ORDER
Jeet Ram Kait, Member (T)
1. All these ten appeals are directed against a common Order-in-Appeal No. Cal/Cus 15 to 24/2003 dated 11.2.2003 passed by the Commissioner of Customs (Appeals) Kolkata by which he has set aside the orders in original passed by the Joint Commissioner of Customs, Group-VB, Kolkota and the Commissioner (Appeals) has directed initiation of proceedings against them for recovery of short levied duty and for levy of appropriate fine and imposition of penalty after taking the value of photocopier machines as a whole instead of the value of components parts as taken by the original authority.
2. The brief facts of the case are that in December 2002 the appellants herein imported through the Kolkata Port consignments of old and used components of photocopiers alongwith new spares, in some cases. Except in respect of one consignment imported under Bill of Entry No. 156609 dated 30.12.2002 by appellants Ma Sherawali Impex, all other consignments comprised of functional, assemblies, i.e old and used components of photocopiers (also known as main frame). The components under the above-noted Bill of Entry No. 156609 imported by Ma Sherawali Impex comprised only of top panel covers, right covers, control panels, etc, all old and used components of photocopiers alongwith some new spares. The appellants have furnished the details of the goods imported in each consignment in the Annexures A and B filed in the respective paper books. Bills of entry were filed by the respective importers-appellants and the goods were examined by the proper officer in the presence of the Assistant Commissioner/Deputy Commissioner and the Govt. approved Chartered Engineer who issued certificates in regard to condition of the goods and their value. The proper officer thereafter passed an order directing examination of the whole goods i.e. 100% in the presence of the Customs Officers and the certificate issued by the Chartered Engineer was duly accepted by the Examining officer. Proceedings were thereafter initiated by the Customs authorities on the allegation of under-valuation of the goods and also that the goods were not imported under import licence and the proceedings culminated in the respective orders of adjudication passed by the original authority ordering enhancement of the value and confiscating the goods with option to redeem the same besides imposition of penalty on all the appellants. The appellants waived the requirement of issue of show cause notice as they required the imported consignments urgently. Accordingly the appellants in all cases except in the case of the Bill of Entry No. 156609 dated 30′.12.2002 (Appeal No. C(DM)-49/2003 – filed by Sherawali Impex) paid the Customs duty, redemption fine and penalties as demanded/imposed by the respective orders in original. However, the goods were not released even though duty, fine and penalty were paid, as the DRI intervened in the case and taken away all the documents and orally directed the non-release of the goods. Thereupon the appellants had to move the Hon’ble High Court of Kolkata by W.P. Nos. 87 to 92/2003 and W.P, No. 106/2003 and the WPs were disposed of by the Hon’ble High Court by order dated 21.1.2003 directing the Customs authorities to release the goods unless there was any order not to release the goods by appellate authority. Thereafter, on direction issued by the Commissioner of Customs dated 22.1.2003, the original authority viz. the Joint Commissioner filed appeal before the Commissioner (Appeals) against his own orders and after hearing the appellants, the Commissioner (Appeals) by a common order set aside the orders of adjudication passed by the original authority and directed initiation of proceedings against the appellants for recovery of duty allegedly short levied and also for demand of redemption fine and imposition of penalty. Aggrieved by the said Order-in-Appeal the appellants have come in appeal.
3. Dr. Samir Chakraborty, learned Counsel accompanied by Shri Hashmukh Kandalia, learned Counsel assailed the impugned order on the ground that the alleged under-valuation of the goods was based on non-existent original invoice allegedly recovered from some other person on certain unspecified date. No particulars of the same were furnished either in the orders passed under Section 129D(2) by the Commissioner of Customs or in the appeal petitions. Dr. Samir Chakraborty, Advocate invited our attention to the Examination report of the goods by the Customs authorities which has been filed as Annexure C in the Appeal papers of Appeal No. CDM 48/2003 (in the case of Sherawali Impex) wherein the following remarks have been made by the authorities:
(a) The goods have been found to be old and used.
(b) Year of manufacture of machines have not been found.
