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Vishwamitra Karyalaya Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(5)LC1761Tri(Delhi)
AppellantVishwamitra Karyalaya
RespondentCollector of Customs
Excerpt:
.....shri j.n. roy, learned counsel for the appellants argued that the web fed high speed letter press rotary machines became complete only with the disputed items and that the disputed items were integral part of the web fed high speed letter press rotary. the concession under the notification was clearly applicable to web fed high speed letter press rotary and, therefore, it could not be denied to the disputed four items. he also submitted that there was a contradiction in the order of the collector of customs because he had not denied the concession with respect to hydraulic matrix moulding press treating the same as an integral component of the web-fed high speed letter press rotary. on the same reasoning concession under the notification could not be denied to the four disputed.....
Judgment:
1. The question for decision in this appeal against Order-in-review No.22/84, dated 3-11-1983 passed by Collector of Customs, Calcutta, is whether (i) Automatic Casting Machine ; (ii) Boring Machine ; (iii) Matrix Drying Units and (iv) Milling Machine deserve benefit of concessional assessment under Notification No. 114-Cus., dated 19-6-80 as amended and whether the penalty of Rs. 5,000/- imposed on the appellants is legal and justified.

2. Facts material for decision of this appeal are that the appellants who are publishers of Hindi daily newspaper named 'Dainik Vishwamitra' published from Calcutta entered into a contract No. 88-06/80021, dated 2-3-1977 with Messrs Techmash Export, Moscow for supply of one 3-Unit Volga Rotary Press completed with standard accessories for meeting with the increased demand of publication. The appellants also obtained Import Trade Control Licence No. P/CG/2072090/T, dated 9-12-77 under the Trade Plan with USSR for 1977 specifying the goods as "3-Unit Volga Rotary Press 22.3/4/" Cut-off with Standard equipment and Accessories'.

The goods arrived under three consignments. The appellants at the time of import made declaration as per the invoice and after requisite verification with documentary evidence the consignments, including the disputed items, were allowed clearance granting inter alia concession under Notification No. 114-Cus/8O, dated 19-6-80. Later, the Collector of Customs felt that the out put of the web-fed high speed letter press had been wrongly declared as 30,000 copies per hour to get concessional rate of assessment under the notification and that the individual machines had wrongly been granted concession under the notification.

Show Cause Notice dated 24-12-81 proposing to review the orders of the Assistant Collector was, therefore, served on the appellants calling upon them to show cause why the concession granted be not denied and penalty imposed. After following the usual procedure the Collector, after making physical verification, held that the web-fed letter press imported was capable of obtaining an out put of 30,000 copies per hour.

Accordingly concession to the press under the notification was in order. However, he found that Automatic Casting Machine, Boring Machine, Matrix Drying and Milling machines imported with the web-feb letter press could not be granted concession under the notifition. He ordered recovery of differential duty amounting to Rs. 51,457.11. He further held that the appellants had made a wilful mis-statement in their declaration with a view to evade customs duty and accordingly imposed a penalty of Rs. 5,000/- against the appellants. Aggrieved, the appellants filed this appeal to the Tribunal.

3. At the hearing of the appeal Shri J.N. Roy, Advocate, represented the appellants and Shri S. Chatterjee, JDR, the Respondents. The appellants have filed a catalogue from M/s. Techmash Export relating to Volga rotaries, a copy of the contract, copy of the import licence, copy of bill of entry, copy of invoice, certificate dated December, 1981 certifying that the Volga 3-Unit two folder supplied to the appellants is capable of printing over 40,000 copies per hour, copy of letter dated 14th January, 1982 from Trade Representation of the USSR in India certifying the nature of the 3-Unit Volga Rotary Press and other machines imported with the Unit. There is also a statement showing details regarding availability of second-hand printing machinery and equipment with member publications. Shri J.N. Roy, learned Counsel for the Appellants argued that the web fed high speed letter press rotary machines became complete only with the disputed items and that the disputed items were integral part of the web fed high speed letter press rotary. The concession under the notification was clearly applicable to web fed high speed letter press rotary and, therefore, it could not be denied to the disputed four items. He also submitted that there was a contradiction in the order of the Collector of Customs because he had not denied the concession with respect to Hydraulic Matrix Moulding Press treating the same as an integral component of the web-fed high speed letter press rotary. On the same reasoning concession under the notification could not be denied to the four disputed items.

4. He also submitted that on the facts and circumstances of the case, imposition of penalty against the appellants was not legal or justified.

5. On behalf of the Respondents Shri S. Chatterjee strongly defended the orders passed by the Collector of Customs.

6. We have carefully considered the arguments advanced by the parties.

The perusal of the catalogue produced by the appellants would show that while the four disputed items work with the web fed Volga rotaries, they are certainly not integral component parts of the same. At best, they may be called accessories of the main machine.

7. It is well settled that exemption notifications must be strictly construed and it is for the party claiming benefit of the exemption notification to make out a case for grant of the same. The notification in question also contradicts the appellant's claim that the disputed items could be considered integral parts of web fed high speed letter press rotary. Were it so, it was not necessary to specify in the notification serial No. 5 which reads as under: "Hot metal Mono or Lino type composing machine or casting machine or composing and casting machine, with or without key board." This would itself show that the casting machine which is one of the disputed items is separately granted concession under the notification.

Were it an integral part of the web fed high speed letter press rotary it would not have been necessary to separately specify this machine for benefit of the concession. We reject Shri Roy's argument that the four disputed items be held as being integral component parts of the web fed high speed letter press rotary and on that count be granted concession under the notification.

8. On this reasoning, however, the appellants cannot be denied the concession under the notification in respect of Automatic Casting Machine as casting machine is specifically mentioned for concession under serial No. 5 of the notification. The denial of the concession by the Collector of Customs to the appellants in respect of this item cannot be upheld and to that extent the order of the Collector would have to be modified.

9. As to imposition of penalty we notice that the appellants had placed all the papers before the lower authorities. The lower authorities after verifying all these papers granted concession to the appellants.

In the circumstances, it would not be proper to hold that the appellants are guilty of mis-declaration. Considering the entire facts and circumstances of the case, imposition of penalty against the appellants is not justified.

10. As a result, appellants are held eligible to grant of concession under Notification No. 114-Cus., dated 19-6-80 in respect of Automatic Casting Machine and to that extent the order of the Collector of Customs is set aside. With respect to other items, it is upheld.Penalty of Rs. 5.000/-imposed against the appellants is set aside. The appeal is thus partly allowed on the terms set out above with consequential relief to the appellants.


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