2020 (1) TMI 642 - AT - Customs

Classification of imported goods - nature of scrap - Shredded Aluminium 6063 Extrusion Scrap Tread - As against declaration of shredded Aluminium scrap the goods found appeared to be remnant ends of ingots/ billets obtained during the extrusion process - HELD THAT - We have perused the panchnama dated 19.02.2009, wherein the goods have been described as The cargo was mainly consisted of oval and cylindrical pieces of aluminium alloy. The thickness of the said pieces varied from approximately 2 to 21/4 (feet) and the diameter varied from 6 (inches) to 1 (feet). From the examination conducted as per the above said panchnama, we have no hesitation in holding that the goods imported goods were not shredded aluminium scrap as declared by the appellants. We agree with the findings recorded by the Commissioner that imported goods have been misdeclared in terms of description and hence are liable for confiscation under Section 111 (d) and (m) of the Customs Act, 1962 - the order of Commissioner confiscating the goods is upheld and goods allowed to be redeemed on the payment of redemption fine - Looking into the total assessable value declared, i.e. ₹ 41,89,569.89/- by the appellants, the redemption fine of ₹ 7,00,000/- is not found to be excessive and is upheld. Penalty - HELD THAT - For the act of omission and commission leading to misdeclaration of goods and there confiscation, under Section 111(d) and (m) of Customs Act, 1962, appellants have been held liable to penalty under Section 112(a) of Customs Act, 1962. Commissioner has imposed penalty of ₹ 3,00,000/- - the ends of justice will be met if the penalty is reduced to ₹ 2,00,000/-. Appeal allowed in part.

Summary

Issues:
Classification of imported goods under CTH 76020090, confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962, imposition of a fine for redemption, imposition of penalty under Section 112(a) of the Customs Act, 1962.

Classification of Imported Goods:
The appellants imported goods declared as "Shredded Aluminium 6063 Extrusion Scrap 'Tread'". However, upon examination, the goods were found to be cylindrical and oval pieces of aluminum alloy, not matching the declared description. The goods were considered to be remnant ends of ingots/billets from the extrusion process, more appropriately falling under the description of "Tata" as per the ISRI Scrap Circular. The Commissioner concluded that the goods were misdeclared, leading to confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962.

Nature of Scrap:
The dispute centered around the nature of the imported goods, with the appellants arguing that the goods were scrap and citing previous decisions to support their claim. The revenue contended that the goods did not match the declared description and were misdeclared, leading to the confiscation order. The Tribunal agreed with the Commissioner's findings that the imported goods were misdeclared and upheld the confiscation order.

Penalty Imposition:
The appellants were held liable for penalty under Section 112(a) of the Customs Act, 1962, for the misdeclaration of goods and their confiscation. The Commissioner imposed a penalty of &8377; 3,00,000, which the Tribunal deemed excessive. The Tribunal reduced the penalty to &8377; 2,00,000, stating that it would meet the ends of justice. The rest of the impugned order was upheld except for this modification.

In conclusion, the Tribunal partially allowed the appeal, reducing the penalty imposed under Section 112(a) while upholding the confiscation of goods and the redemption fine. The decision was based on the misdeclaration of imported goods, their classification under a different category than declared, and the corresponding penalties under the Customs Act, 1962.