2000 (1) TMI 251 - AT - Customs

Appeal Dismissed: Imported Goods Fail Specifications, Conduct Not Bona Fide. Justified Penalty.

CHANDANMAL VARDICHAND JAIN Versus COMMISSIONER OF CUS., MUMBAI

The appeal was dismissed as devoid of merits. The tribunal concluded that the appellant's imported goods did not meet the NARI specifications for copper ... Import trade control Issues Involved:1. Classification of imported goods as copper scrap.2. Compliance with NARI specifications.3. Bona fide nature of the appellant's conduct.4. Justification for penalty and fine imposed.5. Applicability of precedents cited by the appellant.Issue-wise Detailed Analysis:1. Classification of Imported Goods as Copper Scrap:The appellant imported 37 drums of copper scrap from Singapore, claiming them under OGL appendix 6 for the Import Policy 1985-88. The Collector of Customs, Mumbai, held that the goods violated Section 111(d) of the Customs Act, as they were not classified as scrap but as serviceable items. The appellant argued that the goods were indeed copper scrap, supported by invoices and certificates from suppliers, including Hitachi Cable (S) PTE Ltd., certifying the goods had no service value except for scrap.2. Compliance with NARI Specifications:The crux of the case revolved around whether the imported goods met the NARI specifications for copper scrap. The NARI specification defined scrap as unalloyed copper wire with a minimum 94% copper content, free of certain contaminants, and subject to hydraulic pressing. The appellant contended that the goods met all parameters except hydraulic pressing, which should not invalidate their classification as scrap. However, the tribunal emphasized that hydraulic pressing was a crucial element of the specification, and its absence rendered the goods non-compliant with the NARI specifications.3. Bona Fide Nature of the Appellant's Conduct:The appellant claimed bona fide conduct, arguing that they acted in good faith by informing the Customs House about the serviceability of the goods and requesting examination under supervision. The department, however, highlighted intelligence reports suggesting the import of prime copper wire disguised as scrap, and the appellant's delayed compliance with customs formalities. The tribunal found that the appellant's conduct, including the letter dated 14-1-1987, suggested an attempt to mitigate the situation rather than genuine compliance.4. Justification for Penalty and Fine Imposed:The tribunal upheld the penalty of Rs. 1 lakh and fine of Rs. 3,20,000/- imposed by the Collector of Customs. It reasoned that the appellant's actions constituted a violation of Section 111(d) and 111(m) of the Customs Act, as the goods were not covered under OGL and required mutilation before clearance. The tribunal noted that the appellant had previously imported similar goods, indicating a pattern of non-compliance.5. Applicability of Precedents Cited by the Appellant:The appellant cited several judgments, including Hindustan Ferodo Ltd v. CCE, Kakkar & Co. & Others v. CCE, and CCE v. Hardik Industrial Corporation, to support their case. The tribunal found these precedents inapplicable, as they dealt with different factual contexts and did not address the specific issues of NARI specifications and the bona fide nature of the appellant's conduct. The tribunal emphasized that the existence of previous imports and the agreed payment of penalty and fine in the present case distinguished it from the cited judgments.Conclusion:The appeal was dismissed as devoid of merits. The tribunal concluded that the appellant's imported goods did not meet the NARI specifications for copper scrap, the appellant's conduct was not bona fide, and the penalty and fine imposed were justified. The precedents cited by the appellant were deemed inapplicable to the facts of the case.