2015 (6) TMI 860 - SC - Customs

Levy of penalty and redemption fine - Classification of goods - Non-alloy melting scrap or Non-alloy steel re-rollable scrap - Held that - We find that this is an old appeal of 2003 and the appellant before us is a small scale industry on whom penalty of rupees six lakhs has been levied. Without going into any further details, we find that since the goods (post confiscation) have since been sold, it would be in the interest of justice to set aside the penalty of rupees six lakhs while otherwise maintaining the order of the learned technical Member and the learned third Member. This is also in the fitness of things considering that the National Metallurgical Laboratory had differed from the other expert opinions and therefore there were two views possible. - redemption find confirmed - penalty waived - Decided partly in favour of assessee.

Summary

Issues: Conflict of opinion among Tribunal Members, Imposition of redemption fine and penalty, Appeal against the decision of the Tribunal.

In this case, the appellant highlighted a conflict of opinion among the Members of the Tribunal regarding the classification of imported goods. The learned Judicial Member directed a remand to the Commissioner of Customs based on technical expert opinion that the items were non-alloy melting scrap, not non-alloy steel re-rollable scrap. However, the learned technical Member disagreed, giving preference to the expert opinion of the National Metallurgical Laboratory over other individual opinions. The third Member sided with the technical Member, leading to the appeal before the Supreme Court.

Regarding the imposition of redemption fine and penalty, the technical Member found the goods to be mis-declared, making them confiscable. The redemption fine and penalty were upheld as not excessive, leading to the dismissal of the appeal by the technical Member and the third Member. The appellant, a small-scale industry, was penalized with a significant amount.

During the Supreme Court proceedings, the appellant's counsel supported the Judicial Member's judgment, while the Revenue's counsel backed the decisions of the technical Member and the third Member. The Court acknowledged the age of the appeal and the financial burden on the appellant.

Ultimately, the Supreme Court decided to set aside the penalty while upholding the technical Member and the third Member's decision, considering the conflicting expert opinions. The Court found it just to remove the penalty due to the sale of the goods post-confiscation. No costs were awarded in this matter, and the appeal was disposed of accordingly.