2015 (12) TMI 790 - AT - Customs

Confiscation of goods - Imposition of redemption fine and penalty - import of MS Re-rollable scrap through high sea sale basis - goods were found to be seconds/defective/billets - Held that - Issue in this case is not on unauthorized import or any restriction on import but on the question of classification and valuation whether goods are MS re-rollable scrap or defects. The Bills of Entry were ordered by Appraising Group for first check examination and on examination, the goods were found to be seconds and defectives and the value was enhanced. It is also an admitted fact that appellants have not imported their goods directly but purchased on High Sea Sale from High Sea Seller M/s.Modi Impex. Appellants being a manufacturer and imported the goods under actual user for their own consumption for manufacture of final goods. Further, I find that penalty imposed by the adjudicating authority on the High Seas seller, M/s.Modi Impex was set aside by the lower appellate authority in OIA dt. 27.12.2004. Therefore, taking into consideration overall facts and circumstances of the case, I take a lenient view and reduce the redemption fine and penalty - Decided partly in favour of assessee.

Summary

Issues:
- Appeal against penalty confirmed by Commissioner (Appeals)

Analysis:
The appellant imported MS Re-rollable scrap through high sea sale basis, which was later found to be seconds/defective/billets. The adjudicating authority confiscated the goods, imposed a redemption fine of Rs. 2 lakhs, and a penalty of Rs. 1 lakh under Section 112 (a). The Commissioner (Appeals) upheld the demand and confiscation but reduced the fine and penalty to Rs. 1 lakh and Rs. 25,000 respectively. The appellant argued that as the actual user, no penalty should be imposed, and they had paid the duty as per the enhanced value. The penalty imposed on the High Sea Seller, M/s. Modi Impex, was set aside in a separate order. The appellant sought waiver of penalty citing relevant case laws.

The Assistant Commissioner supported the impugned order, stating that the goods were misdeclared as MS re-rollable scrap and were found to be defective upon examination. The issue was not unauthorized import but the classification and valuation of the goods. The Bills of Entry ordered for examination revealed the defects, and it was acknowledged that the appellant had purchased the goods through High Sea Sale. Considering the overall circumstances, the Member (T) took a lenient view and reduced the redemption fine to Rs. 50,000 and the penalty to Rs. 10,000. The appeal was partly allowed, modifying the impugned order accordingly.