Misdeclaration by nomenclature alone does not justify confiscation or penalty when imported goods are otherwise permissible and duty-free.

Confiscation and penalty were unwarranted where imported goods were in substance old, used and damaged transformers treated as scrap, and the only discrepancy was one of description. The HC noted that no duty was confirmed, the importer was otherwise entitled to import the goods, and the alleged misdeclaration or undervaluation conferred no benefit on the importer. In those circumstances, the nomenclature difference did not justify penal action, and the revenue challenge failed because the Tribunal's order disclosed no legal infirmity or substantial question of law.

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Issues: Whether confiscation of the imported goods and imposition of penalty were justified where the goods were described as scrap instead of old and used transformers, but no duty was payable and the importer was otherwise entitled to import such goods.

Analysis: The goods imported by the respondent were found to be old, used and damaged transformers, which in the context of the respondent's business of manufacturing recycled metal scrap were treated as scrap in substance. The difference between describing the goods as scrap or as old and used transformers was only one of nomenclature. No demand of duty was confirmed, and the respondent was eligible to import the goods in question. In that situation, the alleged misdeclaration and undervaluation did not lead to any benefit to the respondent and did not furnish a basis to sustain confiscation or penalty.

Conclusion: The confiscation and penalty were not justified, and the revenue's challenge failed.

Final Conclusion: The appeal was dismissed because the Tribunal's order suffered from no legal infirmity and the dispute did not raise any substantial question of law.

Ratio Decidendi: Where the imported goods are otherwise permissible, no duty is payable, and the difference in description is merely one of nomenclature without resulting benefit to the importer, confiscation and penalty for misdeclaration are not warranted.

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