2015 (9) TMI 1072 - AT - Customs

Improper importation of old white and coloured, cut wiper industrial rags Classification of Goods Appellant filed Bill of Entry for clearance of old white and coloured, cut wiper industrial rags classified under CTH 63109010 as woolen rags On examination, it revealed that out of 480 bales, 180 bales were coloured and remaining 300 bales white and also goods appeared to be new Adjudicating authority confiscated impugned goods under Section 111(d) of Customs Act, 1962 and redemption fine and penalty was imposed Held that - in test report it was found that goods were not rags and it was not found to be completely mutilated rags It was observed that impugned goods were admittedly small new textile cutting and same was restricted under Foreign Trade Policy Therefore impugned goods were not classifiable however, it was correctly classifiable as others under CTH 63101090, which was restricted As appellant has not obtained special import licence for clearance of same, therefore they have made liable themselves for imposition of penalty However appellant deserve reduction in fine and penalty Decided partly allowed Assesse.

Summary

Issues: Classification of goods under CTH 63109010 or CTH 63101090, imposition of redemption fine and penalty, applicability of relevant judgments on re-exported goods.

Classification of Goods:
The appeal questioned the classification of 'old white and coloured, cut wiper industrial rags' under CTH 63109010 or new rags under CTH 63101090. The appellant argued that even the test report did not confirm the goods as entirely cotton, and small new cuttings should also be considered rags as per HSN notes. The appellant contended that the goods should fall under CTH 63109040 due to the fabric composition. However, the tribunal found that the goods were small new textile cuttings, not completely mutilated rags, and correctly classified under CTH 63101090 as restricted goods. The appellant's failure to obtain a special import license led to the imposition of penalty.

Imposition of Redemption Fine and Penalty:
Regarding the redemption fine and penalty, the appellant cited case laws where leniency was shown when goods were to be re-exported. The tribunal considered these cases and reduced the redemption fine from Rs. 4 lakhs to Rs. 2 lakhs and the penalty from Rs. 1.50 lakhs to Rs. 50,000. The tribunal aligned with previous judgments where re-exported goods led to reduced fines and penalties, emphasizing the need for a proportionate approach.

Applicability of Relevant Judgments on Re-exported Goods:
The tribunal referred to specific cases where re-exported goods influenced the imposition of fines and penalties. In one case, the penalty was set aside due to non-involvement in past offenses and inability to release goods. In another case, penalties were reduced considering the circumstances of the shipment and re-export. The tribunal emphasized the need for a balanced approach in cases involving misdeclaration and re-export, leading to the reduction of fines and penalties in the present case.

In conclusion, the tribunal upheld the classification of goods under CTH 63101090, reduced the redemption fine and penalty due to the possibility of re-export, and aligned with previous judgments emphasizing leniency in such cases. The decision aimed to balance the punitive measures with the circumstances of the case, ensuring a fair outcome based on legal precedents and the specifics of the situation.