2018 (12) TMI 1044 - AT - Customs

Penalty u/s 112(a) of CA - import of Polyester Waste - restricted item or not - Confiscation alongwith penalty - direction to re-export the goods - Held that - The appellant is a first time importer of Waste Polyester Ropes and have bonafidely filed the Bill of Entry under First Check Basis. We further find that as per the report of CRCL, the goods under import are old, dull white ropes of assorted length and sizes. The said ropes are composed of Polyester Plastic other than Polymide (Nylon). The goods are more appropriately classifiable under Chapter 63 - no case of mis-declaration or conscious effort to import restricted goods is made out - confiscation set aside - penalty also set aside - clearance for home consumption on payment of duty allowed - appeal allowed.

Summary

Issues:
1. Classification of imported goods as restricted items.
2. Justification of confiscation and penalty under Section 112(a) of the Act.
3. Direction for re-export of the goods.

Issue 1: Classification of imported goods as restricted items
The appeal revolved around the classification of Waste Nylon Rope imported by M/s. Desert Exim. The goods were initially classified under sub-heading 55051090 but were later found to be Waste Polyester Ropes. The Chemical Examiner's report confirmed the composition as polyester, not Nylon. The Technical Opinion of a Chartered Engineer further supported that the goods were not usable, leading to a reclassification under Chapter Heading 3915 of the Customs Tariff Act, making them restricted under Exim Policy 2015-2020.

Issue 2: Justification of confiscation and penalty under Section 112(a) of the Act
The Customs Act, 1962 was invoked to seize the goods under Section 110, alleging mis-classification and import contravention. Statements from the importer revealed lack of awareness regarding import restrictions and licensing requirements. The appellant was accused of attempting to import Polyester Waste without a valid license, leading to the imposition of penalties under Section 110 of the Act. The show cause notice proposed re-classification, confiscation, and a penalty, which was adjudicated in the impugned order-in-original.

Issue 3: Direction for re-export of the goods
The order-in-original re-classified the goods under CTH 3915 9041, with an option for redemption on payment of a fine. A penalty was imposed on the importer, and a directive was issued for the re-export of the goods within 45 days. The appellant challenged the order, arguing that the goods should be classified under Chapter 6310, where there are no import restrictions. The appellant's contention was based on the nature of the goods as textile items, which were considered Waste Polyester Ropes by CRCL.

In the final judgment, the Tribunal found that the appellant acted in good faith as a first-time importer and had filed the Bill of Entry under First Check Basis. The goods were reclassified under Chapter 63, indicating no deliberate attempt to import restricted items. Consequently, the confiscation and penalties were set aside, allowing clearance for home consumption on payment of duty. The goods were directed to be released promptly upon duty deposit, marking the resolution of the appeal on 17/12/2018.