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Issues involved:
The issues involved in this case are the confiscation of a consignment of steel bars imported by the appellants by the Additional Collector of Customs, Bombay, subject to a fine in lieu of confiscation, due to the contention that the goods were canalised and should have been imported through the concerned canalising agency, SAIL, and not directly by the importers. Details of the Judgment: Issue 1: Classification of Imported Steel The appellants argued that the steel they imported, which had a chromium content of about 20.6%, was not stainless steel but alloy steel required for manufacturing engine valves. They contended that the material they had been importing for several years was not considered stainless steel until 1981, when a question was raised. Despite this, the Customs authorities allowed the import and issued a detention certificate. The appellants highlighted that the material was technically stainless steel but had been consistently imported as alloy steel for the manufacture of engine valves. Issue 2: Interpretation of ITC Policy for 1982-83 The Customs authorities objected to the import of the consignment in 1982 based on the ITC policy for 1982-83, which defined stainless steel as any steel containing over 12% chromium. The appellants argued that this definition was implicitly in force earlier and cited Notification No. 153/82-Customs, which provided partial exemption for alloy steel used for engine valves. They contended that the Customs authorities' recognition of the material as alloy steel for the exemption was inconsistent with considering it as stainless steel for the import license. Issue 3: Justification of Confiscation and Fine The Customs authorities confiscated the goods and imposed a fine of Rs. 1,00,000, citing the goods as canalised items under the ITC policy for 1982-83. The appellants argued that penal action was not justified as the steel was essential for manufacturing engine valves, and they had been regularly receiving licenses for such imports. They contended that a warning would have sufficed, citing previous High Court decisions on imposing fines in cases of bona fide doubt. Conclusion: After considering both sides' arguments, the Tribunal acknowledged that the goods fell within the scope of stainless steel as per the ITC policy for 1982-83. However, due to the essential nature of the imported steel for manufacturing engine valves and the inconsistency in the Customs authorities' treatment of the material, the Tribunal held that penal action was unwarranted. The confiscation of the goods and the fine were set aside, and the fine amount was ordered to be refunded to the appellants. The Additional Collector's order was modified accordingly.
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