2006 (7) TMI 83 - AT - Customs

Customs Tribunal Upholds Confiscation Orders, Adjusts Redemption Fine and Penalty

KESARI STEELS LTD. Versus COMMISSIONER OF CUSTOMS, KANDLA

The Tribunal upheld the Commissioner of Customs' orders for the confiscation of goods due to failure to produce required documents under the Foreign Trade ... Confiscation and Penalty – Alleged that appellant have not furnished the relevant document for clearance of goods – Authority find the allegation right and accordingly penalty and redemption fine imposed on him Issues:- Interpretation of Foreign Trade Policy regarding import of metal scrap- Confiscation of goods for failure to produce required documents- Imposition of redemption fine and penalty under Customs ActInterpretation of Foreign Trade Policy regarding import of metal scrap:The judgment dealt with three appeals involving High Seas buyers of Heavy Melting Scrap, which was freely importable goods before the amendment of the Foreign Trade Policy. The policy required specific documents, including a pre-shipment inspection certificate, to be furnished at the time of clearance of goods. In this case, the importers did not provide the Sale Contract document but submitted a pre-shipment certificate not issued by the specified agency. Although no incriminating material was found in the consignment during examination, the Commissioner of Customs ordered confiscation of goods and imposed fines and penalties under the Customs Act.Confiscation of goods for failure to produce required documents:The appellants disputed the confiscation of goods and the imposition of penalties, arguing that the consignment did not contain any incriminating material despite the procedural lapse of not obtaining the pre-shipment certificate from the specified authority. They contended that the purpose of the certificate was to ensure the absence of prohibited items in the consignment. The judgment emphasized strict adherence to the specified procedures under the Trade Policy, stating that deviations were not permissible based on individual choices. The Tribunal found no error in the Commissioner's orders regarding confiscation but considered the redemption fine and penalty to be disproportionate to the offense committed. The penalties were modified to 5% of the goods' value for redemption fine and 2.5% for penalty, deeming them appropriate for the situation.Imposition of redemption fine and penalty under Customs Act:After hearing arguments from both sides and considering the provisions of the amended Foreign Trade Policy, the Tribunal concluded that penalties were warranted despite the appellants' lack of innocence or proof thereof. The judgment highlighted that importers were expected to be aware of the goods being imported and the required procedures. It was determined that penalties were justifiable, and modifications were made to the redemption fine and penalty percentages. The decision cited by the appellants in support of setting aside penalties was deemed inapplicable to the present appeals. Ultimately, the Tribunal upheld the impugned orders with modifications to the fines and penalties, ensuring compliance with the law and justice.