2007 (5) TMI 79 - AT - Customs

Confiscation and penalty - Alleged that appellant had imported 538 pieces of explosives with melting scrap and accordingly liable for penalty - Held that the allegation was not sustainable and set aside the penalty

Summary

Issues:
1. Confiscation of Heavy Melting Scrap and penalties imposed on the appellants.

Analysis:
The case involves the import of heavy melting scrap for manufacturing steel ingots, with part of the scrap procured through imports. The consignment arrived at ICD Tughlakabad, and upon examination, some containers were found to contain suspected explosive materials. A show cause notice was issued for the confiscation of the explosive pieces and the entire scrap, along with penalties under the Customs Act. The appellants challenged the confiscation and penalties imposed.

The main contention was that the import was solely for the purpose of obtaining heavy melting scrap for steel ingots, and there was no intention to import explosive materials. The appellants argued that they took precautions to ensure no dangerous materials were included in the consignment, relying on the supplier's certificate. The penalties imposed were deemed unwarranted as the appellants were unaware of the offending goods and had followed proper clearance procedures.

The appellants highlighted similar cases where confiscation of non-offending goods and penalties were set aside by the Tribunal. The supplier contended that the appellant was a genuine trader in metal scrap and had no knowledge of the offending goods, thus penalty imposition was unjustified. The absence of specific charges under Section 112 subsections made it difficult to understand the allegations against the appellants, contrary to legal principles highlighted in a Supreme Court judgment.

The Tribunal found that the import was for legitimate business purposes, with the appellants taking necessary precautions to ensure safety and compliance with inspection requirements. There was no evidence of any malicious intent or involvement in illegal activities. Therefore, the confiscation of the scrap and penalties imposed on the appellants were deemed unjustified. The appeals were allowed, setting aside the confiscation of the Heavy Melting Scrap and penalties imposed on the appellants.