2016 (6) TMI 146 - AT - Customs

Mis-declaration of goods imported - goods declared as old and used petrol engines claimed as scrap by the appellant - Revenue on inspection found that the goods are not scrap and hence, held as second-hand machinery, which requires license from DGFT as per EXIM Policy 2002-2007 - Confiscation in lieu of redemption fine and imposition of penalty - Section 111(d) and 112(a) of the Customs Act, 1962 - Held that - The report of Rane Engineers and Surveyors, government registered chartered engineers states that the consignment is in damaged condition and none of the engine can be used as it is not re-conditioned nor do the engines have any residual life even if they are overhauled. On the face of such categorical observation of the government registered chartered engineers, there is nothing on records to show that the imported consignment is second-hand machinery. Therefore, the declaration made by the appellant in the Bill of Entry also indicates that they had imported the consignment as scrap which is obvious from the fact that Bill of Entry indicates the quantity in Kgs. Hence, the impugned order of the lower authorities, is incorrect and unsustainable. Accordingly, the order of confiscation and penalty is set aside. At the same time, the order directing the re-export of the said consignment is upheld as it was on request of the importer. - Decided in favor of assessee.

Summary

Issues: Mis-declaration of imported goods as scrap, confiscation under Customs Act, penalty imposition, re-export permission

In this judgment by the Appellate Tribunal CESTAT Mumbai, the issue revolved around the mis-declaration of goods imported by the appellant as scrap when they were actually second-hand machinery. The adjudicating authority confiscated the goods under Section 111(d) of the Customs Act, 1962, with an option for redemption upon payment of a fine and imposed a penalty under Section 112(a) of the same Act. The appellant had also sought re-export of the goods. The first appellate authority upheld the decision. However, upon review, the Tribunal found that the lower authorities had not considered the issue properly. An inspection report by government registered chartered engineers stated that the imported engines were damaged and not usable, contradicting the classification as second-hand machinery. The Tribunal noted that the appellant had declared the goods as scrap in the Bill of Entry, further supporting their argument. Consequently, the Tribunal set aside the confiscation and penalty orders, but upheld the re-export directive based on the importer's request.

Overall, the Tribunal concluded that the lower authorities had erred in their decision-making process by not adequately considering the inspection report and the appellant's declaration in the Bill of Entry. The judgment emphasized the importance of proper evaluation of evidence in determining the nature of imported goods and highlighted the significance of accurate declarations in import documentation. The decision to allow re-export was based on the importer's request and was deemed appropriate in the circumstances.