2016 (3) TMI 891 - AT - Customs

Classification - Import of stainless steel scrap - Whether the goods imported are scrap or flanges - Appellant contended that consignment was non-serviceable and could not have been used in any other machine/machinery - Held that - the appellant had produced certificate of Chartered Engineer before the adjudicating authority as well as the first appellate authority. Also the appellant had placed an order for stainless steel scrap which was to be melted and used for manufacturing of bars and billets and not for trading purpose. Therefore, the claim of the appellant seems to be genuine and the flanges in question which were found in the stainless steel scrap seems to be scrap only and unserviceable. The certificate issued by a Chartered Engineer which was done so at the behest of lower authorities, is not disputed by the first appellate authority. - Decided in favour of appellant with consequential relief

Summary

Issues:
Import of stainless steel scrap mis-declaration leading to penalties.

Detailed Analysis:
The appeal was against an order-in-appeal dated 27.12.2004, where the appellant was found liable for penalties due to mis-declaration in imports made in October 2004. The appellant imported stainless steel scrap, but upon examination, it was discovered that the cargo also contained stainless steel scrap flanges, which were deemed serviceable and not scrap. The adjudicating authority classified the flanges under CTH 730721.00, ordered recovery of customs duty, imposed a redemption fine, and penalties. The first appellate authority upheld these decisions. The appellant, a manufacturer of primary iron and steel products, argued that the flanges were unserviceable and categorized as scrap by the supplier. They provided evidence, including photographs and a Chartered Engineer's inspection report, supporting their claim.

The first appellate authority concluded that the flanges were serviceable without expert evidence, disregarding the appellant's evidence. The Tribunal noted the appellant's genuine intent to use the stainless steel scrap for manufacturing, not trading. They found the appellant's claim credible, supported by the Chartered Engineer's certificate, which was undisputed by the first appellate authority. Consequently, the Tribunal held that the lower authorities failed to consider the appellant's evidence properly, leading to an unsustainable order. The impugned order was set aside, and the appeal was allowed with consequential relief.

In summary, the Tribunal found the appellant's claim regarding the unserviceable nature of the stainless steel flanges to be genuine, supported by evidence, and overturned the penalties imposed due to mis-declaration, ultimately allowing the appeal.