X

Imposition of penalty not justified in absence of motive to mis-declare goods

All the three appeals are arising out of the same impugned order passed by the Commissioner (Appeals) and as such, are being disposed of by a common order.

M/s. Regal Alloys Pvt. Limited Vs Commissioner of Customs (Cestat Chandigarh)

Admittedly the consignment was purchased by the appellant on high see sale basis and all the documents describe the goods as Heavy Melting scrap. The appellant have placed on record the invoices, packing list as also the pre-shipment inspection certificate issued by Geo Chem as also the bill of lading, describing the goods as Heavy Melting scrap. In such a scenario, to attribute any motive to the appellant to mis-declare the goods is neither warranted nor justified, inasmuch as the appellant would not be knowing the contents of the containers. As such, any imposition of penalty upon them is not justifiable.

As regards confiscation of the goods, we note that the appellant had taken a categorical stand that re-rollable material is not usable as such and was in the nature of waste and scrap only. It is seen that the adjudicating authority has also classified the same under the heading which is of waste and scrap. As the entire documents show the consignment to be a Heavy Melting scrap, the presence of re-rollable material will not convert the consignment from Heavy Melting scrap to re-rollable materials. The bill of lading issued by the foreign supplier along with pre-shipment certificate, the packing list and invoice raised by the foreign supplier, indicate that the goods sent by them are only Heavy Melting scrap. In such a scenario, the confiscation of the goods is not called for. Reference can be made to the Tribunal decision in the case of Kuber Casting Pvt. Limited vs. CC, Amritsar 2016 (339) ELT 264 (Tri. Chennai), wherein, in identical situation, the confiscation of the goods was set-aside by observing that the order was placed for Heavy Melting scrap only and the foreign supplier has sent Heavy Melting scrap only, the presence of re-rollable scrap will not convert the consignment into anything other than Heavy Melting scrap, thus justifying confiscation of the same.

FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-

All the three appeals are arising out of the same impugned order passed by the Commissioner (Appeals) and as such, are being disposed of by a common order.

2. As per facts on record, the appellant imported Heavy Melting Scrap and filed three bills of entry. Such scrap was purchased by the appellant from one M/s. Padamshree Globe Tradelink Pvt. Limited on high see sale basis. The bills of entries were filed under claim of exemption under Notification No. 12/2012 dated 17.03.2012 (Serial No. 332), at declared price as Rs. 380 per MT.

3. The consignment was examined by the Anti Smuggling officers of Ludhiana unit and it was found that the same also contained re-rollable materials, apart from the Heavy Melting scrap. As such, a view was entertained that inasmuch as, re-rollable material has been imported along with scrap, the benefit of exemption notification is not available and the same has to pay duty, in terms of serial No. 330 of Notification No. 12/2012. Accordingly, proceedings were initiated against them resulting in passing of the impugned orders by the original adjudicating authority.

4. The appellant filed appeals before Commissioner (Appeals) contending that the re-rollable materials are not of prime quality and they are imported as scrap only. The same has been classified by the original adjudicating authority under heading 7204 49 00, which is the classification of waste and scrap and in such a scenario, re-rollable material, if any, has to be extended the benefit of exemption, in terms of serial No. 332 of the notification. It was also contended that all the documents are declaring the goods as Heavy Melting scrap and inasmuch as the appellant has procured the consignments on high see sale basis, he filed the bills of entry based upon the description of the goods in the said documents. In such a scenario, to impose redemption fine and penalty, is not justified.

5. However, the Commissioner (Appeals) did not find favour with the above contention of the appellant and rejected their appeal.

6. After hearing both the sides duly represented by Shri Sudhir Malhotra, ld. Advocate for the appellants and Shri V.K. Tehran for the Revenue, we note that admittedly the consignment was purchased by the appellant on high see sale basis and all the documents describe the goods as Heavy Melting scrap. The appellant have placed on record the invoices, packing list as also the pre-shipment inspection certificate issued by Geo Chem as also the bill of lading, describing the goods as Heavy Melting scrap. In such a scenario, to attribute any motive to the appellant to mis-declare the goods is neither warranted nor justified, inasmuch as the appellant would not be knowing the contents of the containers. As such, any imposition of penalty upon them is not justifiable.

7. As regards confiscation of the goods, we note that the appellant had taken a categorical stand that re-rollable material is not usable as such and was in the nature of waste and scrap only. It is seen that the adjudicating authority has also classified the same under the heading which is of waste and scrap. As the entire documents show the consignment to be a Heavy Melting scrap, the presence of re-rollable material will not convert the consignment from Heavy Melting scrap to re-rollable materials. The bill of lading issued by the foreign supplier along with pre-shipment certificate, the packing list and invoice raised by the foreign supplier, indicate that the goods sent by them are only Heavy Melting scrap. In such a scenario, the confiscation of the goods is not called for. Reference can be made to the Tribunal decision in the case of Kuber Casting Pvt. Limited vs. CC, Amritsar 2016 (339) ELT 264 (Tri. Chennai), wherein, in identical situation, the confiscation of the goods was set-aside by observing that the order was placed for Heavy Melting scrap only and the foreign supplier has sent Heavy Melting scrap only, the presence of re-rollable scrap will not convert the consignment into anything other than Heavy Melting scrap, thus justifying confiscation of the same.

8. In view of the foregoing, we find no merit in the Revenue’s stand and accordingly set-aside the impugned orders and allow all the three appeals.

(Order dictated and pronounced in the court) 

Categories: Custom Duty
X

Headline

Privacy Settings