Import restriction on scrap goods led to confiscation, while redemption fine was reduced and penalty deleted for lack of deliberate violation.

Import of stainless steel scrap after a Public Notice restricting shredded metallic scrap was held liable to confiscation because compliance was assessed by reference to the shipment date, and non-shredded scrap fell within the prohibition. The Tribunal upheld confiscation under customs law. It also found the redemption fine excessive on the facts and reduced it. Penalty was deleted because there was no material showing deliberate defiance of law by the importer. The operative principle is that where the import restriction is in force on the shipment date, non-compliant goods are confiscable, but penalty requires proof of wilful violation and any redemption fine must be proportionate.

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Issues: (i) whether the imported stainless steel scrap was liable to confiscation for violation of the import restriction on shredded metallic scrap; (ii) whether the redemption fine and penalty required modification.

Issue (i): Whether the imported stainless steel scrap was liable to confiscation for violation of the import restriction on shredded metallic scrap.

Analysis: The import restriction in the relevant Public Notice applied to shredded metallic scrap, and the shipment in question was made after the notice came into force. Since the shipment date was the material date for determining compliance, the import of non-shredded scrap fell within the prohibition and attracted confiscation under customs law.

Conclusion: The confiscation was upheld, against the assessee.

Issue (ii): Whether the redemption fine and penalty required modification.

Analysis: The Tribunal found that the fine in lieu of confiscation was excessive in the circumstances and reduced it. On penalty, there was no material to show deliberate defiance of law by the importer, so penalty was not justified.

Conclusion: The redemption fine was reduced and the penalty was set aside, in favour of the assessee.

Final Conclusion: The order sustaining confiscation was maintained, but the monetary consequences were substantially reduced and the penalty was deleted.

Ratio Decidendi: Where the relevant import restriction is in force on the shipment date, non-compliant goods are liable to confiscation; penalty requires material showing deliberate violation, while redemption fine must be proportionate to the facts.

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