1992 (6) TMI 105 - AT - Customs

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Legality of confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962.
3. Appropriate order regarding redemption fine.

Issue-wise Detailed Analysis:

1. Violation of Principles of Natural Justice:
The appellant contended that the test report from the Custom House was not provided to them, denying them the opportunity to contradict it. They also argued that they were not allowed to cross-examine the person who conducted the test. The appellant relied on the Calcutta High Court decision (1967 AIR Calcutta 200), where it was held that non-provision of the test report violated natural justice principles. However, in this case, the Tribunal found that the appellant did not request the test report or dispute its correctness in their reply to the show cause notice. The show cause notice contained the test report's substance, which the Supreme Court in AIR 1976 S.C. 143 (City Corner v. Personal Asstt. to Collector) deemed sufficient for making a representation. Therefore, the Tribunal concluded that there was no violation of natural justice principles.

2. Legality of Confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962:
The appellant argued that the adjudicating authority did not consider the foreign supplier's test report, which described the goods as terneplates. However, the adjudicating authority found that the foreign test report did not indicate the goods were coated with lead or an alloy of tin and lead, which is necessary for classification as terneplate. The Custom House laboratory's test revealed the goods were mild steel coated with tin, classifying them as tinplates, not terneplates. The appellant did not challenge this test report or request cross-examination of the tester. Consequently, the Tribunal upheld the adjudicating authority's decision that the goods were not permissible under OGL and their confiscation under Sections 111(d) and 111(m) for unauthorized import and misdeclaration was justified.

3. Appropriate Order Regarding Redemption Fine:
The Tribunal acknowledged that the appellant is a small SSI unit and the proprietor is a retired Army person facing financial trouble due to the heavy redemption fine. Considering the CIF value of the goods (approximately Rs. 3 lakhs), the Tribunal found the redemption fine of Rs. 1 lakh in each case excessive. Therefore, it reduced the redemption fine to Rs. 75,000 in each case, granting the appellant consequential reliefs.

Conclusion:
The appeals were dismissed with a modification in the redemption fine, reducing it to Rs. 75,000 in each case from Rs. 1 lakh. The Tribunal found no violation of natural justice principles and upheld the legality of the goods' confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962.