(c) In the absence of catalogue/price list it is not possible to determine the value of the goods at this end. However, Chartered Engineers Certificate signed by us may please be seen. Goods detained till further orders from Group:
He has also invited our attention to Annexure D in the paper book of (Appeal No. COM 48 / 2003) evidencing payment of an amount of Rs. 1,73,322 on account of customs duty, fine and penalty. He has also invited our attention to the order in original dated 14.1.2003 in the case of Appeal No. CDM-48/2003 wherein the original authority had clearly mentioned that the goods imported are old and used component of Photocopier and the same should be covered by para 2.17 of the EXIM POLICY, Hand Book of Procedure (Vol I) and by holding so, the original authority had confiscated the goods with option to redeem the same on payment of fine apart from duty payable and imposition of penalty and the appellants have paid all the amounts. He has submitted that the value declared by the appellants have been accepted by the Customs authorities. He has also invited our attention to page 60 of the paper book in the case of Appeal No. CDM-48 / 2003, wherein copy of the Review order passed by the Commissioner under Section 129D(2) of the Customs Act has been filed. He has in particular referred to para 6 thereof wherein inter alia it is stated that, “the said machines were complete in all respects but for the top, side and front plastic panels, top glass, plastic feeder trays and control panels”. He has submitted that further the Commissioner in the same review order has stated that certain documents of the US based supplier have been recovered on search of the premises of the persons suspected to be behind the import in the name of importer M/s Ma Sherawali Impex. But no particulars of the invoice have been provided to the appellants nor the details of the persons whose premises were stated to have been searched have been provided to the appellants. It is therefore, clear that the Commissioner has proceeded to order review of the order in original based on no evidence. The learned Counsel also relied upon the following case laws in support of his plea for allowing the appeals:
(a) Senior Magnetics Ltd. v. CC, 1992 (62) ELT 2377 (T) wherein the Tribunal following the decisions of the Hon’ble Supreme Court and the High Court referred to therein has held that initiation of proceedings under Section 129D(2) of the Act cannot be made on the basis of documents which admittedly did not form part of the record of the original proceedings and came to the possession of the department later and this decision was followed in the case of CC v. DKR Traders, 1997 (96) ELT 579.
(b) Durga Marketing v. CC, 2002 (139) ELT 107 (T) wherein it is held that domestic market price cannot form the basis of determination of assessable value for the purpose of levy of customs duty under the Act.
(c) Award Electronics v. CC Chennai, 2003 (85) ECC 773 (T): 2003 (85) ECR 737 (T) wherein it was held that value of complete sets i.e. video cameras and Handicam video camera of Sony Brand cannot be taken for the parts. It was also held therein that Revenue cannot take the full value of the full video camera and since there was no mis-declaration, as the part of sub-assembly were fully disclosed in the respective bills of entry the goods cannot be confiscated under Section 111(m) of the Customs Act, 1962.
(d) Sony India ltd v. CC, New Delhi, 2002 (82) ECC 436 (Trt-LB): 2002 (143) ELT 411 (Tri-LB). In this case components of CTV were brought un-assembled for packing, handling and transporting. It was noted by the Larger Bench that manufacture of colour TV involves complex process. In the circumstances it was held that components were not to be treated as complete CTV either before or after amendment of Rule 2(a) of Interpretative Rules. In holding so the Larger Bench has relied
upon a large number of judgments of the Hon’ble Supreme Court and of the
Tribunal.
Similar arguments have been advanced by the learned Counsels in respect of the other appeals also and submitted that the Order-in-Appeal is factually wrong and he prayed for setting aside the same.
4. Shri Biswajeet Mukherjee, learned Advocate appearing for the Revenue on the other hand submitted that the appellants have imported 10 consignments of photocopier and declared them as old and used components of photocopier and on examination it was found that the photocopiers are almost complete and were more than five years old. He has also referred to para 14 of the judgment in the case of Sony India Ltd. v. CC, New Delhi (supra) wherein there is a finding that in none of the Bill of Entry there were all the components required for the manufacture of Colour TV, whereas in the present case, in respect of the importations made by appellants M/s Tushar Impex vide Bill of Entry No. 156088 dated 19.12.2002 and importations made by M/s Navpad Impex vide Bill of Entry No. 156187 dated 20.12,2002, and by M/s Vijay Traders vide Bill of Entry No. 156608 dated 30.12.2002, were complete machines and not parts and components while the importation covered by all other Bills of entry, the machines were almost complete and cannot be considered as components for photocopier and he prayed for upholding the order impugned.
