2018 (3) TMI 562 - AT - Customs

Tribunal decision: TMT rods misdeclaration upheld, fines reduced based on intent.

M/s. Bee Path Castings Pvt. Ltd. Versus CCE, Tuticorin

The Tribunal upheld the department's findings that the imported goods were TMT rods, not heavy melting scrap as declared. Despite maintaining the duty ... Mis-declaration of imported goods - Heavy Melting Scrap - Held that: - The department after examination has concluded that these are reusable TMT rods and do not fall under the description of scraps - demand upheld. Taking into consideration the facts of the case and pleading of the appellant that they had entered into an agreement with the supplier for supply of scrap only, it is found that the redemption fine and penalty imposed is on the higher side and requires to be reduced. Appeal allowed in part. Issues:Mis-declaration of imported goods, demand of duty, imposition of penalties, classification of goods, reduction of redemption fine and penalty.Analysis:The appellants declared imported goods as 'Heavy Melting Scrap' but were found to be TMT rods upon examination, leading to a show cause notice alleging mis-declaration, duty demand, and penalties. The Original authority rejected the declared description, ordered confiscation with an option to redeem on payment of a fine, and imposed a penalty. The Commissioner (Appeals) reduced the redemption fine and penalty. The Tribunal heard arguments from both sides.The appellants argued that the imported materials were intended to be used as scrap, supported by the agreement with the buyer for heavy melting scrap. They claimed the department did not provide substantial evidence to prove the goods were not scraps but TMT rods. They requested setting aside the redemption fine and penalty due to their intention to import scrap only.The department, on the other hand, reiterated the examination findings that the goods were TMT rods, not heavy melting scrap as declared. They highlighted that second-hand goods, except capital goods, are restricted for imports under the Foreign Trade Policy, and the appellants lacked the necessary import license. Therefore, they justified the duty demand, redemption fine, and penalty.The Tribunal upheld the department's conclusion that the goods were TMT rods, not scraps, and found no evidence to dispute this. While the demand for differential duty stood, considering the appellant's agreement for scrap and a previous Tribunal decision reducing fines and penalties, the Tribunal reduced the redemption fine and penalty. The redemption fine was reduced to Rs. 3,00,000 and the penalty to Rs. 50,000, modifying the impugned order without altering the duty demand.In conclusion, the appeal was partly allowed with the modification of the redemption fine and penalty as per the Tribunal's decision, maintaining the differential duty demand.