Judgment:
1. The appellant is a manufacturer of yarn and imported a consignment of second hand (used) Ring Spinning frames with auto doffer Winding machine at Ludhiana in June, 2003 and filed Bill of Entry No. 650, dated 4-8-2003 for clearances of these machines. The declared value of consignment was about Rs. 1.35 crores. The machine was also declared as less than 10 years old. The appellants also produced Chartered Engineer's Certificate dated June 30, 2003 in support of the declaration that the goods were less than 10 years old.2. The Customs authorities got the consignment examined by two Chartered Engineers who expressed the opinion that most of the items were more than 10 years old. The customs authorities thereupon called upon the appellants to explain as to why the goods should not be confiscated since they were more than 10 years old and the import of more than 10 years old machine is restricted under Para 2.7 of the Import and Export Policy. The appellants contested the charge but failed. Under adjudication order dated 17-9-2003, the Commissioner of Customs, Amritsar confiscated the consignment under Sub-sections (d) and (m) of Section 111 of the Customs Act, 1962. He, however, allowed the redemption of the goods on payment of a fine of Rs. 15 lakhs and penalty of Rs. 2 lakhs. The present appeal is against those orders.
3. The contention of the appellant is that the machinery imported by it were actually less than 10 years old and the evidence produced by the appellant about the age of the import should be accepted. It is also pointed out that the finding that the machinery was mere 10 years old is not sound inasmuch as it is based on the marking of earlier years on electrical items forming part of the machinery. It is also submitted that, in any event, the appellant was not at fault since it had specifically ordered goods which were less than 10 years old and the machinery was also accompanied by Chartered Engineer's certificate giving full particulars of the machinery showing that they were indeed less than 10 years old. During the hearing of the case, the learned Counsel for the appellant also pointed out that the appellant is a major exporter (Rs. 450 crores annual) and therefore, could have easily obtained a license in case it knew that the machinery under supply was actually more than 10 years old. It is the learned Counsel's submission that import of machines older than 10 years is permissible under a licence. If at all, it is a case of appellant's supplier sending machines which are older than ordered by the appellant.
4. The SDR has submitted that this is clearly a case where very old machines were being imported in the guise of less than 10 years old machines. It is submitted that there is an effort to cover up inasmuch as, the machines are found to be affixed with new specification plates showing year of manufacture as less than 10 years old. New specification plates have been specifically found pasted over old specification plates. He has also pointed out that many major components such as the transformers electrical motors and cables and control boxes were found to bear year of manufacture as 1985, 1986, 1990, 1991 in respect of some machines. The learned DR also defended the finding of the experts.
5. We have perused the records and considered the submissions made by both the sides. We find that the appellant had informed their supplier in their letter dated 8-5-2003 "that the machine should not be older than 10 years as per Exim Policy of India". The machines in question were also accompanied by Chartered Engineer Certificate dated 30th June, 2003 issued by Miyazaki Kosetsu Ltd. The Certificate gives very detailed particulars of the machines imported like year of manufacture, name of manufacturer, etc. We reproduce the relevant portion of the certificate :- 1-27, Kaamezakihigashi, Hyuga City, Miyazaki-Pref, Japan CHARTERED ENGINEER'S CERTIFICATETo whom it may concern June 30, 2003Dear Sirs,4.
Address of Manufacturer : 2 00 Fukudeme-Machi, Matto, LshikawaNo. Year manufacture323, 324, 377 1994 4. Address of Manufacturer : Takeda Mukaisluro-cho, Fushimi-ku Kyoto No. Year manufactured 94SX330780-001 to 005 1994 Drawn under documentary credit No. 5843133001 dated May 20, 2003 issued by Citi Bank NA, New Delhi-India 6. In view of the above particulars, the appellant is right in its submission that it had taken all care to see that its import was in order. It had not ordered goods which were more than ten years old.Further, it was assured about the age of the machines through certificates issued by Chartered Engineers. Investigation has not brought out any material to challenge the correctness of the statements relating to Sl. Number, year of manufacture, etc. made in the chartered engineer's certificate. The adjudication order is based on visual examination of the machinery and years marked on electrical parts.
Further, machinery itself bore specification plates indicating manufacture within ten years of import, though these have been rejected on the ground that they are new plates. The year of manufacture marked on the electrical parts cannot be proof of the age of the machinery.
The particulars about the machine as entered on the specification plates affixed on it.
7. In view of what has been stated above, we are of the view that the evidence in the present case is not sufficient to reach a finding that the machinery under import were more than ten years old. We therefore, hold that the impugned order is not sustainable. Accordingly, it is set aside and the appeal is allowed. The goods shall be re-assessed at their declared value and excess duty, redemption fine and penalty, if any, paid by the appellants, shall be returned to it.