2006 (2) TMI 486 - AT - Customs

Summary

Issues:
- Appeal against order-in-appeal setting aside confiscation and penalty on consignment of Heavy Melting Scrap purchased on High Seas Basis.

Analysis:
The issue in this case revolves around the purchase of a consignment of Heavy Melting Scrap (HMS) on High Seas Basis by the respondent, originating from Iran. The authorities seized the consignment due to the presence of a negligible quantity of used empty/rusted/broken shells. Subsequently, the authorities confiscated the consignment and imposed a penalty on the respondent. The Commissioner (Appeals) set aside the confiscation and penalty, leading to the revenue's appeal. The respondent purchased the consignment after receiving a pre-shipment certificate from an inspecting agency accredited by the EXIM policy. The respondent, in good faith, relied on the certificate and was vigilant in the purchase. The appellate authority acknowledged the respondent's due diligence and concluded that the confiscation and penalty were unjustified as there was no fault on the respondent's part.

The Tribunal noted that the respondent had purchased the entire consignment on High Seas basis, indicating that the consignment had already left the originating country's shores at the time of purchase. The respondent's reliance on the pre-shipment certificate from an accredited agency under the EXIM policy was considered a prudent decision, demonstrating the respondent's lack of negligence. The Tribunal agreed with the appellate authority's reasoned conclusion that the confiscation and penalty imposed on the respondent were unwarranted given the circumstances. Consequently, the Tribunal found no grounds to interfere with the order-in-appeal dated 13-7-2005 and dismissed the revenue's appeal.

In conclusion, the Tribunal upheld the order-in-appeal that set aside the confiscation and penalty on the consignment of Heavy Melting Scrap purchased on High Seas Basis by the respondent. The decision was based on the respondent's diligent reliance on the pre-shipment certificate from an accredited agency and the absence of any fault on the respondent's part in the purchase of the consignment. The Tribunal found the appellate authority's decision to be well-reasoned and justified, leading to the dismissal of the revenue's appeal.