Second-Hand Digital Multifunction Machines Imported Pre-2012 Not Confiscable: CESTAT Chennai

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 19 February held that second-hand digital multifunction print and copying machines imported before June 2012 were freely importable and not liable to confiscation.

A Bench comprising Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao were hearing an appeal by Jaya Trading Company. The members examined whether the rejection of the importer's appeal on limitation was legally sustainable and whether second-hand digital multifunction print and copying machines imported prior to 5 June 2012 could be treated as restricted goods, thereby justifying confiscation, redemption fine, and penalty under the Customs Act.

The Bench stated:

"The value was enhanced solely based on Chartered Engineer's estimation of residual value. There is no evidence of extra consideration, forged invoices, or suppression except the Chartered Engineer's Certificate. There was no evidence produced for enhancement of the value of the imported goods. As the imported goods are second-hand digital multifunctional machines, the valuation is peculiar to each consignment."

The appellant had imported old and used digital multifunction machines at Chennai Port in September 2009 and declared their value based on the overseas supplier's invoice.

Since the goods were second-hand, a first-check examination was ordered, and a Chartered Engineer enhanced the value. To avoid demurrage, the importer accepted the enhanced value and paid duty while disputing the licensing objection.

The adjudicating authority confiscated the goods under Section 111(d) of the Customs Act, read with the Foreign Trade (Development and Regulation) Act, 1992 [FTDR Act], imposed a redemption fine and penalty, and rejected the declared value.

Although the importer filed an appeal in time, the Commissioner (Appeals) rejected it years later solely on limitation, without examining the case on its merits.

The Tribunal noted that the appeal before the Commissioner (Appeals) was wrongly rejected as time-barred, since the limitation must be computed from the date of communication of the order and not the date of dispatch.

It also held that under Para 2.17 of the Foreign Trade Policy prevailing in 2009, second-hand capital goods were freely importable, and digital multifunction print and copying machines were restricted only with effect from 5 June 2012.

The Bench opined:

"The second-hand digital multifunction print and copying machines imported by the Appellant in September 2009 were freely importable, and that the enhancement of value based solely on Chartered Engineer's opinion does not warrant confiscation, fine, or penalty."

Accordingly, the Tribunal set aside the impugned order and allowed the appeal.

For Appellant: Advocate, N. Viswanathan

For Respondent: Authorised Representative, Anandalakshmi Ganeshram