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2015 (2) TMI 464 - AT - CustomsImport of Silicon Electrical Steel Strips/Scrap originated from old and used dismantled transformer - Whether the imported goods are in the nature of scraps and freely importable or should be treated as old and used CRGO Strips whose import is restricted under the provisions of FTP, 2009-2014 read with Steel and Steel Products Quality Control Orders and the impugned Board s Circular - Held that - While observing that the impugned items are not scrap, the Ld.Commissioner has mainly relied upon the importer s declaration and the fact that no evidence could be produced to the effect that the said goods were going for re-melting. He has observed that importer in this case himself has not claimed the benefit of the customs Notification which is applicable to the scrap . However, this view of the Ld.Commissioner has been challenged before us on the ground that the dock officers have categorically reported the items to be scrap and no further examination of the impugned goods was got conducted by the Ld.Commissioner before arriving at his conclusion that the impugned items are scrap. Commissioner did not think it proper to get the goods examined by an expert or by a person, who dealt in such goods instead of relying on his own perception. - Issue requires fresh adjudication by the Ld.Commissioner and before adjudication representative sample of the imported goods should be examined in presence of the importer s representative by the person/technical experts dealing in the relevant field to ascertain whether the items were usable as such or after their processing, mentioning inter alia the length, width, thickness and other physical/technical character of the representative samples to arrive at the conclusion whether the imported items are scrap or otherwise. Since the facts of the present case are not clear in the light of above discussion hence the examination of applicability of judgements cited by both sides to the facts in our opinion, at this stage would be pre-mature. Accordingly the order of the Ld.Commissioner is set aside with the direction to pass a fresh order - Matter remanded back - Decided in favour of assessee.
Issues Involved:
1. Classification of imported goods as "scrap" or "old and used CRGO strips". 2. Applicability of the Steel and Steel Products Quality Control Orders. 3. Validity of the imposed penalties and redemption fine. 4. Requirement for expert examination of the imported goods. Detailed Analysis: 1. Classification of Imported Goods: The primary issue is whether the imported goods should be classified as "scrap" or "old and used CRGO strips". The appellant, M/s. Jai Mata Stamping Works, declared the goods as Silicon Electrical Steel Strips/Scrap originating from dismantled transformers. The dock officers reported that visually, the goods appeared to be scrap, but it was difficult to confirm their origin from dismantled transformers. The Commissioner relied on the importer's declaration and Section Note 8(a) to Section XV of the Customs Tariff Act, 1975, which defines scrap as metal goods not usable as such. The appellant argued that the goods were indeed scrap and cited various judgments supporting their claim that old, used, and rusted items should be considered as waste and scrap. 2. Applicability of Steel and Steel Products Quality Control Orders: The Commissioner confiscated the goods, citing contravention of the Steel and Steel Products Quality Control Orders, 2012 and 2014, and the Foreign Trade Policy (FTP) 2004-2014. The appellant contended that the Steel Control Order does not apply to scrap and that the Exim Policy restricts the import of second-hand goods, not scrap. The Revenue argued that the imported goods were old and used Silicon Electrical Steel Strips, not scrap, and their import was unauthorized under the Steel Control Orders and the FTP. 3. Validity of Imposed Penalties and Redemption Fine: The Commissioner imposed a redemption fine of Rs. 20.00 Lakhs and penalties on the importer (Rs. 10.00 Lakhs) and the CHA (Rs. 2.00 Lakhs). The appellant argued that the penalties were excessive considering the demurrage and detention accrued over six months and that there was no mis-declaration or contravention of the Customs Act or Tariff Act. The CHA also contended that there was no evidence of their involvement in any contravention. 4. Requirement for Expert Examination: The appellant argued that the Commissioner did not get the goods examined by an expert or obtain a trade opinion, relying instead on his own perception. The Revenue admitted that the Commissioner did not re-examine the goods to determine if they conformed to the definition of scrap. The Tribunal noted that classification under the Harmonized System of Commodity Description and Coding should be based on legal text, section notes, and chapter notes, and usability as such or after processing is a crucial criterion. Conclusion: The Tribunal found that the issue required fresh adjudication by the Commissioner. It directed that a representative sample of the imported goods be examined by technical experts in the presence of the importer's representative to determine whether the items were usable as such or after processing. The order of the Commissioner was set aside, and the case was remanded for a fresh decision. The Tribunal also directed that the goods be examined within 15 days of receipt of the order, and the case be disposed of within one month from the date of examination. The appeals were allowed by way of remand.
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