2006 (7) TMI 469 - AT - Customs

Summary

Issues: Misdeclaration of goods, confiscation under Sections 111(m) and 111(o) of the Customs Act, 1962, redemption fine, personal penalty, rejection of exemption under DEEC notification, rejection of transaction price, assessment of goods.

Analysis:

The case involved an importer who declared Aluminium ingots from Malaysia but received compressed Aluminium scrap instead. The Customs authorities confiscated the goods under Sections 111(m) and 111(o) of the Customs Act, 1962, and imposed a redemption fine and personal penalty. The Commissioner concluded that the importer misdeclared the goods to clear scrap as ingots. The Tribunal analyzed the situation and found no reason to accept the Commissioner's logic. Both Aluminium ingots and scrap were permissible for duty-free import, and there was no evidence of intentional misdeclaration for gain. The Tribunal held that the importer's declarations were bona fide as there was no benefit to be gained from misdeclaration. They also noted that the first-time supplier's error in sending the wrong goods did not justify confiscation under Section 111(m) of the Customs Act, 1962.

Regarding the confiscation under Section 111(o), the Tribunal ruled that since no goods were cleared on a condition that was not met, confiscation under this section could not be upheld. As both Aluminium ingots and scrap were inputs required under DEEC and permissible for duty-free import, the confiscation under Section 111(o) was not justified. Consequently, the Tribunal set aside the confiscation under Sections 111(m) and 111(o) along with the penalty imposed by the Commissioner.

The Tribunal allowed the importer to clear the Aluminium scrap by amending the declaration in the Bill of Entry and finalizing the assessment as scrap, provided the DEEC licence for scrap was not challenged. The appeal was allowed, and the case was remanded to the adjudicating authority for assessment based on the Tribunal's findings. The confiscation and penalty were overturned, and the importer was granted the opportunity to clear the goods as Aluminium scrap in accordance with the revised declaration.