Customs, Excise and Gold Tribunal - Mumbai
Panchmahal Steel Ltd. vs Collector Of Customs on 16 April, 1993
Equivalent citations: 1993ECR364(TRI.-MUMBAI), 1993(68)ELT436(TRI-MUMBAI)
ORDER P.K. Desai, Member (J)
1. This appeal is directed against the Order-in-Appeal No. 525/92/BCH dated 28-9-1992 passed by the Collector of Customs (Appeals), Bombay, partially confirming the Order-in-Original No. S/10-125/92IV dated 8-6-1992 passed by the Deputy Collector of Customs, Gr. IV, Bombay, where he has confirmed the order of confiscation of 5 M.T. of Copper Scrap with option to pay fine of Rs. 30,000/- and also the confiscation of 290 kgs. of copper scrap found in excess with option to pay fine of Rs. 15,000/- (which was reduced to Rs. 10,000/-) and he has set aside the penalty of Rs. 10,000/- imposed on the appellants.
2. The appellants imported copper scrap and claimed clearance under OGL. The clearance was objected to, on the ground that the copper pipes were of the measurement of 60 cm in length and could not fall within the definition of the word "scrap". The consignment was also found more in weight to the extent of 290 kgs. The adjudicating authority however held the entire consignment as also 290 kgs. of excess liable to confiscation. During the course of the adjudication proceedings the appellants volunteered to mutilate the scrap to meet with the requirement of the definition of scrap and mutilation was accordingly carried out before clearance by the customs officers. In the appeal before the Collector (Appeals), he set aside the penalty. However, confirmed the order of confiscation in relation to 5 M.T. of scrap as not conforming with the requirement of definition and also 290 kgs. of scrap found in excess. However reduced the redemption fine in relation to excess scrap of 290 kgs. to Rs. 10,000/-.
3. Shri Willingdon Christian, the Ld. Adv. has submitted that, having been satisfied with the condition of pre-mutilation before clearance, the statutory requirement of the Policy for import of the scrap has been duly complied with and referring to the judgment of the Gujarat High Court in the case of Rupani Spinning Mills P. Ltd. reported in 1992 (60) E.L.T. 77 (Gujarat), he submitted that pre-mutilation has been carried out before clearance of the goods and hence the goods are not liable to confiscation under Section 111 of the Customs Act. As to the excess of 290 kgs. found he has submitted that it would be around 1%, which in the consignment like this, would not be abnormal and the appellants would not have intended to take any undue advantage for such a small quantity. He has submitted that the appellants are liable to duty on the goods imported and the duty for the excess found has already been paid. He has also pleaded that the import of scrap was never banned and if this excess was declared, the same would have been cleared. There was no mala fide in importing this excess which is a normal phenomena in the import of scrap. He has also submitted that there could be no act of misdeclaration inasmuch as they have declared the weight as was communicated to them by the suppliers by way of invoice and packing list supplied to them. He has therefore submitted that the order of confiscation to the extent of 290 kgs. is not sustainable.
4. Shri Harnek Singh, the Ld. JDR, however, has submitted that so far as 5 M.T. of scrap is concerned, at the time of importation, the same did not satisfy the requirement of the scrap. Subsequent mutilation would not exonerate the appellant from the liability to confiscation. As regards the excess quantity found, he has pleaded that usually the weight would be less on account of wear and tear and the loss in transit but here the weight is shown as excess to the extent of 290 Kgs which is not a usual phenomena in import of the scrap. He therefore submitted that the order of confiscation in relation thereto is just and proper.
5. Considering the submissions made and going through the records, it is clear that the appellants themselves volunteered to pre-mutilate 5 M.T. of scrap which did not meet the specification for the purpose of scrap and the mutilation has been carried out before clearance under the Customs supervision. The Gujarat High Court in the case reported in 1992 (60) E.L.T. 77 (Guj) has clearly laid down that when the mutilation has been done under the Customs supervision, before clearance, the goods to be cleared would be the one which satisfy the requirement for the purpose of licit import and ordering confiscation thereof was not justified. The same decision being from the High Court, has to be followed and no contrary judgment is available. In this View of the matter, the order of confiscation in relation to 5 M.T. of copper scrap cannot be sustained and has to be set aside.
6. As regards excess of 290 gms. of scrap, it appears from the record that the total quantity imported was 22.9 M.T. and out of that only 290 kgs. were found in excess, which amounts to 1% of the total import. The authority below has also taken the view that there could be no mala fide in finding the excess to this extent. All the same it remains as the excess and not declared in the Bill of Entry filed. Mala fide or otherwise would be a ground for considering whether personal penalty under Section 112 of the Customs Act should be imposed or not but the goods being excess to the declaration, it becomes liable to confiscation. However, considering the duty element involved, as also in the absence of mala fide on the part of the appellants, this appears to be a just case where for an unintentional lapse a strict action ought not be taken. Therefore, while sustaining the order of confiscation, the redemption fine is further reduced to Rs. 1000/- (Rupees One thousand only). With this modification the order of authorities below in relation to 290 kgs. of scrap found excess is sustained. The order of confiscation of 5 M.T. is set aside. Consequential reliefs to follow.