2003 (9) TMI 420 - AT - Customs

Summary

Issues:
Whether aluminium scrap imported by M/s. Hiren Aluminium Ltd. and M/s. Pankaj Extrusions Ltd. is liable for confiscation under the provisions of the Customs Act.

Analysis:
In the appeals filed by M/s. Hiren Aluminium Ltd. and M/s. Pankaj Extrusions Ltd., the central issue revolves around the confiscation of imported aluminium scrap under the Customs Act. The appellants imported aluminium scrap of used Beverage cans (UBC) Taldork per ISRI specifications. The Commissioner confiscated the goods for not conforming to Taldork grade specifications, allowing redemption on payment of a fine and imposing penalties. The appellants argued that ISRI specifications are guidelines for trade, subject to negotiation between buyers and sellers, unlike fixed standards like ISI, BS, and DIN. Reference was made to a letter by Mr. Ross Bartley emphasizing that mechanical processing does not alter the metal scrap's composition or recyclability. The appellants cited a previous case where the Tribunal held that ISRI codes allow variations agreed upon by both parties, supporting their position.

On the contrary, the Respondent contended that import policy permits only densified/briquetted aluminium scrap meeting ISRI code Taldon/Taldork specifications. Any deviation would defeat the purpose of specifying standards. It was highlighted that the density and dimensions of the imported scrap did not meet ISRI code requirements, justifying confiscation. The Respondent distinguished a previous case where mutual agreement validated deviations, which was not the case with the present appellants. However, the appellants argued that contractual terms with the foreign supplier acknowledged deviations from standard ISRI specifications, indicating compliance.

Upon evaluating the arguments, the Tribunal acknowledged that both appellants imported UBC aluminium scrap, confiscated due to density or size variations from ISRI standards. Citing a previous ruling, the Tribunal emphasized that ISRI codes are guidelines allowing variations by mutual agreement. The decision highlighted that density differences did not alter the material's composition or environmental impact, thus supporting the appellants' stance. Consequently, the Tribunal allowed both appeals based on the precedent set by the earlier case, thereby ruling in favor of the appellants and overturning the confiscation orders.