2017 (10) TMI 1197 - AT - Customs

Confiscation of scrap - redemption fine - penalty - Held that - The appellant have not challenged the fact of presence of prime HR sheets in the scrap. Neither have they felt aggrieved with the classification of the prime quality of sheets adopted by the lower authorities nor the higher valuation of the same. This leads to the inevitable fact that the prime sheets were sought to be imported in the guise of re-rollable scrap and there was mis-declaration, thus making the goods confiscable. As such, the confiscability of the goods in question is required to be upheld. Redemption fine - penalty - Held that - the appellant have contested the quantum of redemption fine on the ground that there was nothing to suggest that the said prime quality of sheets were sent by the foreign supplier was at their request. Appreciating the fact that no evidence stands placed by the Revenue to show that such presence of sheets was at the appellant s behest, redemption fine reduced to ₹ 35,000/- - Similarly, the penalty of ₹ 15,000/-, in the absence of any evidence to show the direct involvement of the appellant, is reduced to ₹ 7,500/- Appeal allowed in part.

Summary

Issues:
1. Presence of prime HR sheets in re-rollable steel scrap
2. Classification and valuation of the prime quality sheets
3. Confiscation of goods and imposition of redemption fine and penalty
4. Challenge to the quantum of redemption fine and penalty

Analysis:

Issue 1: Presence of prime HR sheets in re-rollable steel scrap
The appellant imported re-rollable steel scrap at a declared value of US$ 423 per MT. Upon examination, it was discovered that out of the total weight, a significant portion was prime HR Sheets of higher value. The appellant did not dispute the presence of these sheets and paid the differential duty to clear the goods.

Issue 2: Classification and valuation of the prime quality sheets
The Additional Commissioner held that the prime HR sheets were liable to confiscation but provided an option for redemption on payment of a fine. The appellant did not challenge the classification or valuation of the sheets, indicating an acceptance of the higher quality and value of the imported sheets.

Issue 3: Confiscation of goods and imposition of redemption fine and penalty
The appellate authority rejected the appellant's appeal against the redemption fine and penalty. The argument presented was that the prime quality sheets were imported under the guise of re-rollable scrap, justifying the confiscation and penalties imposed.

Issue 4: Challenge to the quantum of redemption fine and penalty
The appellant contested the quantum of redemption fine and penalty, claiming that there was no evidence to suggest the prime quality sheets were intentionally included by the foreign supplier. The tribunal acknowledged this argument and reduced the redemption fine and penalty due to lack of evidence implicating the appellant directly.

In conclusion, while the presence of prime HR sheets in the re-rollable scrap was not disputed, the tribunal upheld the confiscation of goods but reduced the redemption fine and penalty due to insufficient evidence linking the appellant to the intentional inclusion of the prime quality sheets. The appeal was rejected except for the modifications in the quantum of redemption fine and penalty.