2011 (1) TMI 438 - AT - Customs

Demand - Import of goods - Inbond manufacture - steel contained in the scrap - e provisions of Section 65(2)(b) of Customs Act, 1962 - in terms of clause (b) of sub-section 2 of Section 65 ibid, when any part of the goods resulting from inbond manufacturing operations is cleared from the warehouse for home consumption, import duty shall be charged on the quantity of the warehoused goods contained in so much of the waste or refuse as has arisen from the operations - find that the impugned order is consistent with the above provisions of the statute - Note that the language employed in the sub-section is clear and unambiguous and do not find any scope for a different interpretation of the same - In the circumstances, reject the appeal filed by M/s. Cochin Shipyard Ltd.

Summary

Issues:
Impugned order sustaining demand against the appellant for import duty on scrap generated during inbond manufacture of ships.

Analysis:
The impugned order upheld a demand of Rs. 1,25,87,845/- against the appellant, M/s. Cochin Shipyard Ltd., for import duty on scrap generated during the inbond manufacture of ships. The original authority applied Section 65(2)(b) of the Customs Act, 1962, holding the appellant liable to pay duty equal to the import duty payable on the steel contained in the scrap. The appellant challenged this order, arguing that the method followed was unreasonable and that the plain language interpretation should be adopted when more than one interpretation is possible. The appellant contended that the form in which the goods are cleared is relevant for valuation when waste/refuse is cleared for home consumption. The Tribunal considered the rival submissions and found no merit in the appeal. The Tribunal emphasized that under Section 65(2)(b), when goods resulting from inbond manufacturing operations are cleared for home consumption, import duty should be charged on the quantity of warehoused goods contained in the waste or refuse generated. The Tribunal concluded that the impugned order was consistent with the statutory provisions, and the language of the sub-section was clear and unambiguous, leaving no room for a different interpretation. Consequently, the appeal filed by M/s. Cochin Shipyard Ltd. was rejected.