2013 (7) TMI 645 - HC - Customs

Classification - import of Non-alloy steel melting scrap consisting of skull - presence of slag and skull scrap in the consignment - whether the conclusion arrived at in the Final Order passed by the Hon ble Tribunal not having expertise in the subject goods and chemical analysis report submitted by NML would be legally enforceable and tenable - Held that - The goods in question would fall under heading 72.04 and not under heading 26.19 - the reasoning of the Tribunal particularly based on the National Informatics Data Base of Directorate of Valuation under the Central Boards of Excise and Customs does not call for any interference by this Court -Court relied upon the judgement of Steel Authority of India Ltd v. Commissioner of Customs and Excise, Raipur (2005 (3) TMI 377 - CESTAT, NEW DELHI ) - skull scrap was obtained during the filling of the molten metal in the moulds through tundish as well as some spillage on the ground the same was imported - skull scrap is suitable for melting and in the absence of any material to show that the imported item was only slag resulting from the manufacture of iron and steel classifiable under Heading 26.19 no hesitation in accepting the plea of the assessee that the goods in question would fall under heading 72.04 and not under heading 26.19. The reasoning of the Tribunal particularly based on the National Informatics Data Base of Directorate of Valuation under the Central Boards of Excise and Customs does not call for any interference by this Court. - decided against the revenue.

Summary

Issues:
Classification of imported goods under Customs Tariff Act - Presence of slag and skull scrap in the consignment samples - Requirement of specific license for import - Expertise of the Tribunal in evaluating chemical analysis reports.

Analysis:
The case involved an appeal by the Revenue against the order of the Customs, Excise, and Service Tax Appellate Tribunal regarding the classification of imported goods under the Customs Tariff Act. The dispute arose from the presence of "slag" and "skull scrap" in the consignment samples, which the Revenue contended required a specific license for import and should be classified under Heading 26.19. The assessee claimed the goods fell under Heading 72.04 as non-alloy steel melting scrap. The Tribunal relied on a Metallurgical Inspection Report from the National Metallurgical Laboratory, which confirmed the item as non-alloy steel skull scrap suitable for melting, with about 80% iron content. The Tribunal considered previous decisions and aligned the classification with subheading 7204 49 00, rejecting the Revenue's misclassification and penalties.

The Revenue argued that the presence of slag in the materials necessitated classification under Heading 26.19, disputing the Metallurgical Inspection Report. However, the Tribunal found no grounds to disturb its order based on the evidence presented. The Revenue's appeal was dismissed. Additionally, a previous decision regarding iron scrap recovery supported the assessee's classification under Heading 72.04, emphasizing the process of obtaining skull scrap during molten metal filling. The Tribunal's reasoning, backed by the Directorate of Valuation's data, was upheld by the Court, affirming the classification under subheading 7204 49 00.

The Court further referenced a subsequent decision that reinforced the Tribunal's classification approach, which remained unchallenged by the Revenue. Considering the facts and legal precedents, the Court upheld the Tribunal's order, dismissing the Civil Miscellaneous Appeal without costs. The judgment clarified the classification of the imported goods, emphasizing the importance of expert analysis and adherence to relevant tariff headings in determining the appropriate classification for customs purposes.