2022 (11) TMI 352 - AT - Customs

Misdeclaration of imported goods - Aluminium Extrusion Scrap (Tread) or Aluminium Tread grade (Aluminium sheet)? - Confiscation - redemption fine - penalty - HELD THAT - The assessment was made on the basis of the department s claim and the appellant have paid the duty. The said assessment was not challenged by the appellant therefore at this stage, the classification cannot be conclusively decided. However, for the purpose of redemption fine and penalty, a prima facie view has to be taken on the nature of goods. From the inspection report, it is observed that the goods was found attached with panel board of Aluminium Sheet or the fresh tradable goods. In this fact, it is found that it cannot be conclusively held that the goods are not Aluminium scrap. From the description such as panel board, it appears that the panel board is made up article of aluminium sheet, the panel board cannot be said to be fresh material or Aluminium sheet. It appears that the said goods is used material therefore, the same can be classified as aluminium scrap however, only a prima facie view is drawn on the nature of the goods at this stage as the classification of goods attained finality with the assessment of bill of entry and the same was not challenged - thus, considering the prima facie view about the goods and in the facts and circumstances of the present case, the redemption fine and penalty imposed by the lower authorities are very excessive and the same deserves to be reduced. The redemption fine is reduced from Rs.6 lacs to Rs.1 lac and penalty is reduced from Rs.2 lacs to Rs.35,000 - appeal allowed in part.

Summary

Issues:
Misdeclaration of goods - Aluminium Extrusion Scrap vs. Aluminium Tread grade, Confiscation of goods, Redemption fine, Penalty imposition, Prima facie view on the nature of goods.

Analysis:
The appeal was filed against an Order-In-Appeal passed by the Commissioner (Appeals), Kandla, imposing a redemption fine of Rs.6 lacs and a penalty of Rs.2 lacs on the appellant for misdeclaration of goods as Aluminium Extrusion Scrap (Tread) instead of Aluminium Tread grade (Aluminium sheet) as claimed by the department. The appellant declared the goods for melting purposes and paid the duty demanded by the department. The adjudicating authority focused on confiscation due to the appellant's request for waiver of show cause notice and personal hearing. The Commissioner (Appeals) upheld the decision, leading to the present appeal.

The appellant argued that although they paid the duty as demanded, the goods were not Aluminium Tread Grade but Aluminium Scrap, hence should not have been confiscated or penalized. The appellant cited various judgments in support of their case. The Superintendent (AR) reiterated the findings of the impugned order.

Upon review, the Tribunal found that while the classification of goods was based on the department's claim and not challenged by the appellant, a prima facie view on the nature of goods was necessary for redemption fine and penalty assessment. An inspection report indicated the goods were Aluminium Tread Grade with an attached panel board of Aluminium Sheet, suggesting the goods were used material and could be classified as scrap. The Tribunal concluded that the redemption fine and penalty were excessive, reducing them to Rs.1 lac and Rs.35,000, respectively.

In light of the above analysis, the impugned order was modified, and the appeal was partly allowed by the Tribunal. The decision was pronounced in open court on 04.11.2022.