2014 (8) TMI 877 - AT - Customs

Port restriction - Import of secondary/defective HR Steel Strips/Coil falling under heading 7209.90 free of duty under Notification No.52/2003-CUS dated 31/03/03 at ICD Ludhiana - contravention of the provisions of the ITC (HS) (Licensing Note No.4 of Chapter 72) - Revenue contends that Import of Secondary/Defective Steel items i.e. HR Coils, HR Sheets, CR Coils/ Sheets etc. shall be allowed only through the Customs Sea Ports at Mumbai, Chennai or Kolkata and the imports of these consignments shall be accompanied by pre-shipment inspection certificates regarding description of the material, quality, chemical analysis of the material, visual inspection, thickness and width of the material - Held that - The reason for this restriction would be that expertise for examination of such goods would be available only at the major ports and not at the every port. The import of the goods, in question, at ICD, Ludhiana, notwithstanding the fact that the procurement certificates issued by the Superintendent permitted their import at this ICD, is contrary to the ITC provisions. Therefore, I am of the view the goods have been correctly confiscated. However, looking to the circumstances of the case, the penalty on the appellant under Section 112 (a) of the Customs Act, 1962 is waived and the redemption fine is reduced to ₹ 1,00,000 - Order modified.

Summary

Issues: Import of defective HR Steel Coils/Strips at ICD Ludhiana in contravention of licensing notes under ITC (HS) Chapter 72. Confiscation of goods, imposition of penalty, and clearance under Notification No.52/2003-CUS.

Analysis:
1. The appellant, a 100% EOU, imported duty-free HR Steel Coils/Strips at ICD Ludhiana under Notification No.52/2003-CUS. Customs Authorities confiscated the goods, citing contravention of licensing notes under ITC (HS) Chapter 72, which restricts import of defective HR Coils/Strips to certain sea ports.

2. The appellant argued that as an EOU, they were eligible for fast track clearance per handbook provisions and Circular No.63/97-CUS. They contended that since the procurement certificates allowed import at ICD Ludhiana, the licensing note restrictions should not apply, challenging the confiscation and penalty.

3. The Respondent defended the confiscation, emphasizing the licensing note's specific port requirements for importing defective HR Coils/Strips. Despite the procurement certificates, the import at ICD Ludhiana was deemed contrary to Exim policy, justifying the confiscation and penalty under Customs Act sections 111(d) and 112(a).

4. The Tribunal acknowledged the licensing note's port restrictions under ITC (HS) Chapter 72 and upheld the confiscation due to the goods being imported at ICD Ludhiana against the prescribed sea ports. However, considering the circumstances, the penalty was waived, and the redemption fine reduced to Rs. 1,00,000, modifying the impugned order accordingly.