2011 (3) TMI 634 - AT - Customs

Confiscation - No objection was raised by the importers at the time of examination, nor were they able to establish part of what was declared as heavy melting scrap and was not re-rollable scrap as found by the Department - heavy melting scrap and re-rollable scrap are recognized as two different categories of scrap and no objection was raised to the examination and finding that part of the consignment confirmed to the definition of re-rollable scrap - Appeal is rejected

Summary

Issues:
Import of heavy melting scrap and re-rollable scrap, confiscation under Customs Act, 1962, redemption option, fine and penalty imposition, appeal against the order.

Import of Scrap:
The appellants imported heavy melting scrap and re-rollable scrap through two Bills of Entry. Upon examination, it was discovered that the quantity of re-rollable scrap exceeded the declared amount. The importers agreed to pay duty for the enhanced value of the re-rollable scrap and the excess quantity received. The re-rollable scrap, valued at approximately Rs. 13.87 lakhs, was confiscated under Sections 111(d) and 111(m) of the Customs Act, 1962, with an option for redemption by paying a fine of Rs. 3 lakhs. Additionally, a penalty of Rs. 50,000 was imposed, leading to the filing of this appeal.

Legal Arguments:
During the hearing, the importers did not contest the examination findings or establish that the scrap declared as heavy melting was not re-rollable as determined by the Department. The importer's counsel cited a Tribunal decision to argue that since all the scrap was melted and used in their factory for ingot manufacturing post-import, it should be treated as heavy melting scrap entirely. However, the Tribunal differentiated between heavy melting scrap and re-rollable scrap as distinct categories, upholding the confiscation. The value of the goods and the quantum of the imposed fine and penalty were deemed appropriate and did not warrant any modification.

Judgment:
The Tribunal upheld the impugned order, rejecting the appeal against the confiscation of the re-rollable scrap under the Customs Act, 1962. The decision emphasized the distinction between heavy melting scrap and re-rollable scrap, affirming the findings of the examination. The Tribunal found no grounds for interference regarding the value of the goods, the fine amount, or the penalty imposed, thereby maintaining the original order in its entirety.

This detailed analysis of the legal judgment highlights the issues surrounding the import of scrap, the confiscation under the Customs Act, 1962, the legal arguments presented during the hearing, and the final judgment of the Tribunal upholding the original order.