2010 (5) TMI 425 - HC - Customs

Penalty and confiscation - misdeclaration - Held that - There is nothing on record to show that the Respondent-Assessee was unaware of the actual description of the goods. It cannot be assumed that the assessee had been unaware of the description, as he himself had applied for first check. In the present case, duty was assessed on 26.04.2000 and thereafter during the course of examination, the goods were found to be TOR/Ribbed Steel Bars and the Respondent applied for mutilation on 26.05.2000 much after the detection of the offence. In these circumstances, it cannot be held that the Respondent acted in a bona fide manner and he is not liable to fine and penalty. A perusal of the case file shows that only those goods which are not usable because of breakage, cutting up wear etc. can be considered as waste and scrap. However, in the present case, the Chartered Engineer Shri Shori in his opinion has clearly opined that the goods are usable as such. It is clear that the usability and not the length is the criterion for deciding whether the goods are scrap or not. The goods reported in the present case were complete and contained MS rounds instead of HMS and could not be said to be waste material and, therefore, the Commissioner has rightly held that the invoice price for HMS is liable to be rejected as the importer has mis-declared the description as well as the value of goods with an intent to evade customs duty. - Decided in favor of revenue.

Summary

Issues:
1. Confiscation and imposition of penalty and redemption fine
2. Justification of Tribunal's decision to allow the appeal without discussing the issue and merits of the case
3. Legality of the Tribunal's order and sustainability of findings

Analysis:
1. The case involved the import of material declared as HMS but found to be TOR/Ribbed Steel Bars, leading to a dispute over classification and valuation. The Assessee requested mutilation under Customs Act, which was later seized by Revenue. Show Cause Notice was issued for reclassification and imposition of duty, leading to a series of legal actions.

2. The Tribunal allowed the Assessee's appeal, directing release of goods as scrap after mutilation and payment of customs duty at a loaded value of USD 105 per metric tonne. The Tribunal set aside penalty and redemption fine, leading to Revenue's appeal against this decision.

3. The Revenue contended that the Tribunal erred in distinguishing precedents and allowing mutilation based on insufficient grounds. The Assessee argued timely filing of mutilation application and relied on a previous judgment. The High Court analyzed the facts, finding the Assessee's case different from precedents and justifying the Revenue's appeal.

4. The High Court found the Assessee's reliance on precedent misplaced, as the goods were not similar to scrap in previous cases. The Court cited the Supreme Court's judgment and emphasized the Assessee's awareness of goods' description. The Court ruled against the Assessee, upholding the Revenue's appeal and rejecting the Tribunal's decision.

5. The Court highlighted the Chartered Engineer's opinion that the goods were usable, not waste or scrap, contrary to the Assessee's claim. The Court upheld the Adjudicating Authority and Commissioner's orders, concluding that the Assessee mis-declared goods to evade duty, justifying confiscation and penalties.

6. Ultimately, the High Court set aside the Tribunal's order, allowed the Revenue's appeal, and upheld previous authorities' decisions. The judgment favored the Revenue, answering legal questions against the Assessee and in favor of the Revenue, concluding the legal dispute over the imported goods.