2015 (10) TMI 326 - AT - Customs

Pre-shipment inspection Recovery of live bomb shells During examination of goods at time of clearance 10 Live Bombs Shells were found in consignment, therefore, entire consignment of Cast Iron Scrap alongwith 10 Live Bombs Shells was held to be liable for confiscation by Adjudicating Authority Commissioner also upheld confiscation of goods and imposition of penalties, however, reduced redemption fine and penalty Held that -production of pre-shipment inspection certificates from authorized agency is not denied Further consignments as per documents were originating from U.K., which is not war prone area It is observed that pre-shipment inspection agency did not carry out their job properly for which appellant cannot be held responsible There is no evidence on record to hold that appellant was aware that waste and scrap imported by them contained live bomb shells There is no justification for confiscation of waste and scraps (other than live Bomb Shells) imported by appellant and accordingly, no penalties upon appellant under Section 112 of Customs Act, 1962 can be imposed Accordingly redemption fine and penalty are set aside however, live bomb shells imported alongwith above melting waste and scraps are required to be absolutely confiscated Decided in favour of Assesse.

Summary

Issues:
- Confiscation of imported goods
- Imposition of penalties
- Pre-shipment inspection certificate validity
- Appellant's liability for confiscated goods
- Appellant's awareness of the contents of the imported goods
- Justification for redemption fine and penalty

Confiscation of Imported Goods:
The appellant filed an appeal against the order of confiscation of imported goods and imposition of penalties. The first appellate authority upheld the confiscation but reduced the redemption fine and penalty. The issue was whether the entire waste and scrap imported by the appellant was liable for confiscation and penalties. The appellant had produced the required pre-shipment inspection certificate from an authorized agency at the time of clearance, which was not denied by the Revenue.

Appellant's Liability and Precautions:
The appellant argued that they had taken sufficient precautions as per the circular issued by the department, citing relevant case laws to support their stance. The Authorized Representative for Revenue contended that the appellant failed to inform the department about the presence of live bomb shells in the consignment, unlike in a similar case law where redemption fine and penalties were upheld. However, the Tribunal found that the appellant had fulfilled the prescribed requirements, including obtaining the pre-shipment inspection certificate and providing the contract between the supplier and importer.

Awareness and Justification for Penalties:
The Tribunal noted that there was no evidence to suggest that the appellant was aware of the live bomb shells in the imported goods. The case records indicated that the pre-shipment inspection agency did not carry out their job properly, absolving the appellant of responsibility. The Tribunal emphasized that the appellant had taken necessary precautions as per the prescribed procedure and that the consignments were not from a war-prone area. The Tribunal rejected the Revenue's argument that the appellant should have taken additional precautions to ascertain the origin of the scraps.

Decision and Order:
After considering the arguments from both sides and reviewing the case records, the Tribunal allowed the appeal by setting aside the redemption fine and penalty. However, the live bomb shells were to be absolutely confiscated and not allowed to be cleared on redemption fine. The Tribunal concluded that there was no justification for confiscating the waste and scraps, other than the live bomb shells, imported by the appellant. The Revenue failed to establish the necessity for penalties or additional precautions by the appellant.

Conclusion:
The Tribunal's decision favored the appellant, emphasizing their compliance with the prescribed procedures and lack of evidence of their awareness regarding the contents of the imported goods. The judgment highlighted the importance of fulfilling the required documentation and procedures, ultimately leading to the setting aside of the redemption fine and penalty, except for the live bomb shells which were to be confiscated.