- (1.) The petitioner's case is that it carries on business of manufacturing brass slabs. The petitioner entered into a contract with a foreign supplier for import of yellow brass scrap "Honey" (hereinafter referred to as the said scrap) for such business. The foreign supplier shipped 18,938 kgs. of the said scrap which arrived in Calcutta on 12th October, 1990. The petitioner filed a Bill of Entry which was assessed by the Customs Authority to duty amounting to Rs. 4,26,200/-. The petitioner paid the assessed duty. Subsequently the said scrap was examined by the Customs Authorities and it was found that there were several buttons/pieces of snap fasteners lying mixed with the said scrap. The total quantity of the buttons/snap fasteners was found to be 1,211.7 kgs. Upon being asked for an explanation regarding the presence of the buttons/snap fasteners, the petitioner filed a certificate given by the foreign suppliers with the Customs Authorities, under cover of a letter dated 14-12-1990. In the letter the petitioner stated that the 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. A personal hearing was granted to the petitioner by the respondents. At the personal hearing the petitioner submitted that if the Customs Authorities had doubt regarding the utility of the buttons/snap fasteners, the same may be mutilated before allowing clearance of the same to the petitioner. It was in this context that an order was passed by the Additional Collector of Customs (being the Respondent No. 1 herein) on 10-1-1991 rejecting the petitioner's contentions.
(2.) The petitioner has challenged the said order dated 10th January, 1991 (hereinafter referred to as the impugned order) in this writ application. By the said impugned order the goods imported by the petitioner were confiscated under Section 111(d) of Customs Act, 1962 (hereinafter referred to as the 1962 Act) read with Section 3(1) of the Import and Export (Control) Act, 1947 (hereinafter referred to as the 1947 Act). By the impugned order the petitioner was given an option to redeem the imported scrap on payment of a redemption fine of Rs. 2,00,000/-. A personal penalty of Rs. 25,000/- was also imposed. The impugned order also provided "the entire quantity of metal buttons/snap fasteners may be mutilated to the satisfaction of the Customs Department as scrap before being released to the importer".
(3.) The petitioner's contentions are as follows:- (i) The Customs Authorities should have at least released the balance of the said scrap in respect of which there was no dispute. (ii) The buttons/snap fasteners were in fact scrap and fulfilled the specifications laid down by the Institute of Scrap Re-cycling Industries, Washington. It is further contended that the buttons/snap fasteners were "waste and scrap" within the definition in Section Note No. 6(a) of Section XV of the Schedule to the Customs Tariff Act, 1975. It is pointed out that the Respondent No. 1 had admitted that the condition of the said buttons/snap fasteners was not good. (iii) Having given the petitioner the option to clear the buttons/snap fasteners after mutilation of the same, there was no warrant for the Respondent No. 1 either imposing any redemption fine or levying any penalty.;