DAYA SAGAR Vs. COMMISSIONER OF CUSTOMS, JAMNAGAR

JUDGEMENT

(1.) The appellants filed a bill of entry on 24 -11 -2004 for clearance of 215.4 MTs of old and used pipes (Rerollable scrap) of Jordan origin. On examination of the goods carried out by Customs officers, the consignment was found to contain 64.74 MTs of various war items including used ammunitions, broken armoured vehicles etc. Consequent to this the consignment was seized on 11 -1 -2005 and after issue of show cause notice and adjudication process, the impugned order came to be passed which resulted in (a) absolute confiscation of 64.74 MTs of used ammunitions and armoured vehicles; (b) confiscation of 150.66 MTs of old and used pipes under Section 119 of Customs Act, 1962 with an option to redeem the same on payment of fine of Rs. 7.5 lakhs in lieu of confiscation; and (c) a penalty of Rs. 2.5 lakhs on the appellants.

(2.) HEARD both the sides. Ld. Counsel on behalf of the appellants submitted that they had purchased the material on high sea sale basis and they had not ordered for war material whatsoever; the Commissioners decision that the consignment of used pipes was used to conceal the war material and consequent confiscation is incorrect and therefore may be set aside; that the penalty of Rs. 2.5 lakhs imposed was very high. He also submitted that there was considerable delay consequent to the examination and adjudication process and therefore the appellants had to suffer heavy demurrage and other storage costs. He requested that having regard to the circumstances of the case and the excessive expenses that the appellants had to incur, a lenient view has to be taken on redemption fine and penalty. He also cited the decisions of the Tribunal in the case of M/s. Manaksia Ltd. [2007 (219) E.L.T. 434 (Tri. -Ahmd.)] and M/s. J.S.Khalsa Steels (P) Ltd. [2006 (206) E.L.T. 870 (Tri. -Del.)] in support of his contention that no mala fide can be attributed to the appellant when war material was found in the consignment. Ld. Jt. CDR on behalf of the Revenue submitted that the Notification prohibiting the importation of war material was issued in 1929. Further pre -shipment certificate was also required, which was not submitted by the appellants. She also pointed out that the old and used pipes were used to cover up the broken armoured vehicles and ammunitions and therefore the confiscation and imposition of redemption fine was appropriate.

(3.) WE have considered the submissions from both the sides. We find that both the decisions cited by the ld. Advocate for the appellants related to the same period when this consignment was imported and in both the cases the pre -shipment certificate was available. The appellants while making the high sea purchase should have insisted upon pre -shipment certificate which is required as per the law. Therefore they have failed to take the most important precaution. Further in both the cases cited by the ld. Advocate, pre -shipment certificate were available but not from a recognized agency. In view of the above, it cannot be said that appellants are totally innocent and have not committed any offence. Further from the fact that goods were declared as old and used pipes and the consignment actually contained to the extent of more than 1/3 of war material also shows that the description of the goods old and used pipes was used for concealing war material and other items. The absence of pre -shipment certificate and the declaration justifies the confiscation of old and used pipes under Section 119. However, having regard to the fact that appellants had to suffer considerable amount of demurrage, storage charges etc., the redemption fine and penalty, in our opinion, have to be reduced. Accordingly, redemption fine imposed is reduced to Rs. 1 lakh (Rupees one lakh only) and the penalty is reduced to Rs. 5,000/ - (Rupees five thousand only). But for the above modifications, the appeal filed by the appellants is rejected. Cross -objection filed by the Revenue also gets disposed off. (Pronounced in Court)