notes and at best some documents and as such these machineries could not be considered as Printing Machines or as a machine designed to operate with Printing Machine. The machines are nothing but office Machines rightly classifiable under Sub-Heading 8472.90. This was the view of the Appellate Tribunal in Printwell Industries case, supra , and in written submissions given by the learned Counsel, it has been accepted that the machine is considered to be an office machine. We, therefore confirm the classification of impugned goods under sub-heading 8472.90 of C.T.A.
5. Para 118(1) of the Import Policy provides for import of specified office machines by he Registered Exporters. Para 118(7) of the Policy explicitly provides as under:
“Applications for import of office machines will not be entertained under the procedure for import of Capital Goods. Import of Office machines can not also be made under flexibility provisions."
6. In view of the clear provisions, the appellants were not eligible to import office machines under the flexibility provisions. There is no force in the submissions of the learned Counsel that the "Office machines" mentioned in sub-para (7) relate to ten office machines specified in sub-para (1). Sub-para (1) dealt with grant of licences to registered Exporter for importing office machines and they were allowed import of 10 specified office machines on fulfilment of certain conditions, Sub-para (7) of the Para 118 deals with the import of office machines as such under the procedure for import of capital goods & import of office machines under flexibility provisions. Accordingly we agree with the lower authorities that the import of the impugned goods was not permissible on the strength of REP licences . We, however, find that the amount of redemption fine i.e. Rs. 7.5 lakhs is on the higher side considering the value of impugned goods which is about Rs. 7.64 lakhs. Similarly imposition of Penalty of Rs. 3.5 lakhs is also on the higher side. Taking into consideration all the facts, we reduce the amount of redemption fine to Rs. 4 lakhs and penalty to Rs. 1 lakh. But for this modification, the appeal is rejected.
Equivalent 2000 (124) ELT 211 (Tribunal)
Equivalent 2000 (039) RLT 1053