Confiscation upheld for duty-free steel imports, penalty waived, and fine reduced for EOU

The Tribunal upheld the confiscation of duty-free HR Steel Coils/Strips imported at ICD Ludhiana due to contravention of licensing notes under ITC (HS) Chapter 72. While recognizing the import restrictions, the penalty was waived, and the redemption fine reduced to Rs. 1,00,000 for the appellant, a 100% EOU, under Notification No.52/2003-CUS.

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Issues: Import of defective HR Steel Coils/Strips at ICD Ludhiana in contravention of licensing notes under ITC (HS) Chapter 72. Confiscation of goods, imposition of penalty, and clearance under Notification No.52/2003-CUS.

Analysis:
1. The appellant, a 100% EOU, imported duty-free HR Steel Coils/Strips at ICD Ludhiana under Notification No.52/2003-CUS. Customs Authorities confiscated the goods, citing contravention of licensing notes under ITC (HS) Chapter 72, which restricts import of defective HR Coils/Strips to certain sea ports.

2. The appellant argued that as an EOU, they were eligible for fast track clearance per handbook provisions and Circular No.63/97-CUS. They contended that since the procurement certificates allowed import at ICD Ludhiana, the licensing note restrictions should not apply, challenging the confiscation and penalty.

3. The Respondent defended the confiscation, emphasizing the licensing note's specific port requirements for importing defective HR Coils/Strips. Despite the procurement certificates, the import at ICD Ludhiana was deemed contrary to Exim policy, justifying the confiscation and penalty under Customs Act sections 111(d) and 112(a).

4. The Tribunal acknowledged the licensing note's port restrictions under ITC (HS) Chapter 72 and upheld the confiscation due to the goods being imported at ICD Ludhiana against the prescribed sea ports. However, considering the circumstances, the penalty was waived, and the redemption fine reduced to Rs. 1,00,000, modifying the impugned order accordingly.

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