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2006 (12) TMI 310 - AT - Central Excise
Issues:
Appeal against Order-in-Appeal upholding confiscation of goods and penalty reduction. Detailed Analysis: The case involved an appeal against an Order-in-Appeal that upheld the confiscation of goods and the reduction of penalty imposed under the Order-in-Original. The appellants had imported 500 M.T. Heavy Metal Scrap, but upon examination, it was found that 50 M.T. of Re-rollable material was included, not eligible for duty exemption as Heavy Metal Scrap. The adjudicating authority confiscated the Re-rollable material under Section 111(m) of the Customs Act, 1962, and imposed a penalty, which was upheld by the Commissioner (Appeals). The appellant's representative argued that the import was as per the contract for Heavy Metal Scrap, supported by documents from the foreign supplier, and there was no intention to mis-declare the goods. On the other hand, the Departmental Representative contended that the import of Re-rollable material in Heavy Metal Scrap warranted action under Section 111(m) and penalty under Section 112 was correctly applied. After considering the submissions and examining the documents, it was found that the appellants had indeed contracted for the import of Heavy Metal Scrap Grade-I, supported by the contract, invoice, and certificate from the foreign supplier. Despite the inadvertent inclusion of Re-rollable scrap material, the goods were liable for confiscation under Section 111(m) as they did not correspond to the declaration. The redemption fine was reduced to Rs. 35,000 considering the circumstances. Regarding the penalty, it was concluded that Section 112 did not apply as the appellants acted based on documents provided by the foreign supplier without any intention to mis-declare. Therefore, the penalty imposed was deemed unwarranted and set aside. Consequently, the impugned order was modified to reduce the redemption fine and set aside the penalty. The cross-objection filed by the department in support of the impugned order was also disposed of accordingly.
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