5. We have carefully considered the rival submissions and gone through the case records including the orders-in-original and the Order- in-Appeal and have also perused the case laws relied upon by the defence. The issues that arise for determination in all these appeals whether the impugned goods are classifiable as complete photo-copier machines falling under heading 9009.12 as held by the appellate authority or under sub-heading 9009.99 as components of photocopier as claimed by the appellants, and whether there was any mis-declaration with regard to value or the quantum of the goods imported. We observe that in all these cases the appellants herein have imported components of photocopying machines under different bills of entry and all the consignments were physically examined by the proper officer in the presence of the Chartered Engineer who have issued certificates of examination after inspection of the goods. The certificates clearly states the condition of the goods and further states that the goods imported are old and used items of components of photocopiers and are in good condition having residual life approximately of five years on normal maintenance. In all these cases, a higher value has been assessed by the Chartered Engineers as against the lower value declared by the appellants. The certificates rendered by the Chartered Engineers were also accepted by the Examining Officer. We further observe that in all these cases, the original authority has noted that the importers have grossly undervalued the goods and he has enhanced the value accordingly though without any discussion/Since the appellants have contravened the provisions of the EXIM policy in importing the goods without a licence, the original authority had ordered confiscation of the goods with option to redeem the same on payment of fine, besides imposition of penalty. We observe that the gravamen of the Department is that the importers have imported “almost complete photocopiers” under the guise of components. Examining this question, we observe that in, all these cases, as noted above, the Chartered Engineers have certified that what was imported was components of photocopiers and not complete photocopiers. There is certainly difference between what is known as “almost complete photocopiers” and “complete photocopiers”. It is common knowledge that when photocopier is ”almost complete” it implies that certain parts are required for them to become complete and unless the photocopiers are complete in all respects, it cannot be said that it is fully functional. We further observe that the Commissioner (Appeals) in the impugned order has referred to the searches conducted by the DRT which revealed that original invoice from USA supplier to Singapore showed complete machines at a higher value. What is to be seen is whether importers have imported the photocopiers in full or components irrespective of what was covered by the invoice of the supplier at USA to the Singapore intermediary. Neither the particulars of the invoice nor the verified ion report relied upon by the lower appellate authority were furnished to the appellants with a view to giving them a chance to rebut the same, particularly when a finding is reached against them which is against the principles of natural justice. We further observe that it is not the case of the department that there was any mis-declaration with regard to the quantities and the number of items imported. The learned Counsels for the appellants have argued that for a photocopier to become functional the activities such as fixing clothe assembly unit, feeding assembly, functional gears, drum unit, developer unit, motor, Clutch lens assembly with six mirror assembly etc. have to be undertaken and after that all the unit has to be thoroughly cleaned with petrol/K.oil and the damaged parts if any have to be replaced. He has also pleaded that items such as Control panel, top panel cover, top glass, front cover, right cover, left cover, top flat/ADF/top cover Bypass tray, apart from other miscellaneous items like screws, washers, circlips etc. are also required to make a photocopier complete and functional. The Revenue has not controverted this position. Further, it is also an admitted position by the Revenue itself that except in the case of import covered by three Bills of entry, the goods were only “almost complete” photocopiers. In these three cases also, (BE No. 156088 dt 19.12.2002, Mill of Entry No. 15687 dt. 20.12.1987 and Bill of Entry No: 156608 dt. 30.12.2002) the Bills of entry and the Chartered Engineer’s certificates show that what was imported was old and used components of photocopiers. Therefore, in the face of the Examination report of the proper officer coupled with the certificates rendered by the Chartered Engineers and the submissions made by the learned Advocates for the appellants bringing out the difference between ‘complete copiers’ and ‘almost complete photocopiers’, we hold that what was imported was parts/components of old and used photocopiers and they are classifiable under sub-heading 9009.99 and not under 9009.12 as complete photocopier. In arriving at this conclusion we find support from the judgment of the Larger Bench in the case of Sony India Ltd v. CC, ICD, New Delhi, 2002 (82) ECC 436 (Tri-LB) : 2002 (143) ELT 411 (Tri-LB) wherein it was held that components of Colour TV cannot be treated as complete CTV. It was also held therein that components of colour TV brought under different consignments over period of time cannot be clubbed as to consider them complete TV sets. We also take note of the judgment rendered by the South Zonal Bench in the case of Award Electronics v. CC, Chennal, 2003 (85) ECC 737 (T) : 2003 (85) ECR 737 by relying upon the Larger “Bench decision in the case of Sony India Ltd. v. CC, ICD, New Delhi (supra) wherein it was held that the Revenue cannot take full value of the cameras, for the parts, of cameras imported.
6. In view-of our discussion and findings, we are of the considered opinion that there is no material to sustain the order impugned and we set aside the same and allow the appeals with consequential relief if any. Before parting with this case, we would like to however, observe that the DRI authorities have excessively interfered in the whole ease in not allowing the small importers to get their, goods released in spite of the fact that they had paid the whole amount of fine and penalty as adjudged by the adjudicating authority. It was a different matter if the importers had not paid the amounts as adjudged. In view of this we direct the Customs authorities to release the goods without any further delay, if not already done.