D.R. Enterprises Ltd vs Asstt. Collector Of Customs And Ors

The appellant herein is aggrieved by the impugned judgment of the High Court whereby the High Court has refused to allow the appellant import of Web Printing Machine on concessional rate of custom duty. The appellant had endeavored to avail the concessional rate of custom duty on the import of the aforesaid machine under Open General Allowance (for short, 'OGL') with the aid of Notification No. 114/80-CUS, dated 19.06.1980. The High Court has held that the said Notification is not applicable in the instant case as the appellant has not been able to satisfy one particular eligibility condition contained therein. To put it pithily, one of the conditions needs to be satisfied to avail the concessional rate of duty @ 35% ad valorem under the aforesaid Notification is that the machine is having output of 30,000 or more copies per hour. Whereas the appellant contends that the machine in question churned out 36,000 copies per hour, the High Court has found it otherwise. As per the High Court the output of the machine was 25,000 copies per hour, which was reflected in the leaflet of the manufacturer of the machine, which leaflet was filed along with Bill of Entry.

In order to find out the details of the factual background under which the aforesaid issue has cropped up, let us traverse through the facts in some more details.

On 26.11.1987, the Appraiser of Customs House, Bombay issued a query memo with regard to the printing capacity of the imported machine which had been shown in the import invoice as 36,000 copies per hour, but was shown as 25,000 in the leaflet furnished along with the Bill of Entry. Some other queries were also raised. The appellant answered the issue on 21.01.1988.

Having not been satisfied with the reply furnished by the appellant, the customs authorities directed it to warehouse the goods under Section 49 of the Customs Act, 1962 (hereinafter referred to as the 'Act'), after depositing the admitted customs duty. Accordingly, the imported machine was warehoused.

Pursuant to the aforesaid interim order of the High Court, the appellant was allowed to clear the consignment in question. However, the main writ petition was kept pending thereafter which came up for final hearing in the year 2002, i.e. 14 years after the filing of the writ petition. By that time the imported printing machine had been in use by the appellant for all these years. The learned counsel appearing for the appellant, in these circumstances, impressed upon the High Court to decide itself the issue involved, namely, whether imported machine could print 36,000 copies per hour or its speed was less than 30,000 copies per hour and whether the appellant was not entitled to the benefit of the concerned Notification. The High Court went into the issue and by its detailed judgment it has decided this issue against the appellant. The basis for arriving at such conclusion shall be stated by us in some details at the later stage.

(iii) Another submission of Mr. Rao was that the writ petition was filed in the year 1988 in which interim order was granted in favour of the appellant. The High Court was forced to pass such an order directing release of the machine to the appellant when the authorities failed to get the machine inspected to find out the potential output of the said machine. Therefore, the Department allowed the chance to be slipped away to verify this fact on which the entire decision depended, and benefit thereof should have been given to the appellant as it was not possible to ascertain this fact after 14 years. In any case, it was argued that even the High Court before deciding the issue did not go into this aspect.

As pointed out above, the case of the appellant is that the High Court has given undue weightage to the two leaflets as against the other material, including the certificate of the manufacturer clearly stating that the machine in question which was supplied to the appellant was an upgraded version capable of producing 36,000 prints per hour. However, from the reading of the impugned judgment, it becomes clear that each and every document which was filed and relied upon by the appellant has been discussed. The High Court observed that insofar as the documents of the appellant are concerned, they can conveniently be divided into parts. One part of the document consists of two leaflets furnishing technical data and description of the printing machine in question along with Bill of Entry and certificate showing date 08.02.1987 issued by the manufacturer of the machine M/s. Harris Graphics Corporation, USA. The other part of the document is nothing but a correspondence made by the appellant, its Clearing and Holding Agent and one M/s. S.L. Kulkarni & Co., which deals in printing machinery, projecting themselves to be the Indian agent of M/s. Harris Graphics Corporation, USA. The said second part of the documents can well be described as self serving evidence. Likewise, documents produced by the respondent were also divided in two parts. One part represents the document in the nature of Inspection Report based on examination of the entire consignment which was completed on 28.09.1988, while complying with the part of the directions issued by the High Court by order dated 02.09.1988, and the other part of documents is basically the reproduction of documents supplied by the appellant itself.

Other arguments of Mr. Rao were on the merits of the case. Now we shall advert to those submissions.

As a result, the appeal fails and is hereby dismissed with no order as to costs.

AUGUST 12, 2015.