DGFT clarification on zinc dross imports was denied; confiscation stood, while the customs penalty was reduced.

Import of zinc dross was not shown to fall within the DGFT clarification, because that relief applied only where the firm contract pre-dated 25-3-96 and shipment occurred within the stipulated period. Alterations in the sale contract, bill of lading and sailing particulars, together with records recovered from the appellant's premises and the shipping agent, undermined the claim to the earlier policy benefit. On those facts, confiscation of the goods was justified. The penalty under Section 112(a) of the Customs Act was nevertheless reduced in view of the circumstances and the value of the goods.

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Issues: Whether the import of zinc dross was covered by the DGFT clarification so as to avoid confiscation, and whether the penalty imposed under Section 112(a) of the Customs Act required interference.

Analysis: The relevant clarification applied only where the firm agreement had been entered into prior to 25-3-96 and the goods were shipped within the stipulated period. The documents recovered from the appellant's premises and the shipping agent's record showed alterations in the date of the sale contract, bill of lading, and sailing particulars, indicating that the original documents did not support the appellant's claim to the benefit of the earlier policy. On those facts, the confiscation of the goods was justified. However, considering the circumstances and the value of the goods, the penalty warranted reduction.

Conclusion: Confiscation of the goods was upheld. The penalty under Section 112(a) of the Customs Act was reduced to Rs. 50,000.

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