Judgment:
1. The Appellants had imported 15 nos. of second hand Shuttleless Rapier Weaving Looms of type CERDANS PROPERLLER, Spanish Make. The year of manufacture of all machines was declared as 1994 in the Bill of Entry dt. 9.9.2003 and the machineries were imported through ICD Singanallur, Coimbatore. The above machines were supplied by M/s MAQUISATOR, Barcelona, Spain for a total value of
Rs. 57,56,655/- for the 15 looms. The goods were cleared on payment of duty and the machineries were installed in the factory premises of the appellant. Later, the Revenue department received information to the effect that the year of make of the machineries was much earlier and if the correct year of make was considered, the goods were restricted for import during the relevant time and the appellant had deliberately mis-declared the year of make of the machineries to avoid restrictions under import policy for importing old machines.
2. Revenue conducted detailed examination of the machine in the presence of Shri S. Chandrasekararan, General Manager of the appellant company and two independent witnesses. It was found that some name plates had the name reading LEY 17 JULIO1965 affixed on the machine with Sl.No.3843, 3733 etc. and model No.C.401-E, C.301-E etc. The details of the serial number and model numbers etc. in the name plates affixed on the machine were as follows :-
| S.No. | Machine No. | Model No. |
| 01 | 3843 | C401-E |
| 02 | 3733 | C301-E |
| 03 | 3865 | C401-E |
| 04 | 3862 | C401-E |
| 05 | 3866 | C401-E |
| 06 | 3863 | 3863 |
| 07 | 3735 | C301-E |
| 08 | 3845 | C401-E |
| 09 | 3734 | C301-E |
| 10 | 3736 | C301-E |
| 11 | 3841 | C401-E |
| 12 | 3844 | C401-E |
| 13 | 3864 | C401-E |
| 14 | 3842 | P190 |
| 15 | 2767 | P190 |
3. Further Revenue found from enquires serial number of the machines manufactured by the manufacturer had crossed 4000 in the year 1989 itself but theserial numbers found on the subject machines imported by the appellant were below 4000 and hence it was clear that said machines were manufactured prior to 1989 only. Further, M/s.Cerdans S.S.Narcelona, Spain had been taken over by M/s.Vamatex of Italy in 1990s and therefore goods could not have been manufactured in the name "Cerdans Propeller" in the year 1994 as declared by the importer.
4. Revenue confronted Shri S.Chandrasekaran with the above evidences, but he had no satisfactory explanation to give at the time of giving his statement on 26-03-04. Since during the relevant period, second hand capital goods which were more than 10 years old were restricted for import as per para 2.17of EXIM Policy read with para 2.33 of Handbook of Procedures, the department detained the goods and issued show cause notice as to why goods should not be confiscated under section 111 (d) and 111 (m) of the Customs Act, 1962 and penalty should not be imposed on the appellant under section 112 (a) of the Customs Act, 1962. On adjudication, the goods were confiscated under section 111 (d) and 111 (m) of the Customs Act,1962 and the appellants were given option to pay a fine of Rs.10 lakhs in lieu of confiscation under section 125 ibid. Further a penalty of Rs. 5 lakhs was imposed on M/s.Amarvathy Textiles, Karur under section 112 (a) of the Customs Act, 1962. Aggrieved by the order of the Commissioner, the appellants have filed this appeal.
5. The appellant submits that there is no evidence to conclude that year of make for the machines involved in present case were 1989 or earlier. The allegation has been made on the basis of certificate of the Chartered Engineer relating to goods imported by some other importer. The Chartered Engineer had not inspected the machinery involved in the present case and only a comparison of machine numbers of the impugned machinery with machinery imported by third party was madeand therefore the whole allegation is based on assumptions and presumptions.During cross-examination the chartered Engineer stated that that the takeover by VAMATEX was during the period 1990 to 1999 and therefore no firm conclusion can be drawn that no machines of CERDANS brand could have been manufactured during 1994. Further appellant submits that the department had not gathered any information from the manufacturer or supplier. The supplier has categorically stated that machineries involved in the present case were manufactured in the year in1994. It is further argued that there was no revenue loss involved in the import because Revenue has not made out any case regarding undervaluation. In the circumstances, it is submitted that penalty imposed is totally unwarranted. Appellant also points out that at the time of import of the machinery in question appellant had applied for license and subsequently, that is on 22-09-2003, appellants got license to import machineries manufactured in the year 1989. However, the same was not utilized for the reason that the supplier had declared in the invoice the year of make as 1994. Therefore, technically speaking appellant was having a valid license for the import of machinery in question.The Commissioner did not disputethe fact of obtaining the license for importing machineries of 1989 make. The Chartered Engineer has no authority to give opinion with regard to events taking place at foreign country and the reliance placed on the Chartered Engineer's certificate in this matter is not warranted. Further it was argued that the Chartered Engineers opinion that the company CERDANS was taken over by VAMATEX in 1990s does not bring out any clear contradiction because 1990s meaning the year 1990 to 1999. The exact year of takeover was not known to the Chartered Engineer or from any other source. So it is argued that the case is made out without any reliable evidence. Finally it is prayed that at best it is only a technical offence and therefore fine and penalty imposed is very high. His prayer is that confiscation may be set aside.
6. Opposing the prayer, Ld. AR for Revenue submits that while assessing the evidence the entire facts have to be seen together. The appellant had applied for import license for importing machines of 1989 make and even before such license was issued, the appellant mis-declared imported 15 machines and declared the year of make as 1994. Subsequently, the license issued for import of older machines was not utilized. It would so appear that appellant mis-declared the year of manufacture basically to circumvent the delay in obtaining the necessary license. Further, serial number of the machinery imported by another importer showing the year of make as 1990 and the serial numbers of 4000 for the same model is valid evidence though it is gathered from another importer. Further it is very relevant that when these evidences were presented to the General Manager, Shri S. Chandrasekar, he had no cogent explanation to give and he was only giving evasive replies indicating that this was a case of mis-declaration of year of make. Therefore, he submits that the Revenue has adduced enough circumstantial evidences and if all of them are put together and assessed the obvious conclusion is that the case made out by Revenue is correct.
7. I have considered submissions on both sides and evaluated the evidence available. The machineries in questions were not got examined by a Chartered Engineer either at the time of import or after seizing the goods based on doubt regarding age of the machines. The whole argument of Revenue is based on information which they unearthed in their enquiry to the effect thatserial numbers for machines manufactured by CERDANS had crossed 4000 in 1989 itself.However the source of this information is not disclosed in para 6 of the impugned order. It is stated only in very general terms in para 21 of the impugned order also.Based on such unauthenticated informationit is argued that all machines with serial numbers less than that should have been manufactured earlier. It is in this aspect that some sort of conjecture has been made by Revenue in support of the case. It is possible that the manufacturer was giving different series of numbers for different type of machines. The exact year of taking over of the company of CERDANS by VAMATAX also is not clear. So no value can be added by argument based on takeover of the manufacturing company by another company.
8. I also note that the statement of Shri Chandrasekhar does not in any way indicate that the age of the machines was wrongly declared. The reason that he was not able to explain certain surmises of the officers regarding machine numbers ortakeover of the manufacturing company abroad by another company and the time of such takeover cannot result in any adverse inference.
9. Thus on overall appreciation of the evidence I am of the view that in this case the benefit of doubt should go to the appellant. Therefore I hold that Revenue has failed to prove any mis-declaration and violation of the import policy. So I set aside the impugned order and allow the appeal with consequential relief.