2003 (1) TMI 620 - AT - Customs

Summary

Issues involved:
1. Interpretation of Para 5.3(a)(iv) of Handbook of Procedures, Vol. 1 to Exim Policy 1997-2002 regarding import of old synthetic rags without license.
2. Confiscation of goods under Section 111(d) of the Customs Act, 1962 read with Section 3 of Foreign Trade (Development & Regulation) Act, 1992.
3. Imposition of penalty under Section 112(a) of the Customs Act.
4. Challenge against the quantum of redemption fine and penalty imposed.

Issue 1: Interpretation of Para 5.3(a)(iv) of Handbook of Procedures
The importers of old synthetic rags claimed clearance without license under Para 5.3(a)(iv) of the Handbook of Procedures, which allowed import subject to specific mutilation requirements. However, Customs Authorities found that the mutilation did not conform to the norms specified in Public Notice No. 86/94. As a result, the goods were directed to be further mutilated, and when the importers refused, the goods were confiscated under relevant legal provisions.

Issue 2: Confiscation of Goods
The Customs Authorities proceeded to confiscate the goods under Section 111(d) of the Customs Act, 1962 read with Section 3 of the Foreign Trade (Development & Regulation) Act, 1992, due to non-conformity with specified mutilation requirements. The importers were given the option to redeem the goods on payment of a fine after mutilating the goods at their own cost in accordance with Public Notice No. 86/94.

Issue 3: Imposition of Penalty
Penalties were imposed under Section 112(a) of the Customs Act in addition to the confiscation of goods. The adjudicating authority passed orders for confiscation, granting the importers the option to redeem the goods upon payment of a fine and imposing penalties in each case.

Issue 4: Challenge against Redemption Fine and Penalty
The appellants challenged the quantum of redemption fine and penalty imposed, contending that they were unreasonably high. The appellants argued for a reduction based on precedents where redemption fines and penalties were lowered by the Tribunal and the Commissioner of Customs in similar cases. The Tribunal found the redemption fine and penalty to be excessive and reduced them to 20% and 10% of the value of the confiscated goods, respectively. The appellants did not object to this course, resulting in the modification of the impugned orders except for one case where the redemption fine was reduced to 20% of the value of the goods confiscated.

In conclusion, the appeals were partly allowed, and the redemption fines and penalties were reduced based on the value of the confiscated goods, following precedents and considering the circumstances of each case.