Conscious misdeclaration must be proved before confiscation and penalty can stand in scrap import cases.

Import documents consistently described the consignment as heavy melting scrap, and the examination revealed used, dead and rusted empty cartridges or artillery shells with no reliable proof of concealment or conscious misdeclaration. On that factual basis, the tribunal held that confiscation of the goods and of the scrap used as packing material, together with consequential penalties, was not sustainable under customs law. The impugned confiscation order and penalties were therefore set aside, and the appeals succeeded in full.

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Issues: Whether the import of heavy melting scrap containing used and rusted empty cartridges or artillery shells was mis-declared or illegally imported so as to justify confiscation and penalties.

Analysis: The goods were described consistently in the commercial documents, bill of lading, invoice, packing list, sales confirmation and pre-shipment inspection certificate as heavy melting scrap. The material found on examination was used, dead, rusted and totally discharged, and there was no reliable basis to hold that the appellants knowingly suppressed the presence of prohibited or restricted goods. In the absence of proof of concealment or conscious misdeclaration, confiscation of the imported goods and the scrap used as packing material, as well as the consequential penalties, could not be sustained.

Conclusion: The confiscation order and the penalties were unjustified and were set aside in favour of the appellants.

Final Conclusion: The appeals succeeded and the impugned order was quashed in its entirety.

Ratio Decidendi: Where the import documents consistently describe the goods as permissible scrap and the alleged objectionable material is used, dead and rusted without proof of concealment or conscious misdeclaration, confiscation and penalty under the Customs Act are not warranted.

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