2007 (3) TMI 506 - AT - Customs

Summary

Issues:
Import of heavy melting scrap without pre-shipment inspection certificate; Seizure and confiscation under Customs Act, 1962; Applicability of Circular No. 56/2004-Cus.; Classification of consignment under categories (i) and (ii); Requirement of pre-shipment inspection certificate; Confiscation of goods and imposition of penalty.

Analysis:
The case involved the import of heavy melting scrap without a pre-shipment inspection certificate, leading to the seizure and confiscation of the consignment under Section 111(d) of the Customs Act, 1962, with an option to redeem on payment of a fine of Rs. 1,75,000 along with a penalty of Rs. 85,000. The appellant argued that their consignment fell under category (i) as per Circular No. 56/2004-Cus., which allowed clearance based on 100% physical examination without the pre-shipment certificate requirement. They highlighted delays in documentation, such as the bill of lading issued after the prescribed date. The Commissioner acknowledged the loading date of the material and took a lenient view, indicating compliance with category (i) criteria, thus not necessitating the pre-shipment certificate. Notably, the goods underwent 100% examination with no contraband found, aligning with the Tribunal's decisions in similar cases where unintentional infractions did not warrant confiscation or penalty.

The judgment emphasized that the appellant, falling under category (i) per the circular, did not require a pre-shipment inspection certificate. Given the absence of contraband upon physical examination and the unintentional nature of the non-compliance, the confiscation of goods and imposition of penalties were deemed unjustified. Citing relevant Tribunal decisions, the judgment highlighted that the appellant's actions did not warrant such severe consequences. Consequently, the impugned order was set aside, and the appeal was allowed, providing consequential relief to the appellant. The decision underscored the importance of proper categorization under applicable circulars and the proportionality of penalties based on the circumstances of non-compliance.