1999 (10) TMI 360 - AT - Customs

Summary

Issues:
1. Confiscation of consignments of polyester blended yarn under Section 113-I of the Act.
2. Reliability of evidence from Silk & Art Silk Mills Industries Research Association (SASMIRA).
3. Applicability of Section 113 and clause 3(3) of the Export (Control) Order.
4. Allegations of duty evasion, confiscation, and penalty imposition.
5. Use of waste fiber in the manufacture of goods.
6. Interpretation of Export (Control) Order for confiscation.
7. Justification for redemption fine and penalty imposition.
8. Lack of reasons for penalty imposition and reduction of penalties.

Analysis:
1. The judgment pertains to appeals against the confiscation of polyester blended yarn consignments with an option for redemption and penalty imposition under Sections 113-I and 114 of the Act by the Principal Collector of Customs, Mumbai.
2. The appellants challenge the reliability of the evidence provided by SASMIRA, claiming that the yarn was made from waste fiber rather than virgin polyester fiber, and argue against the confiscation based on the goods not being dutiable or prohibited.
3. The Departmental Representative supports the Collector's order, emphasizing the use of waste fiber in manufacturing, which would have led to an undue benefit for the exporter, and disputes the appellant's interpretation of the Export (Control) Order.
4. The Tribunal finds sufficient evidence to support the use of waste fiber in the goods, based on expert reports and testimonies from company employees, leading to the affirmation of the goods being rightly liable to confiscation.
5. The Tribunal addresses the misapplication of clause 3(3) of the Export (Control) Order for confiscation, concluding that the typographical error does not invalidate the proceedings and upholds the confiscation.
6. The judgment justifies the redemption fine and penalty imposition due to the attempted misdeclaration under the DEEC scheme, highlighting the clear motive for misrepresentation and the significant duty evasion involved.
7. Regarding penalty imposition, the Tribunal reduces the penalties on the firm and Managing Director based on the acceptance of waste fiber usage but maintains the liability for penalty payment.
8. Ultimately, the appeals are allowed in part, acknowledging the reduction in penalties but upholding the confiscation and imposition of fines as justified based on the evidence and circumstances presented in the case.