2007 (8) TMI 543 - AT - Customs

Confiscation and penalty - Misdeclaration - Held that - they had declared the goods in the Bill of Entry on the basis of the documents received from the supplier and hence the misdeclaration was not deliberate and thus imposition of huge fine and penalty is totally unjustified. It is settled law that the penalty is ordinarily imposed for contumacious conduct or acts which are done so as to gain unlawfully. There was no mala fide intention on part of the appellants to evade duty or deliberately violate the provisions of the Foreign Trade Policy or to make any gain in unlawful manner. Penalty and redemption fine set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of goods under Sections 111(d) and 111(m) of the Customs Act, 1962.
2. Imposition of redemption fine and penalty under Sections 125 and 112(a) of the Customs Act, 1962.
3. Misdeclaration of imported goods as shredded zinc die cast scrap "Scribe" instead of "Saves."
4. Submission of Pre-Inspection Certificate after misdeclaration was discovered during physical examination.
5. Justification for misdeclaration based on documents received from the supplier.
6. Requirement of Pre-Inspection Certificate for imported metal scrap.
7. Lack of mala fide intention to evade duty or violate provisions of Foreign Trade Policy.
8. Legality of imposing penalty and redemption fine.

Analysis:
1. The Commissioner confiscated the goods under Sections 111(d) and 111(m) of the Customs Act, 1962, allowing redemption on payment of a fine and imposing a penalty. The appellant challenged this decision.
2. The appellant imported unshredded metal scrap misdeclared as shredded "Scribe" grade. The Commissioner noted discrepancies and imposed a redemption fine and penalty under relevant sections of the Customs Act, 1962.
3. The appellant argued that misdeclaration was unintentional, relying on documents from the supplier describing the goods as "Scribe" grade. They contended no duty evasion occurred as both grades attracted the same duty rate.
4. Both "Scribe" and "Saves" grades were freely importable, but a Pre-Inspection Certificate was required for unshredded scrap. The appellant submitted the certificate post-discovery of misdeclaration, believing the scrap was shredded.
5. The Tribunal found no mala fide intent in the appellant's actions, noting no duty evasion or unlawful gain. The penalty and fine were deemed unjustified and quashed.
6. The Tribunal set aside the redemption fine and penalty, ruling in favor of the appellant, highlighting the absence of deliberate wrongdoing or intent to evade duty.

This detailed analysis covers the issues of confiscation, misdeclaration, submission of certificates, lack of mala fide intent, and the legality of penalties imposed, providing a comprehensive overview of the judgment.