2009 (5) TMI 682 - AT - Customs

Summary

Issues:
Misdeclaration of imported scrap as heavy melting scrap instead of re-rollable steel scrap; Contravention of Section 111(m) for misdeclaration of goods and value; Confiscation of goods with redemption option and imposition of penalty.

Analysis:
1. The case involved the misdeclaration of imported scrap as heavy melting scrap when it was actually re-rollable steel scrap. The appellants were found to have contravened Section 111(m) for misdeclaration of both the goods and their value. The goods were confiscated with an option to redeem them upon payment of a fine of Rs. 3,50,000/-, and a penalty of Rs. 1 lakh was imposed on the appellants, leading to the appeal.

2. The department's case relied on a report from the National Metallurgical Laboratory (NML) stating that the imported containers held steel structures/girders, which did not match the description of heavy melting scrap. The NML report provided dimensions of the structures, indicating they were not typical of heavy melting scrap. However, the NML concluded that the material could be classified as re-rollable steel scrap based on visual examination and dimensions.

3. The Tribunal referred to IS 2549:1994, the Indian Standard Code for Classification of Processed Ferrous Scrap, which defines re-rollable steel scrap. The NML's findings did not align with the description of re-rollable steel scrap under Standard No. 13 of IS: 2549:1994, as the dimensions of the imported goods did not meet the specified criteria. Additionally, Notification No. 21/2002-Cus covered re-rollable steel scrap, emphasizing adherence to the norms set out in Standard 13 of IS: 2549:1994. The burden of proof that the goods were misdeclared was not met by the department.

4. In light of the discussion and the precedent set in a previous case, the Tribunal accepted the importer's claim that the imported material was heavy melting scrap, overturning the finding of contravention of Section 111(m), confiscation, and penalty. The appeal was allowed, and the judgment was dictated and pronounced in open court.

This detailed analysis of the judgment highlights the key issues, arguments, and legal considerations involved in the case, providing a comprehensive understanding of the decision rendered by the Appellate Tribunal CESTAT, Chennai.