2006 (3) TMI 525 - AT - Customs

Summary

Issues Involved:
Confiscation of used rusted empty shells under Section 111(d) and HMS scrap under Section 119 of the Customs Act, violation of Import and Export Policy, applicability of penalty under Section 112.

Analysis:

1. Confiscation of Goods:
The case involved the confiscation of 2.340 M.T. of used rusted empty shells and the balance HMS scrap under Sections 111(d) and 119 of the Customs Act, respectively. The authorities found the shells mixed with the scrap upon examination. The appellants argued that they purchased the goods in good faith based on documents provided by the seller, including a certificate stating no war materials were present. The Tribunal noted that the appellants did not intentionally import the shells for concealment, as evidenced by their due diligence in obtaining necessary documents. Citing precedents, the Tribunal emphasized the need for conscious intention for confiscation under Section 119, which was not established in this case. The confiscation of the heavy melting scrap under Section 119 was set aside.

2. Penalty Imposition:
The penalty imposed under Section 112 of the Customs Act was also contested. The appellants were penalized for improper importation. 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 inappropriate and set aside.

3. Absolute Confiscation and Penalty:
The Tribunal upheld the absolute confiscation of the 2.340 M.T. of war materials under Section 111(d) of the Customs Act. The penalty imposed on the appellants was determined to be equivalent to the value of the confiscated goods, amounting to Rs. 28,400. The appeal was allowed with modifications to the original order.

In conclusion, the judgment addressed the issues of confiscation under different sections of the Customs Act, violation of Import and Export Policy, and the imposition of penalties. The Tribunal considered the appellants' due diligence in obtaining necessary documentation and found that the confiscation under Section 119 lacked conscious intention. The penalty imposition was reviewed, and the absolute confiscation of war materials was upheld with a corresponding penalty.