2018 (2) TMI 241 - AT - Customs

Import of restricted item - iron steel plates which were secondary hot rolled sheets in different sizes and thickness - Department took the view that the goods being seconds, they cannot be imported through Tuticorin port in view of the restrictions in para-4 of the Import Licensing Notes to Chapter 72 of ITC (HS). - Held that - In a situation, where importers themselves have admitted, not only before the adjudicating authority, but also before the lower appellate authority, that the imported goods are nothing but seconds, it also means that they are in agreement with the outcome of examination of the goods conducted by the department. In such a situation, where the nature of the goods as imported, is not being contested by the importer, there may not be any requirement of getting the goods tested. Viewed in this light, the appellant cannot now argue that the goods were actually prime, or for that matter, that the goods have not been proved to be seconds by the department by way of test etc. - the goods held as seconds and duty liability thereon upheld. Redemption fine - penalty - Held that - appellants have been fair in admitting before both the lower authorities that the goods are seconds. They have also conveyed that what has arrived is seconds because of mistake of despatch and they have only ordered for primary goods - the quantum of redemption fine and penalty reduced. Appeal allowed in part.

Summary

Issues:
- Declaration of imported goods as seconds
- Confiscation of goods under Customs Act
- Imposition of redemption fine and penalty
- Dispute over nature of imported goods
- Admittance of imported goods being seconds
- Reduction of redemption fine and penalty

Analysis:

1. Declaration of imported goods as seconds:
The case involved the import of iron steel plates declared as seconds instead of prime quality goods. The department contended that importing seconds through a specific port was restricted and would not qualify for certain benefits. The original authority confiscated the goods valued at a specific amount and imposed a fine and penalty on the appellant. The Commissioner (Appeals) later reduced the redemption fine and penalty but upheld the rest of the original order.

2. Confiscation of goods under Customs Act:
The original authority confiscated the goods under Sections 111 (o) & (m) of the Customs Act, 1962, due to the nature of the imported goods being seconds. The appellant was allowed to redeem the goods upon payment of a fine and was also imposed a penalty under Section 112 (a) of the Act.

3. Imposition of redemption fine and penalty:
The appellant raised concerns over the abnormally high redemption fine and penalty imposed compared to the allegations in the show cause notice. The Tribunal considered the appellant's arguments and the department's submissions regarding the nature of the imported goods.

4. Dispute over nature of imported goods:
The appellant argued that there was no finding on whether the goods were actually prime or seconds and that no testing was conducted by Customs to determine their nature. The Tribunal considered the appellant's reliance on a previous decision and the department's response regarding the appellant's own admission about the nature of the goods.

5. Admittance of imported goods being seconds:
The Tribunal noted that the appellant admitted before the adjudicating authority and the lower appellate authority that the imported goods were seconds, despite ordering prime quality goods. The appellant did not dispute the duty liability but sought leniency in the imposition of redemption fine and penalty.

6. Reduction of redemption fine and penalty:
Considering the appellant's admission regarding the nature of the imported goods, the Tribunal found merit in reducing the redemption fine and penalty. The Tribunal reduced the redemption fine and penalty to ensure justice, taking into account the appellant's acknowledgment of the mistake in the dispatch of goods.

In conclusion, the Tribunal partially allowed the appeal by reducing the redemption fine and penalty, based on the appellant's admission and the circumstances surrounding the importation of seconds instead of prime quality goods.