2013 (11) TMI 1431 - AT - Customs

Confiscation of goods - Imposition of redemption fine - Import through designated ports - Customs Circular No.56/2004 dated 18.10.2004 - Held that - import and clearance of metal scrap in unshredded compressed and loose form would be permitted through designated ports only - ICD, Garhi-Harsaru is not one of the designated ports through which such scrap can be imported. CBEC vide Circular No.56/2004/-Cus dt.18.10.2004 clarified the import and clearances of metal scrap in unshredded form would be permitted only at the designated ports. Circular was issued in view of threat of national security and there is possibility of import of arms, ammunition, bombs/explosives in the consignment of unshredded scrap. Since on examination, it is found that the appellant has imported unshredded heavy melting scrap through ICD, Garh-Harsaru, which is not designated port, it clearly comes out that there is violation of provision of foreign trade policy read with section 11 of the Customs Act, 1962 making the goods liable to confiscation under section 111(d) - Penalty reduced - Decided partly in favour of assessee.

Summary

Issues:
Violation of Import and Export Policy regarding the import of heavy melting scrap through a non-designated port, imposition of penalty and confiscation under Customs Act.

Analysis:
The appeal was filed against the OIA rejecting the appeal filed by M/s. Jindal Stainless Ltd. and upholding the penalty and confiscation imposed by the Joint Commissioner. The main issue revolved around the import of heavy melting scrap through ICD, Garhi-Harsaru, which was not a designated port for such imports. The goods were found to be unshredded heavy melting scrap, violating the provisions of the Import and Export Policy. The appellant argued that the customs authority could have allowed the transfer of goods to ICD, Delhi for clearance, but the violation was unintentional. However, the Customs Circular No.56/2004 clearly stated that metal scrap in unshredded form could only be imported through designated ports to ensure national security.

The Tribunal analyzed the relevant provisions of the Import and Export Policy along with Customs Circular No.56/2004, emphasizing the need for import of metal scrap in unshredded form only through designated ports. The violation of this requirement by importing unshredded heavy melting scrap through a non-designated port led to the goods being liable for confiscation under section 111(d) of the Customs Act, 1962. The Commissioner (Appeals) highlighted the security implications of restricting scrap clearance to selected ports to prevent the import of hazardous materials.

Regarding the penalty and redemption fine imposed, the Tribunal found the amounts to be reasonable considering the violation and the lenient view already taken by the Commissioner (Appeals). The Tribunal upheld the Order-in-Appeal, rejecting the appellant's plea for modification. The judgment emphasized the importance of adhering to designated ports for importing specific goods to maintain security measures and prevent potential risks associated with unauthorized imports.

In conclusion, the Tribunal affirmed the decision, highlighting the significance of following designated port requirements for importing heavy melting scrap to uphold national security and prevent potential threats associated with unauthorized imports.