Judgment:
1. This appeal arises out of and is directed against the Order-in-Appeal No. S/49-7/82SIIB, dated 3-1-1983 passed by the Collector of Customs (Appeals), Bombbay. The brief facts necessary for the disposal of this appeal are: The appellants imported 80 pieces of Crank Shaft valued at Rs. 53,659.76 c.i.f. and sought clearance under O.G.L.' under Appx. 10 Item 58(4) of the Policy A.M. 1982. The Customs, however, objected to the clearance on the ground that the Crank Shaft imported are not new but they are old and used.
2. In the adjudication held by the Deputy Collector, he ordered confiscation but allowed redemption on payment of fine of Rs. 1,30,000/-. Being aggrieved by this order, the appellants preferred an appeal before the Collector (Appeals) unsuccessfully. Hence this appeal.
3. During the hearing of this appeal, Shri Balani made the following submissions : The Deputy Collector committed an error in holding that the goods are old and used and not new goods. The initial burden of establishing that the imported goods are old and used lies on the Department. This burden was sought to be discharged by relying on the examination report as well as on the statement of the proprietor of the appellant firm. Shri Balani contended that by visual examination it would be physically impossible to hold that the goods are new or old or used. In this connection, Shri Balani placed reliance on the two decisions of the Tribunal (1) reported in 1983 ECR 1486, D and (2) 1988 (14) ECR 242 CEGAT. Shri Balani further submitted that the statement of the proprietor is not a voluntary statement. Even that statement is based on the visual examination and the appellant himself cannot by visual examination state whether it is old or used or new. And therefore no reliance should have been placed on the appellant's so-called admission. Relying on the decision of the Tribunal reported in 1987 (30) ELT page 493, Shri Balani contended that despite the appellants' proprietor's admission if the evidence disclosed that the goods are not old or used relief can be granted. It was also contended by Shri Balani that the adjudicating authority had relied upon the invoice value; that invoice value permits to new goods and therefore the finding that it is old and used was erroneous. If the Department's contentions that the goods imported are old and used then the invoice value could not have been taken. Shri Balani cited the two decisions of this Tribunal which laid down the method of valuation of second-hand machinery 1985 (21) ELT 140 (Tribunal); . The further submission of Shri Balani was that Section 5 of the Customs Act empowered the Collector to limit the powers of the Officers of the Customs. The Board, I in exercise of that Section, had limited the power of the Deputy Collector to impose fine upto Rs. one lakh only and therefore the Deputy Collector's order imposing a fine of Rs. 1,30,000/- is beyond the powers conferred on him and therefore it is without jurisdiction. It was also the contention of Shri Balani that there was no evidence as to the market price of the imported goods. In the absence of the evidence, the Deputy Collector was not justified in imposing a fine of Rs. 1,30,000/-. The further submission of Shri Balani was that eventhough the Section 125 authorises imposition of fine equivalent to the market price less the duty in the case of imported goods it was not obligatory for the adjudicating authority to impose a maximum fine. It is then contended by Shri Balani that according to the finding of the Deputy Collector, there was no mala fide on the part of the appellant. If there had been no mala fide then the confiscation under Section 111 (m) is bad in law. In this connection, Shri Balani placed reliance on the decision of the Tribunal reported in 1988 (14) ECR page 87 CEGAT. Shri Balani submitted that along with their appeal memorandum some proof had been produced as to the price at which the imported goods were sold. In that connection, he referred to pages 17 to 20 of the Paper Book.
4. Shri Prabhu appearing for the Collector supported the order passed by the authorities below. He contended that under the Imports & Exports (Control) Order, the goods to be imported should be new goods and this would be a condition of all the licences. The examination as well as the admission of the appellant establish that goods imported were old and used. The Deputy Collector was therefore justified in ordering confiscation for mis-declaration of the goods and also for violation of I.T.C. Regulation. Shri Prabhu further submitted that the power of adjudication of the Customs Officers are found in Section 122. It does not speak of fine but only speaks about the value. Therefore, the Board's order relied upon by the other side could at best be administrative order and on that ground the Daputy Collector's order would not become invalid. As regards the market price, Shri Prabhu submitted that the appellants themselves have produced proof regarding the market price and even If their price is taken the fine imposed Is not excessive. Shri Prabhu wanted to refer to the market enquiry made by the Department found in the file of Collector (Appeals). Since the Department had not produced the particulars either at the adjudication stage or at the appellate, stage we did not allow Shri Prabhu to submit those things.
5. We have carefully, considered the submissions made oh both the sides and perused the available records. The two points that arise for our consideration are whether the order of confiscation is bad in law and not justified on the facts and in the circumstances of the case and (2). Whether the fine in lieu of confiscation is excessive or harsh.
6. It is not the contention of the appellants that the relevant Policy permitted imported of second hand or old and used goods under OGL From the statement of the proprietor of the appellants, it transpires that the order was placed for import of new goods. But then what actually imported was not new goods but used. Shri Balani had contended that the initial burden is on the Department to establish that the imported goods were second hand or old and used goods and this burden has not been discharged. We are unable to accept this contention of Shri Balani. Under Section 17 of the Customs Act imported goods are required to be examined and as in other cases the examination took place in this case also. On examination, the goods were found to be used and old. The ' examination is normally done in the presence of the party or his agent. It is not contended before us that the examination was behind the back of the party. From the submission of Shri Balani it is than that the admission of the proprietor of the appellants was also on the basis of the examination. This implies that he was present at the time of examination. Shri Balani had contended that the visual examination would not be sufficient to positively come to the conclusion that the goods are old or used. He had urged that no technical expert had examined the goods. No instrument had been employed for examination.
