Customs, Excise and Gold Tribunal - Mumbai
M/S. Alex Cables Ltd. And M/S. Arfin ... vs Commissioner Of Customs (Prev.), ... on 7 March, 2001
Equivalent citations: 2001(75)ECC796, 2001(132)ELT212(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. These two applications relate to two appeals filed against the single order passed by the Commissioner of Customs. On perusal of the facts and on hearing the arguments, it appeared that at this stage itself the appeals may be taken up for disposal. This was done on granting waiver of pre-payment of penalty of rupees one lakh imposed on each of the two appellants.
2. We have heard Shri V.S. Nankani, advocate appearing along with Shri Naresh Thackar, advocate. We have heard Shri B.K. Choubey for the Revenue.
3. M/s. Arfin Enterprises Ltd. imported aluminium scrap. The invoice and the packing list described the goods as aluminium scrap used beverage can taldon grade as per the Institute of Scrap Recycling Industries specifications. These goods were sold on high-sea sale basis to M/s. Alex Cables Ltd. M/s. Alex Cables Ltd. filed four bills of entry for clearance of this consignment. The Import Trade Control Policy at the material time permitted free importation of certain grades of such scrap classified under heading ITC HS 76020000.10. For goods not falling under these grades, the Policy specified production of a specific import licence.
4. On examination of the physical details of the consignment the examining officers found that the goods did not pass the taldon grade. The importers claimed in the alternative taldork grade. The goods did not fall under these specifications either. In that eventuality show cause notice was issued alleging that the goods having been imported without licence were liable to confiscation under section 111(d) of the Customs Act, 1962 and also under section 111(m) for the mis-declaration of the ISRI grade. Allegations as to penalty were made. The charges were confirmed. The goods were confiscated, allowed redemption on payment of fine of rupees 17 lakhs. The penalty as shown above was imposed on both the high-seal seller and the importer. Hence these two appeals.
5. We have examined the specifications given for both the taldork and taldon grades. We have also examined the specifications of the goods actually imported. We find that the goods as imported do not fall under either of the two grades. Shri Nankani also fairly concedes this. His submission is that the importers are actual users. They would use these goods for manufacture of cables. They are not traders nor do they intend to sell the goods and therefore the very high quantum of find is not justified. As regards the importers his case is that they had not placed the orders and therefore there was no justification for imposition of penalty on them. It is his case that in spite of this specific order being placed and the description being reported in the documents, the suppliers had sent the wrong goods and therefore the penalty was not attracted on M/s. Arfin Enterprises also. Shri Choubey, on the other hand, submits that this is a clear case of an attempt to take advantage of the importability and therefore the fine and the penalty are justified.
6. If the actual importers had been traders and if the goods as are imported would have gained higher premium in the market by not falling under the advertised ISRI brands, then the logic behind the substantial quantum of fine would have sustained. In the present case we find that the goods are (SIC) and in some of the bales the density is almost equal to the minimum weight prescribed for taldork grade. Unfortunately the proceedings do not show as to how many of the bales were on the higher end of the spectrum of 1635 to (SIC)1639.91 but we are inclined accept the statement of Shri Nankani that the importer being an actual user would use the imported goods and the classification of such goods under a particular mark would be of little relevance or importance to the use.
7. Therefore, while accepting that the contravention of the provisions as alleged has been established, we reduce the quantum of fine to rupees five lakhs. The penalty imposed on M/s. Alex Cables Ltd. is remitted in full. The penalty imposed on M/s. Arfin enterprises Ltd. is reduced from rupees one lakh to Rs.20,000/-.
(Dictated in Court)