2007 (1) TMI 24 - AT - Customs

Confiscation alleged that appellant were confiscated the goods under Section111 of the CA and accordingly redemption fine and penalty imposed on him Question of penalty to be decided a fresh by Commissioner appeals

Summary

Issues:
1. Valuation of imported goods under Customs Notification No. 20/99
2. Confiscation of mis-declared goods and imposition of fine and penalty
3. Abandonment of goods by the importer and liability for penalty under Section 112 of the Customs Act
4. Permission for mutilation of goods and its implications on penalty assessment

Issue 1: Valuation of imported goods under Customs Notification No. 20/99
The case involved the import of goods declared as "non-alloy steel melting scrap" but found to contain different materials upon examination. The original authority rejected the declared value for most goods, enhanced unit prices, and confiscated mis-declared items. The benefit of Customs Notification No. 20/99 was denied, leading to reassessment of goods.

Issue 2: Confiscation of mis-declared goods and imposition of fine and penalty
The original authority confiscated mis-declared goods under Section 111 of the Customs Act and imposed a fine and penalty on the importer under Section 112. The appellate authority set aside the fine and penalty considering the request for mutilation of non-scrap goods, directing clearance as 'waste and scrap' with the benefit of the Notification.

Issue 3: Abandonment of goods by the importer and liability for penalty under Section 112 of the Customs Act
The department appealed against the setting aside of the fine and penalty, arguing that the importer had abandoned the goods and should still be held liable for penalties under Section 112. The argument was based on a Supreme Court judgment regarding abandonment and misdeclaration consequences.

Issue 4: Permission for mutilation of goods and its implications on penalty assessment
The appellate tribunal observed that the importer had abandoned the goods and declined the benefit of mutilation, rendering the direction for clearance as 'waste and scrap' ineffective. The question of penalty under Section 112(a) was not examined on merits by the appellate authority, leading to a direction for reconsideration of penalty assessment after setting aside the order of mutilation. The tribunal directed the lower appellate authority to decide on the penalty issue after giving the importer a reasonable opportunity to be heard and to consider relevant case law presented.