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2016 (3) TMI 220 - AT - CustomsClassification - Whether the goods imported are Heavy Melting Steel Scrap or Secondary Welded Pipes - Held that there is no misdeclaration by appellant as seen from the purchase order/sales contract, sales confirmation report and pre-shipment inspection certificate, wherein appellants have placed orders for supply of 1000 MTs of HMSS, and imported the said goods and cleared in terms of purchase order. The test report relied by Revenue in a private laboratory is not the competent authority approved by CRCL or Customs and even as per the test report, the goods were found to be secondary pipes which clearly confirms that they are scrap . Also the appellants are registered Central Excise assessee having foundry for manufacture of billets, TMT bars as evident from the Central Excise registration and paying central excise duties on the final products and is not a trader of imported goods in the guise of scrap for trading purpose. The pre-shipment inspection certificate clearly indicates that HMSS supplied was unshredded and justifies the bonafide of appellant being an actual user. Therefore, the goods imported are Heavy Melting Steel Scrap and the clearance is allowed after mutilating the goods under customs supervision followed by the decision of Hon ble Madras High Court, uphelded decision of the Tribunal in the case of COMMR. OF CENTRAL EXCISE, MADURAI Versus SRI RENGA STEEL CORPORATION 2014 (9) TMI 522 - Madras High Court. - Decided against the Revenue
Issues Involved:
1. Misdeclaration of Imported Goods 2. Confiscation and Penalty Imposed by Adjudicating Authority 3. Validity of Test Report from Private Laboratory 4. Mutilation of Goods for Clearance 5. Applicability of Previous Judicial Decisions Issue-Wise Detailed Analysis: 1. Misdeclaration of Imported Goods: The core issue was whether the imported goods were "Heavy Melting Steel Scrap" (HMSS) or "Secondary Welded Pipes." The respondent declared the goods as HMSS, but upon examination, 90% were found to be secondary welded pipes. The adjudicating authority considered this a misdeclaration, leading to confiscation and penalties. However, the respondent argued that the goods were ordered and certified as HMSS by the overseas supplier, supported by a pre-shipment inspection certificate from Germany. The Tribunal found no misdeclaration, referencing the purchase order and sales contract that specified HMSS, and upheld the respondent's claim. 2. Confiscation and Penalty Imposed by Adjudicating Authority: The adjudicating authority confiscated the goods, imposed a redemption fine of Rs. 30 lakhs, and a personal penalty of Rs. 10 lakhs. The Commissioner (Appeals) set aside this order, directing the release of goods after mutilation. The Tribunal supported the Commissioner (Appeals), stating that there was no misdeclaration, thus nullifying the grounds for confiscation and penalty. The Tribunal cited previous cases, including Sri Renga Steel Corporation, where similar conclusions were reached. 3. Validity of Test Report from Private Laboratory: The test report from Sargam Laboratory Pvt. Ltd., which indicated the goods were 90% secondary welded pipes, was challenged by the respondent. They argued that the laboratory was not approved by Customs or CRCL. The Tribunal agreed, noting that the test report from an unapproved laboratory could not be relied upon. It emphasized the importance of using certified and recognized laboratories for such determinations. 4. Mutilation of Goods for Clearance: The Commissioner (Appeals) ordered the mutilation of goods before clearance, which was contested by Revenue. The Tribunal upheld the Commissioner's decision, referencing the Tribunal's previous rulings that allowed clearance of goods as scrap after mutilation. The Tribunal cited the case of Sri Renga Steel Corporation, where the High Court of Madras upheld the Tribunal's decision to permit mutilation. It concluded that the goods, even if found as secondary pipes, could be cleared as scrap after mutilation. 5. Applicability of Previous Judicial Decisions: The Tribunal referenced several judicial decisions to support its ruling. It distinguished the Punjab and Haryana High Court decision in Aman Alloys Ltd., stating that the jurisdictional Madras High Court's ruling in Sri Renga Steel Corporation was binding and applicable. The Tribunal also cited other cases where mutilation was permitted and goods were cleared as scrap, reinforcing its decision to allow the respondent to clear the goods after mutilation. Conclusion: The Tribunal upheld the Commissioner (Appeals) order, allowing the clearance of goods after mutilation under customs supervision. It rejected the Revenue's appeal, finding no misdeclaration by the respondent and emphasizing the binding nature of jurisdictional High Court rulings and the importance of using approved laboratories for testing. The decision reaffirmed the principles established in previous cases, ensuring consistency in the application of the law.
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