2015 (3) TMI 120 - AT - Customs

Concessional rate of duty under Notification No. 21/2002-Cus (Sl. No. 20) - mis-declaration of re-rolling scrap - confiscation of the same under Section 111(d) & (m) of Customs Act, 1962 - Held that - Original adjudicating authority held the goods to be re-rollable scrap based only on the opinion of custom authorities who examined the goods. No expert opinion was obtained. As against that, the Commissioner (Appeals) has based her findings on several documentary evidences as mentioned earlier, including the pre-shipment inspection certificate which clearly certified the goods to be heavy melting steel scrap. In a dispute involving Custom, the Revenue s argument that examination report by Customs officers should be accepted without any other supporting evidence defies even the most basic jurisprudential principles. It is also seen that in the discussion and finding portion of the primary order there is not even a word about enhancing the value, leave alone basis for doing so. Thus enhancement of value is devoid of sustainability. - entire documentary evidences on record reflect upon the fact that the imported goods were nothing but heavy melting scrap and there being no expert opinion to conclude against the appellant, we extend the benefit to them and set aside the impugned order. - Decided against Revenue.

Summary

Issues:
1. Mis-declaration of goods as heavy melting scrap.
2. Confiscation of goods under Customs Act, 1962.
3. Enhancement of value without basis.
4. Expert opinion requirement in customs disputes.
5. Reliance on documentary evidence.
6. Precedents regarding classification of goods.

Mis-declaration of goods as heavy melting scrap:
The case involved the declaration of goods as heavy melting scrap, which was disputed by the Revenue as re-rolling scrap. The primary adjudicating authority confiscated the goods under the Customs Act, 1962, based on the examination report of custom officers. However, the Commissioner (Appeals) found in favor of the respondents, citing documentary evidence like invoices, inspection certificates, and contracts describing the goods as heavy melting scrap. The Commissioner set aside the original order due to lack of basis for mis-declaration allegations.

Confiscation of goods under Customs Act, 1962:
The primary order confiscated the goods under Sections 111(d) & (m) of the Customs Act, 1962, based on the mis-declaration issue. However, the Commissioner (Appeals) disagreed, noting the absence of expert opinion and reliance on documentary evidence certifying the goods as heavy melting scrap. The Commissioner found the confiscation order unsustainable and set it aside, leading to the appeal by Revenue.

Enhancement of value without basis:
Revenue contended that the value enhancement was justified as per NIDB data for valuation. However, the Commissioner found the enhancement unsustainable, as it was done without providing any basis for the increase. The lack of rationale for the value enhancement was a key point in the appeal process, with the Commissioner ruling in favor of the respondents based on this issue.

Expert opinion requirement in customs disputes:
The case highlighted a discrepancy between the opinion of custom authorities and the documentary evidence regarding the classification of goods. The Commissioner emphasized the need for expert opinion in such disputes, especially when conflicting reports are presented. The lack of expert opinion in determining the nature of the goods was a significant factor in the appeal decision.

Reliance on documentary evidence:
The respondents heavily relied on various documentary evidence, such as invoices, inspection certificates, and contracts, to support their claim that the goods were indeed heavy melting scrap. The Commissioner found this documentary evidence compelling and crucial in determining the nature of the goods, ultimately leading to the setting aside of the original order.

Precedents regarding classification of goods:
The respondents cited relevant precedents, including judgments in similar cases, to support their argument that the goods should be classified as heavy melting scrap. The Tribunal considered these precedents, along with the documentary evidence presented, in reaching the decision to dismiss Revenue's appeal. The reliance on legal precedents and past judgments played a significant role in the final outcome of the case.