2015 (12) TMI 791 - AT - Customs

Import of heavy melting scarp (HMS) claiming exemption in terms of notification No.12/2012-Cus dated 17.3.2012 - Misdeclaration of goods - Confiscation of goods - Imposition of redemption fine and penalty - Held that - Contention of learned Counsel that the import of the goods contained only negligible copper scrap, brass scrap, stainless steel scrap and aluminum scrap is correct. These scrap were attached/intact with HMS. In such circumstances, redemption fine and penalty imposed, in my view is on the higher side. - Redemption fine and penalty is reduced - Decided partly in favour of assessee.

Summary

Issues Involved:
- Discrepancy in valuation of imported goods
- Imposition of redemption fine and penalty

Discrepancy in Valuation of Imported Goods:
The appellant had filed a bill of entry for import clearance of heavy melting scrap (HMS) declaring a unit price of USD 370 per metric ton (MT) and availed exemption under a specific notification. However, during appraisement, the goods were assessed at USD 400 per MT. It was reported that the consignments contained various metal scraps along with HMS, which were misdeclared. The adjudicating authority not only ordered the payment of appropriate customs duty but also imposed a redemption fine of &8377; 3 lakh each in both appeals. Additionally, penalties under section 112 of the Customs Act, 1962 were imposed. The Commissioner (Appeals) upheld these penalties. The appellant's challenge was focused on the redemption fine and penalties imposed, as they contended that the import documents were in order, and the quantity of metal scraps after segregation was negligible, remaining intact with the HMS. The duty liability had already been discharged by the appellant.

Imposition of Redemption Fine and Penalty:
During the hearing, the appellant's counsel did not dispute the valuation or classification of the goods but specifically contested the redemption fine and penalties. The appellant argued that the metal scraps were minimal and were attached to the HMS, emphasizing that all import documents were in compliance. On the other hand, the Departmental Representative (DR) defended the orders imposing the redemption fine and penalties, asserting their reasonableness. After considering both parties' submissions and examining the records, the Tribunal acknowledged that the imported goods primarily consisted of negligible amounts of various metal scraps along with the HMS. Consequently, the Tribunal deemed the redemption fine and penalties to be excessive and reduced the redemption fine to &8377; 1 lakh and the penalties to &8377; 25,000 in both appeals, as it was believed that this adjustment would serve the interests of justice. The Tribunal did not find any other arguments presented by the appellant's counsel. As a result, the impugned order was modified by reducing the redemption fine and penalties, and the appeals were partially allowed on these terms.

This detailed analysis of the judgment highlights the key issues of the discrepancy in valuation of imported goods and the imposition of redemption fine and penalties, providing a comprehensive understanding of the case and the Tribunal's decision.