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of <h1>Tribunal sets aside penalties and fines, grants mutilation request under Customs Act</h1> The Tribunal allowed the appeal, setting aside the confiscation, penalty, and redemption fine. The judgment emphasized the appellants' bona fide request ... Heavy Melting Scrap (HMS) imported by manufacturer-importers - appellants claimed concessional rate of duty @ 5% u/not. 16/2000 – on investigation it was found that the two containers had tor/ribbed steel bars - appellants had no means to know in advance as to what is contained in the containers is fresh bars and rods or HMS – request of assessee for mutilation was rejected – request for mutilation immediately after import establishes their bona fide - no warrant for confiscation penalty & fine Issues: Classification of imported goods under Customs Tariff Act, 1975; Confiscation under Customs Act, 1962; Imposition of penalty and redemption fine; Request for mutilation of goods.Classification of Imported Goods:The case involved the classification of 41.777 MT of M.S. Rounds imported by the appellants under tariff subheading No. 7214.20 of the 1st Schedule to the Customs Tariff Act, 1975. The Additional Commissioner initially ordered the classification and assessment at a specific rate per kg, along with the confiscation of 42.630 MT of goods under section 111(m) of the Customs Act, 1962. The Commissioner (Appeals) later confirmed this order, leading to the appeal. The appellants had imported Heavy Melting Scrap (HMS) but the goods were found to contain tor/ribbed steel bars upon inspection, which led to the dispute over classification.Confiscation and Penalty:The authorities seized the goods based on doubts regarding the description of the material, ultimately leading to the confiscation of a portion of the imported goods. The confiscation was made under the belief that the goods were M.S. Rounds classified under a higher rate of customs duty compared to HMS. Additionally, a penalty was imposed on the appellants under Section 112(a) of the Customs Act, 1962. The appellants requested the release of the goods, highlighting their regular importation of HMS for manufacturing purposes and the international standards followed by foreign suppliers.Request for Mutilation of Goods:The appellants requested mutilation of the goods under Section 24 of the Customs Act, 1962, to demonstrate that the material was in the nature of waste and scrap. They argued that the rejection of their request for mutilation by the Commissioner (Appeals) was incorrect, as they had no prior knowledge of the actual contents of the containers. The appellants cited precedents where similarly placed importers were permitted to clear goods after mutilation, emphasizing their status as manufacturer-importers. The Tribunal found merit in the appellants' request for mutilation, directing the release of the goods after effective mutilation under Customs supervision, treating the resulting scrap under the appropriate tariff heading.In conclusion, the Tribunal allowed the appeal, setting aside the confiscation, penalty, and redemption fine. The judgment highlighted the appellants' bona fide request for mutilation and distinguished the case from previous precedents, emphasizing the need to consider the specific circumstances of the importation and classification of goods.
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