2009 (3) TMI 815 - AT - Customs

Confiscation - EXIM - Import of used truck - Adjudication/Appeal - Grounds - Penalty - Imposition of - Classification of goods

Summary

Issues:
Confiscation of imported goods under Customs Act, 1962, allied fine, penalty imposed under different sections, waiver of homologation certificate, classification of imported item under Customs Tariff Act, breach of Import Licensing Notes, applicability of Foreign Trade Policy, challenge to penalty imposed, reasonableness of penalty.

Confiscation and Fine:
The appeal challenged the confiscation of an imported "old and used medium service land carrier logging truck" under Customs Act, 1962, along with a fine and penalty. The appellants imported the truck for onshore mining of petroleum in Assam, seeking waiver of homologation certificate from DGFT. The truck was older than three years from the date of manufacture, breaching Import Licensing Notes. The Commissioner ordered confiscation, imposed a fine of Rs. 3.50 lakhs, and a penalty of Rs. 1.50 lakhs, leading to the appeal.

Classification and Compliance:
The ITC (HS) classification of the imported goods under Heading 8705 90 00 was not challenged by the appellants, who applied for waiver based on Import Licensing Notes. The appellants' plea that the goods were freely importable under Foreign Trade Policy was rejected as they themselves sought waiver from DGFT. The import was deemed in breach of condition (a) of Import Licensing Note, justifying confiscation under Customs Act, 1962. The fine imposed was considered reasonable at approximately 5% of the goods' value.

Penalty Imposition:
The appellants cited a Tribunal decision in a similar case to argue for waiver of the penalty. However, the Tribunal differentiated the present case from the precedent, emphasizing the deliberate breach of Import Licensing Note conditions. The Tribunal referenced Supreme Court rulings on penalty imposition, highlighting the conscious disregard of obligations in the present case. The penalty under Section 112(a) of the Act was upheld due to the appellants' awareness of the breach and failure to seek waiver, unlike in the cited case.

Reasonableness of Penalty:
The Tribunal found the Commissioner's determination of the penalty to be fair and reasonable in light of the circumstances. Considering the breach of Import Licensing Note conditions and the appellants' actions, the penalty was deemed sustainable. Consequently, the appeal was dismissed, affirming the confiscation, fine, and penalty imposed.

Conclusion:
The judgment upheld the confiscation, fine, and penalty imposed on the appellants for importing an old and used truck in violation of Import Licensing Note conditions. The decision emphasized the deliberate breach of regulations, leading to the dismissal of the appeal and the sustained penalty.