2017 (11) TMI 1433 - AT - Customs

Redemption fine - penalty - benefit of N/N. 21/2002-Cus. dated 1.3.2002 - the goods were examined and it was found that the goods contained copper scrap in wire forms, clippings and punchings which are Berry, Birch and Candy varieties - Held that - the reply to the SCN in which the appellant has explained that the supplier on their own dispatched copper scrap, even though appellant placed orders for HMS scrap only. That the appellant had filed Bill of Entry on the basis of such documents and that they had no malafide intention to mis-declare or undervalue the goods. He submitted that the differential duty involved is only ₹ 5,53,736/- - quantum of redemption fine and penalty reduced - appeal allowed in part.

Summary

Issues:
1. Classification of imported goods and eligibility for customs duty exemption.
2. Alleged misdeclaration of goods leading to confiscation, redemption fine, and penalty.

Issue 1: Classification of imported goods and eligibility for customs duty exemption
The appellant filed a Bill of Entry declaring heavy melting scrap but upon examination, it was found to contain copper scrap, attracting a higher rate of customs duty. The original authority denied the exemption claimed and redetermined the value, ordering confiscation with a redemption fine and penalty. The appellant challenged the redemption fine and penalty, arguing no malafide intention to mis-declare. The Tribunal considered the differential duty involved and reduced the redemption fine and penalty, maintaining the rest of the original order. The appeal was partly allowed, modifying the impugned order accordingly.

Issue 2: Alleged misdeclaration of goods leading to confiscation, redemption fine, and penalty
The appellant's challenge focused on the redemption fine and penalty imposed concerning the copper scrap found in the imported goods. The appellant explained that the supplier dispatched copper scrap despite orders for heavy melting scrap only, leading to the discrepancy. The Tribunal acknowledged the explanation, noting the lack of malafide intention to mis-declare or undervalue the goods. Considering this aspect, the Tribunal found the redemption fine and penalty excessive and reduced them. The redemption fine for the copper scrap was reduced to ?2,50,000, and the penalty was reduced to ?1,50,000, without altering the rest of the original order. The Tribunal partly allowed the appeal and provided consequential relief, if any.

This detailed analysis of the judgment covers the issues of classification of imported goods, eligibility for customs duty exemption, alleged misdeclaration of goods, confiscation, redemption fine, and penalty. The Tribunal's decision focused on the discrepancy between the declared heavy melting scrap and the actual presence of copper scrap, leading to a reduction in the redemption fine and penalty due to the lack of malafide intent in the misdeclaration.