Full Judgment
The appellant satisfied the condition in the import policy permitting only actual users to permit such second had machine, being engaged in machining and fabrication of metals. The officers of the Directorate of Revenue Intelligence being in possession of some information received on 18.11.1998 seized this machine which was in the premises of Perfect Forging & Fabricators, Mumbai (hereinafter referred to as Perfect).
After investigation that has been spread over a period of three years, the statement of Gurmeet Singh, partner of Perfect was recorded on 27.12.200, it issued a notice to the importer and perfect proposing confiscation of the machine under Clause (o) of Section 111 of the Act, and penalties on both importer and other party. The basis in the notice was that, since the machine had not even been used in the premises of the importer, and was installed after its import in the premises of Perfect. After considering the cause shown by both parties, the Commissioner passed orders confiscating the machine valued at Rs. 15.5 lakhs and permitting to be redeemed it on payment of Rs. 4 lakhs and imposing a penalty each under Section 112 of the Act of Rs. 1 lakh on the importer, Perfect and Gurmeet Singh, partner of Perfect. Hence these appeals.
2. We do not find it possible to accept the contention on behalf of the importer that the machine was installed in the premises of Perfect because it was found on import to be too large for use in their premises. It is boggles the imagination that a person who uses the machine in his work place an order for a second hand machine of a particular specification, pay for it, and having it imported only then discovers that it was too large to be fitted in the premises. The contention on behalf of the appellant is that there was no real intention to deviate the objective of the policy. It is pointed that Perfect itself was entitled to import the second hand machine since it was itself engaged in the machining and fabrication work and actually it sued that machine. It was that an actual user. It is further contended that penalty could not be imposed on Perfect and its partner as the same time.
3. The departmental representative no doubt emphasises various aspects of the matter to show that the machine could not have been used in the Premises of the appellant. In our view, however, the contravention is largely technical. It is clear that there was no legal barrier to the import by Perfect of the machine in question, since it qualifies to be an actual use. The conduct of the importer in diverting the machine to the premises of another actual user therefore has not resulted in any significant contravention of the policy and it has not resulted in loss of revenue to the Government which it otherwise could have been or either of the parties obtaining under benefit. In the light of these facts, we think that a substantial reduction in the penalties and fine are called for. After taking into account the fact that it is settled by the larger number of decision that penalty cannot be simultaneously imposed on a partnership firm and any one or more of its partners.
4. Accordingly, appeal C/7/03 of Gurmeet Singh is allowed. Fine for redemption of the machine is reduced from Rs. 4 lakhs to Rs. 1 lakhs, penalties imposed on the importer and Perfect reduced to Rs. 10,000/- each.