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Issues:
1. Confiscation of goods under Sections 111(d) and 119 of the Customs Act. 2. Violation of Para 2.32 of the Import & Export Policy. 3. Applicability of Section 112 for penalty imposition. 4. Proper application of Sections 118 and 119 for confiscation. Analysis: Issue 1: Confiscation of goods under Sections 111(d) and 119 of the Customs Act: The appeal challenged the confiscation of 0.620 M.T. of used, rusted, broken shells and cartridges under Section 111(d) and the confiscation of the entire consignment of HMS scrap under Section 119. The appellants argued that they purchased the goods in good faith based on documents certifying no war materials. The Tribunal found that the appellants did not have the intention to conceal the shells and cartridges, as they had taken necessary precautions while purchasing the goods. Citing precedents, the Tribunal held that the confiscation of the heavy melting scrap under Section 119 was not justified, and it set aside the order of confiscation under this section. Issue 2: Violation of Para 2.32 of the Import & Export Policy: The authorities contended that the appellants failed to meet the conditions of Para 2.32 of the Import & Export Policy by not producing the required certificates from authorized certifying agencies. The appellants argued that they relied on the documents provided by the seller, including a pre-inspection certificate from a recognized authority. The Tribunal agreed with the appellants, noting that they had taken reasonable steps to ensure the absence of war materials in the consignment, and set aside the confiscation under Section 119. Issue 3: Applicability of Section 112 for penalty imposition: The penalty imposed on the appellants under Section 112 of the Customs Act was challenged. The Tribunal clarified that the penalty under Section 112 for goods confiscated under Section 111 was valid. However, the penalty imposed for the confiscation of heavy melting scrap under Section 119 was deemed incorrect and set aside. Issue 4: Proper application of Sections 118 and 119 for confiscation: The Tribunal examined the application of Sections 118 and 119 for the confiscation of goods. It emphasized the requirement of conscious intention for confiscation under Section 119 and concluded that the appellants did not have the intention to conceal the shells and cartridges. Citing previous judgments, the Tribunal found that the confiscation of the heavy melting scrap under Section 119 was not justified and set aside the order of confiscation under this section. In conclusion, the Tribunal allowed the appeal with modifications to the order-in-original, upholding the absolute confiscation of the war materials under Section 111(d) and setting aside the confiscation of heavy melting scrap under Section 119. The penalty imposed under Section 112 was upheld for goods confiscated under Section 111 but set aside for the heavy melting scrap confiscated under Section 119.
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