TaxTMI 
TaxTMI 
1996 (3) TMI 186
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.... adjudication order confiscating the goods, fixing redemption fine of Rs. 3 lakhs, directing duty to be paid on CIF value determined as Rs. 3,72,000/- and imposing penalty of Rs. 50,000/-. This order is now challenged. 2. During personal hearing by the Collector, the appellant contended that the goods were ordered as scrap, that he was not aware how "these goods" came and he was "willing" to cut the goods and make them scrap. The Collector found that the goods were not "scrap" but prime copper wire the import which required a specific licence but the appellant did not possess any such licence. There was also misdeclaration of value since the lowest price of copper wire as ascertained from London Metal Exchange Bulletin was not less than US Dollars 1450 per M.T. On these grounds he found justification for confiscation and the other levies of the order. The duty was paid on 26-11-1986 and goods cleared. Personal hearing by the Collector was on 23-12-1986. The order was passed on the same day. The Collector did not specifically consider the effect of the 'willingness' expressed by the appellant to "cut" the goods and make them scrap. 3. Learned counsel for the appellan....
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....urther contended that these coils were factory rejects. Even assuming it to be so, since they were of good quality and running in length and in rolls they cannot be accepted as scrap. A similar contention was rejected by the Tribunal in D.M. Woollen Mills Pvt. Ltd. v. Collector of Customs, Bombay - 1995 (75) E.L.T. 591 (T). Dealing with the import of goods alleged to be woollen rags, contrary to the guidelines in the Bombay Custom House Public Notice, the Tribunal observed - "Therefore, while ordering for supply of rags to a foreign supplier, it would be incumbent upon them to clearly and unequivocally instruct them to supply only such item which passes the standard laid down by Indian Customs and if they even then, cause the import to be made of the items which could not meet with the prescribed standards, not only the items became liable to confiscation........." 5. So far as the mutilation is concerned, there was no formal application before the Collector seeking permission for mutilation before clearance. It was only during personal hearing that the appellant expressed "willingness" to cut the wires to make them into scrap. In the absence of specific request for perm....
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....(58) E.L.T. 385 (Cal.) petitioner, manufacturer of brass slabs, imported "Yellow Brass Scrap 'Honey'". Examination showed that out of the consignment of 18.938 Kgs, buttons and snap fasteners constituted 1211.7 Kgs. According to the Writ Petitioner, buttons/snap fasteners were in fact brass scrap as they were not in good condition and did not form complete sets and could not be utilised for any purpose other than melting. They suggested that if the Customs had any doubt the same may be mutilated before allowing clearance. There was an order of confiscation fixing redemption fine of Rs. 2 lakhs and also levying penalty. There was a direction for mutilation before release. Buttons require specific licence while scrap was importable under OGL. The Court observed that under Section 24, after mutilation, there cannot be any question of evasion of duty on the basis that the offending goods were not scrap. Since the goods were mutilated they will be chargeable to duty only at the rate applicable to the goods in the mutilated form. The Court noticed that buttons and snap fasteners were not in good condition and it could not be disputed that they could have been treated as scrap and that th....
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.... the goods were not properly mutilated while 25% were properly mutilated and 5% were found to be garments without any cutting. It was held that the fact that only 5% garments were found to have no cutting showed the bona fides of the importer. The Additional Collector had ordered release of the partially mutilated goods after further mutilation. The Additional Collector had ordered further mutilation and imposed penalty of Rs. 70,000/-. The Tribunal set aside the order of absolute confiscation and penalty and permitted release of the goods after mutilation. The decision in Hardik Industrial Corporation v. Collector of Customs - 1996 (81) E.L.T. 172 (T) considered the case of import of what was alleged to be scrap by the importer as HDPE bags and LDPE films by the Custom House. The import was for the purpose of recycling. The Collector held that the entire quantity of goods were not scrap and ordered confiscation besides imposing penalty and fixing redemption fine. The Tribunal directed the entire quantity of goods to be mutilated in such a manner the goods can be used only for recycling and not for any other purpose and set aside the impugned order. 10. These decisions do n....