2008 (9) TMI 250 - AT - Customs

Appellant has not disputed the classification of the goods and the description before the original adjudicating authority and have conceded that the goods were secondary/defective MS coils and imported in violation of the Import Licensing Note (4) to Chapter 72 -Therefore once the classification etc. has not been challenged at the original stage the same cannot be done at the appeal stage - further once the appellants have themselves declared the goods as defective sheets he cannot claim it as scrap now confiscation justified - there has been no mis-declaration of description and value redemption fine and penalty reduced

Summary

Issues:
1. Import of secondary/defective pre-painted mild steel HR/CR coils without pre-shipment certificate.
2. Confiscation under Sec. 111(d) and (m) of the Customs Act, 1962.
3. Classification of the goods as scrap.
4. Applicability of previous decisions in similar cases.
5. Reduction of redemption fine and penalty.

Analysis:

1. The primary issue in this case revolves around the import of secondary/defective pre-painted mild steel HR/CR coils without the required pre-shipment certificate at Nhava Sheva port. The goods were found to contain both secondary/defective pre-painted mild steel HR/CR coils and secondary/defective mild steel HR/CR coils with width exceeding 6000 mm. Importing such goods without the necessary documentation led to the confiscation of the goods under Sec. 111(d) and (m) of the Customs Act, 1962.

2. The advocate for the appellants argued that the mixed consignment of coils should be considered as scrap based on the description provided in the examination report. Referring to a previous tribunal decision, it was contended that similar mixed lots were classified as scrap when they could not be sold as ferrous products. However, the tribunal found that the goods were not declared as scrap during import but as defective sheets, thus rejecting the argument that they should be treated as scrap.

3. The classification of the goods as scrap was a crucial point of contention. The tribunal differentiated this case from previous decisions where goods were classified as scrap due to specific conditions like rusting. In this instance, since the goods were declared as defective sheets and not as scrap during import, the tribunal upheld the confiscation of the goods. The previous decision by the Commissioner (Appeals) was deemed irrelevant as the classification of goods as scrap was not challenged by the revenue.

4. The tribunal acknowledged that while the goods were rightly confiscated due to the lack of a pre-shipment certificate, it noted that there was no misdeclaration of description or value. Consequently, the tribunal decided to reduce the redemption fine and penalty considering the absence of extraneous materials and the lack of intent to mis-declare the goods. The redemption fine was reduced from Rs. 5 lakhs to Rs. 1.5 lakhs and the penalty from Rs. 1 lakh to Rs. 10,000, partially allowing the appeal.

In conclusion, the tribunal's decision emphasized the importance of complying with import regulations and documentation requirements, while also considering factors such as misdeclaration and the nature of the imported goods in determining the appropriate penalties and fines.