2010 (9) TMI 363 - AT - Customs

Penalty for improper importation of goods, etc - DGFT licence is a pre-condition for import - All the goods were confiscated - The confiscability of druid grade copper scrap and copper scrap is set aside - Further, as no licence was produced by the said appellant, he is liable to penalty which is adjudged as Rs. 10,000 - since the said unit is located in SEZ, they are entitled to import of all types of goods except prohibited items, in terms of Para 7.2 of Chapter 7 of EXIM Policy, 2004 Penalty - For non-production of pre-shipment inspection certificate - The appellants have contended that in majority of the cases, the entire quantity was imported (by way of purchase from SEZ unit M/s Sameer) before issuance of the Board s circular dt.18.10.04 requiring production of pre-shipment inspection certificate - The impugned order is, otherwise, set aside - All the appeals are disposed off accordingly

Issues:
1. Confiscation of imported scrap due to lack of pre-shipment inspection certificate
2. Confiscation of specific types of scrap due to lack of valid import licenses and non-compliance with Hazardous Waste Rules
3. Interpretation of import licensing notes and registration requirements under the Customs Act, 1962
4. Application of redemption fines and penalties for non-compliance

Issue 1: Confiscation of imported scrap due to lack of pre-shipment inspection certificate
The Tribunal considered the imposition of penalties on appellants for not producing pre-shipment inspection certificates. It was noted that most consignments were imported before the circular requiring such certificates. The Tribunal, citing various precedents, found no justifiable reason for penalties as there was no evidence of war material in the imported scrap. Consequently, the penalties were set aside.

Issue 2: Confiscation of specific types of scrap due to lack of valid import licenses and non-compliance with Hazardous Waste Rules
Regarding the confiscation of scrap imported by various appellants, the Tribunal examined the requirements under the Hazardous Waste (Management and Handling) Rules, 1989. For M/s Raja Zinc Pvt. Ltd. and M/s Metal Link Alloys Pvt. Ltd., the Tribunal found that the confiscation of certain scrap was unjustified as they were registered with the Central Pollution Control Board (CPCB) and did not require specific licenses. The Tribunal set aside the confiscation of certain scrap but upheld it for plastic scrap due to the lack of a required license.

Issue 3: Interpretation of import licensing notes and registration requirements under the Customs Act, 1962
The Tribunal analyzed the import licensing notes and registration requirements under the Customs Act, 1962 for specific types of scrap. It was determined that certain appellants did not need licenses for import based on their registration with the CPCB. The Tribunal reduced redemption fines and penalties for non-compliance with licensing requirements, considering mitigating factors such as lack of clarity and subsequent clarifications.

Issue 4: Application of redemption fines and penalties for non-compliance
In determining redemption fines and penalties for non-compliance, the Tribunal considered factors such as the correct valuation of imported goods, registration status, and compliance with rules and regulations. The Tribunal reduced redemption fines and penalties based on the specific circumstances of each appellant, including inadvertent errors in valuation and lack of clarity in legal requirements. The Tribunal also differentiated between types of scrap and the necessity of licenses for import.

In conclusion, the Tribunal upheld the confiscation of certain scrap while setting aside penalties and reducing redemption fines and penalties for various appellants based on the specific circumstances and legal interpretations of the issues involved.

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