2006 (2) TMI 555 - AT - Customs

Summary

Issues:
1. Classification of imported goods under CETH 76020010 and 760210 for exemption.
2. Violation of Para 2.32 of the Handbook of Foreign Trade Policy Procedure 2004-2009.
3. Confiscation of goods under Sections 111(d) and 111(m) of the Customs Act, 1962.
4. Imposition of redemption fine and penalty under Sections 112(a) and 125 of the Customs Act, 1962.
5. Justification of penalties based on mens rea and previous experience of importer.

Analysis:
1. The appeal was against the Order-in-Original passed by the Commissioner of Customs & Central Excise, Hyderabad regarding the classification of imported goods declared as "Aluminium Scrap-tread" under CETH 76020010 and 760210 for exemption under Notification No. 21/2002 Sl. No. 495. The Original Authority held that the goods were imported in violation of Para 2.32 of the Handbook of Procedures 2004-2009 and confiscated them under Sections 111(d) and 111(m) of the Customs Act, 1962. The classification was revised to 76020090, making the goods restricted for import, requiring a license.

2. The appellant argued that the violations were technical without intent, fulfilling all conditions of Public Notice No. 16/2004. They contended that the goods were imported through JNPT port as per the notification, not specifying clearance only from that port. The respondent's finding on the restriction of goods under 76020090 was challenged, citing the amendment by Public Notice No. 16/2004, which allowed import subject to conditions. The appellant also argued against the Circular's restriction on clearance only at specified ports.

3. The Tribunal noted that the import and clearance of unshredded metal scrap were restricted to specified ports as per the Circular and Public Notice. The goods imported through Hyderabad ICD were in violation, justifying confiscation. However, considering the absence of malafide intent and importer's ignorance of the policy, the penalty under Section 112(a) was reduced to Rs. 20,000, and the redemption fine under Section 125 was reduced to Rs. 2 lakhs from Rs. 8 lakhs.

4. The Tribunal emphasized that the importer lacked previous experience and acted based on documents supplied by the exporter, reducing the penalties accordingly. The judgment highlighted the technical nature of the violations and the need to consider intent and knowledge of import policies in determining penalties, ultimately reducing the fines imposed on the appellant.