But then what was overlooked by Shri Balani was that the proprietor was a trader in the automobile parts. He would be in a better position to know whether the goods are new or old. If on examination the proprietor had come to the conclusion that they are old and used, considerable weight will have to be attached to his observations. Customs examination is also not done by illiterate persons. The Examiners who have been doing that job for a long period would have acquired some skill sufficient to state whether the goods are old or new. It was not the observations of the Examiners that the goods looked new or 'appears new'. The positive report was that they are old and used. Therefore, the two decisions on which Shri Balani placed reliance, namely, 1983, 1486 D, 1988 (14) ECR 242 are distinguishable on facts. The further contention of Shri Balani that the proprietors' statement is not voluntary is rather difficult to accept. It is not clear what compelled him to make such admission. It was not alleged that there was coercion or inducement or promise. We, therefore, unhesitatingly reject Shri Balani's contention that the proprietors statement is not voluntary.
Shri Balani's contention that since the Customs had accepted the invoice value the goods should be considered as new goods in our opinion amounts to begging the question. It is one thing to state that the Customs ought not to have accepted the invoice value for the purpose of levying duty or for determination of the value of the imported goods. It is altogether a different thing to state that the goods are not new but old and used.
7. It is necessary to point out that if the proprietor had objected to the examination done by the Customs authorities there would have been an occasion for the Department to get an expert opinion. In view of the admission of the appellant's proprietor the necessity to got the goods examined by an expert did not arise. Under law, the importer himself could lead evidence to establish that the goods imported are not old and used but are new. Not only no objection was taken for the examination done by the Customs the proprietor admitted the examination and in any case did not lead any evidence to establish that the goods are not old and used. On consideration of all the evidence, we are satis-fled that the Deputy Collector was justified in holding that the goods are not new but are old and used. In view of the declaration as to the description that the goods were new, there was clear violation of the provisions of Clause (m) of Section 111. There is also violation of Clause (d) of Section 111 since the Import Control Order did not permit import of second hand goods without specific licence. We, therefore, uphold the order of confiscation both under Section 111 (m) and Section ,111 (d) of the Customs Act. Shri Balani's contention that there was no finding of mala fide by the Deputy Collector and therefore the confiscation under Section 111 (m) is bad has no force. The Deputy Collector had held that the allegation in the show cause notice that the goods imported are secondhand' old and used and therefore there is a material mis-declaration had been established. Just because the Deputy Collector did not state that there was no mala fide on the part of the appellant, his order of confiscation under Section 111 (m) would not become bad in law. The decision relied on by Shri Balani, namely 1988 (14) ECR has no application to the facts of the present case. In that case the Tribunal found that there was no finding at all as to the mis-declaration.
8. Coming to the contention of Shri Balani that the order of the Deputy Collector is without jurisdiction, suffice to say that the document relied on by Shri Balani does not purport to be an order made by the Board under Section 5 of the Customs Act. As a matter of fact, the appellants themselves have stated in their memo before the Collector of Customs (Appeals) that the Board's directions is an administrative direction. An administrative direction cannot override the statutory provisions. Under Section 122 of the Customs Act the powers of the Deputy Collector to adjudge confiscation and penalty is unlimited. The value restriction is applicable only to the officers lower in rank than the Deputy Collector. Further, that Section does not even contemplate of fine. It only speaks about value of the goods for the purpose of confiscation and penalty. The Board by administrative order cannot override this statutory provision. Further, Section 122 is not subject to Section 5. Even if the Board had the power under Section 5 the said power cannot be exercised in violation of the statutory power conferred under Section 122. We, therefore, reject Shri Balani's contention that the Deputy Collector's order is without jurisdiction.
9. Coming to the last of the contentions namely, that the fine levied is excessive and harsh, suffice it to say that after the Deputy Collector passed the order, the appellant had an opportunity to place before the Collector of Customs (Appeals) and before us the market price of the imported goods. Shri Balani submitted that cash memos of the sale of the crank shafts were produced before the Collector of Customs (Appeals) and they formed part of the appeal memo also. From the cash memo we see that in the month of September, 1982 each Crank Shaft was sold for Rs. 2000/-. The total market price of the 80 crank shaft comes to Rs. 1,60,000/-. Shri Baiani submitted that duty paid was Rs. 53,953/. If the cash memo were alone taken into consideration then it could be said that the fine is little more than the market price, since duty on the imported goods is liable to be deducted. But for reasons best known to the appellant even upto this date he had not produced the cash memos under which he sold the remaining 76 crank shafts. Further, the market price to be taken into consideration is about the time of importation and not three or four months thereafter.
The appellant had an opportunity to adduce evidence as to the market price; they did not wish to do so. According to Shri Prabhu before levying the fine market enquiry had been made. Since two authorities have concurrently come to the conclusion that the fine levied does not exceed market price less duty we will not be justified in interfering in the quantum of fine particularly in view of the absence of precise evidence regarding the market price. It is true that there is no legal obligation on the part of the adjudicating authority to impose fine equivalent to market price. But then, in the case of unauthorised imports importer cannot be allowed to make profit out of his illegal transaction.
10. In the result and for the reasons stated above, this appeal falls and the same is rejected.