2019 (1) TMI 836 - AT - Customs

Misdeclaration of imported goods - hot/cold rolled stainless steel, coils/sheets grade 304 - confiscation - penalty - Held that - We have perused the certificate dated 17.09.2009 issued by overseas supplier of goods and also End-use certificate dated 15.01.2010 issued by the Jurisdictional Range Superintendent. Both the certificates confirmed to the fact that the goods imported by the appellant were scrap items only and used for melting purpose in the induction furnace, for further manufacture of the final products. We also find that the department had not sought for any assistance from the technical expert in the field to ascertain whether goods in question were scrap or some other articles, which were not usable for melting purpose. However, decision with regard to nature of the goods cannot be ascertained by eye estimate and an expert opinion is required for ascertaining such facts. Thus we are of the view that customs examination report, without obtaining the expert opinion, cannot be the reason to determine the nature of goods and that mere agreement by the appellant or his employee with the contents of such examination report cannot be considered as conclusive proof in support of claim of revenue regarding confiscation of goods, payment of fine and penalty. Redemption fine and penalty not imposable - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the subject goods are liable for confiscation and if the authorities were justified in imposing fine and penalty on the appellant.

Analysis:
The appeal was against an order passed by the Commissioner of Customs (Appeals), Mumbai-II. The appellant, engaged in manufacturing steel products, had imported goods under a contract but faced allegations of mis-declaration. The department initiated show cause proceedings proposing confiscation, re-determination of value, and imposition of penalties. The initial order confiscated goods, re-determined their value, and imposed penalties. On appeal, the Commissioner reduced the redemption fine and penalty. The Commissioner held that the appellant mis-declared goods to evade duty, as technical opinions were not sought and the goods were accepted without verification. The appellant argued that the imported goods were used in manufacturing and melting steel billets, supported by an End-use certificate. The appellant claimed that no expert opinion was obtained to ascertain the nature of goods. The Revenue argued that discrepancies justified confiscation and penalties.

The Tribunal reviewed certificates confirming the goods were scrap items used for melting and manufacturing final products. It noted the lack of expert opinion to determine the nature of goods. Referring to a previous order in favor of the appellant, the Tribunal emphasized the need for expert opinion in such cases. It stated that customs examination reports alone cannot determine goods' nature without expert input. Mere agreement with examination reports does not conclusively support revenue's claim for confiscation, fines, and penalties. The Tribunal found no merit in the impugned order confirming fines and penalties, setting them aside and allowing the appeal in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of expert opinions in determining the nature of imported goods. The lack of expert input undermined the justification for confiscation, fines, and penalties. The Tribunal's decision highlighted the necessity for thorough assessments in customs cases, emphasizing the need for expert analysis to support claims of mis-declaration or evasion of duties.