1995 (9) TMI 129 - AT - Customs

Summary

Issues:
Appeal against the order of Additional Collector of Customs regarding the import of pre-mutilated synthetic rags, confiscation of woollen garments, and imposition of penalty.

Detailed Analysis:

Issue 1: Confiscation of Goods
The Additional Collector ordered the absolute confiscation of woollen garments and allowed the clearance of synthetic garments and improperly mutilated woollen rags upon further mutilation. The appellant argued that the examination report showed 70% of the goods were mutilated, and cited legal precedents to challenge the confiscation order. The Departmental Representative supported the confiscation order, relying on a different legal decision. The Tribunal found that only a small percentage of the goods were not mutilated, indicating bona fide intent. The Tribunal held that there was no basis for absolute confiscation and set aside the order, permitting the release of the goods after proper mutilation.

Issue 2: Legal Authority for Public Notices
The appellant contested the reliance on public notices issued by the Collector of Customs, arguing that the Collector lacked the authority to issue such notices under the Imports and Exports (Control) Act. Legal precedents were cited to support this argument. The Tribunal noted that the public notices issued by the Collector specified the standards for pre-mutilated rags but held that the Collector was not the appropriate authority to define such standards. The Tribunal referred to Section 24 of the Customs Act, which allows Customs Authorities to order the mutilation of goods capable of multiple uses, independent of import policy provisions.

Issue 3: Imposition of Penalty
The Additional Collector imposed a penalty of Rs. 70,000 on the appellant. The appellant challenged the penalty along with the confiscation order. The Tribunal, after considering the examination report and the percentage of properly mutilated goods, concluded that the penalty was not justified. The Tribunal set aside the penalty imposed on the appellant.

Conclusion:
The Appellate Tribunal set aside the order of absolute confiscation of woollen garments, permitted the release of goods after proper mutilation, and revoked the penalty imposed on the appellant. The Tribunal clarified the legal authority for defining standards of pre-mutilated goods and emphasized the need for proper examination and assessment before confiscation and penalty imposition.