A.R. CASTING PVT. LTD. Vs. CC

JUDGEMENT

(1.) THIS appeal is directed against order in original dated 23.02.2005 wherein the Commissioner of Customs, ICD, Tughlakabad absolutely confiscated 1.670 M.T. of used rusted empty shells under Section 111(d) of the Customs Act and also confiscated the entire consignment of HMS scarp under Section 119 of the Customs Act with an option to redeem the same on payment of fine and also imposed penalty on the appellants under Section 112(a) of the Customs Act. The issue involved in this case is that the appellants purchased on high sea sales basis HMS scrap from M/s. Excellent Enterprises Pvt. Ltd. The total HMS scrap weighing 182.950 M.T. was contained in 10 containers. The sale of this consignment was done under invoice -dated 21.12.2004 wherein packing list was shown to contain 10 containers. There is also a "no war material certificate" issued by the seller in respect of 10 containers. When the goods landed in India, they were opened and examined by the Customs Officers and they found that out of 10 containers, in 4 containers there were empty used, rusted, broken shells and mixed with the HMS scrap. The total quantity of the said used rusted, broken shells and cartridges in all the 4 containers was 1.670 M.T. The authorities by on the spot panchnama seized 1.670 M.T. of used shells and also the balance heavy melting scrap imported. The appellants waived the right to receive show cause notice and attended the personal hearing. The adjudicating authority on the basis of finding that the appellants should have been careful in getting the certificate from an accredited certifying agency that the goods were not contaning war materials had violated the provisions of para 2.32 of the Import, of Export Policy. Consequently, goods i.e. 1.670 M.T. of used/rusted/broken shells are liable for absolute confiscation, and balance HSM scrap were liable for confiscation under Section 119 of the Customs Act.

(2.) THE learned Advocate appearing for the appellants submits that the consignment contains 182.950 M.T. of heavy melting scrap, the authority found only 1.670 M.T. of used shells, which is almost 0.91 % of the imports. It is his submission that they had purchased the goods on high sea sales basis, relying on the documents which were given and the documents which were given contained a certificate from the seller that the consignment did not have any war material and pre -inspection certificate from one of the recognized certifying authority i.e. M/s. Moody International, Iran, which also certified the that there were no war material in the said consignment. Relying on these documents, he had applied for clearance of these goods hence he cannot be found responsible importing these goods. He also submits that the authorities have admitted this as Commissioner has confiscated HM scrap under Section 119 of the Customs Act for concealing and not under any other section. It is his submission that Section 119 of the Customs Act is not applicable in the case, hence confiscation is liable to be set aside. Consequently, the penalty is imposed under Section 112 is also liable to be set aside. He submits that in respect of 1.670 M.T. of the used war materials which were found, it is an error or mistake on the part of the supplier but he is admitting that they are to be absolutely confiscated, penalty, if any is to be imposed that may be as per the provisions of Section 112 strictly. He relies upon the decision of the Tribunal in the case of ITC Global Holding v. CC, Mumbai reported at 2002 (149) ELT 1144 (Tri. -Mumbai) and Tower Steels (India) Limited v. CC, Madurai reported at 2004 (178) ELT 1004 (Tri. -Chennai).

(3.) THE learned DR submits that the appellants have not met both the conditions that were required to be met by him under para 2.32 of the Import and Export Policy. First he should have produced the certificate or the contract from the supplier to show that there were no war materials, consequently, he should have produced the pre -shipment certificate from the agency which were listed at appendix VIA of the Exim Policy. It is his submission that M/s. Moody International, Iran, is not authorized as certifying agent for the consignment. It is his submission that the quantity of 1.670 M.T. of used rusted shell etc. war materials cannot be considered a small quantity because even this quantity is enough to create panic. As regards application of Section 119 for confiscation of heavy melting scrap, it was submitted by him that the goods i.e. heavy melting scrap were used to conceal 1.670 M.T., though may not be literally, but were used to mix in such a way, that they could not be identified and they were identified only when the examination of the containers took place. Hence it is the submission that there is no reason to take a lenient view in this case.