2011 (4) TMI 228 - AT - Customs

Confiscation - Waste and scrap - 100% EOU - Circular No.56/2004-Cus, dt.18.10.07 and No.60/2004-Cus, dt.26.10.07 prescribed pre-inspection certificate by one of the agencies as recognized and authorized by DGFT - it can be safely concluded that the appellant fully followed the procedure required to be followed by them. Further, it is the appellant himself, who informed the Revenue about the presence of war material in the consignment in question - No knowledge or malafide stand attributed to the appellant by Commissioner in his impugned order - it is for the DGFT authority to take an appropriate action as per law against the inspection agency, including cancellation of power of inspection given to them - Decided in favour of the assessee - However, confiscation of 9.533 MTs of war material is, however, upheld

Summary

Issues:
Import of scrap containing war material, confiscation of war material, confiscation of balance scrap, imposition of penalty.

Analysis:
1. The appellants imported a consignment of Heavy Melting Scrap in 15 containers, which was found to contain used arms and ammunitions along with waste and scrap. They informed the Customs officials about the war material present in the consignment.

2. The officers examined the scrap, segregated the war material, and initiated proceedings for the confiscation of 9.533 MTs of war material along with the balance waste and scrap for imposing a penalty.

3. The appellant contended that they complied with all procedural requirements, including producing a pre-inspection certificate, and should not be held guilty for any contravention. They argued against the confiscation of the entire consignment.

4. The Commissioner confiscated the war material and imposed a penalty along with confiscating the balance scrap. The appellant challenged this order before the Tribunal.

5. The Tribunal noted that the appellant had followed the required procedures and had informed the Revenue about the war material. They upheld the confiscation of 9.533 MTs of war material but set aside the confiscation of the balance scrap and the penalty imposed.

6. The Tribunal referred to previous decisions where confiscation of the balance goods was set aside if the importer had no knowledge of the objectionable material in the consignment. They emphasized that the absence of knowledge on the importer's part should not lead to penalties or confiscation of the balance goods.

7. The Tribunal concluded that the appellant's actions were not malicious, and they had followed the prescribed procedures. They set aside the confiscation of the balance scrap and the penalty but upheld the confiscation of the war material.

8. The appeal was disposed of with the confiscation of 9.533 MTs of war material upheld, while the confiscation of the balance scrap and the penalty were set aside based on the principles established in previous decisions.

Judgment: The Tribunal upheld the confiscation of war material but set aside the confiscation of the balance scrap and the penalty imposed, considering the appellant's compliance with procedures and lack of knowledge regarding the objectionable material in the consignment.