2016 (10) TMI 519 - AT - Customs

Provisional release of goods - Aluminium Dross - Aluminium Ingots - Aluminium content declared of about 21% - test of samples - samples in the form of grayish porous metallic lumps of irregular shapes and sizes having oxidized surfaces - recovery of aluminium content of about 54% - enhancement in declared value on the basis of aluminium content - Held that - no CVD is prima facie leviable when no Excise Duty is leviable on Aluminium Dross. Provisional release of goods allowed - modification in the provisional release order - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Valuation of imported goods based on aluminium content
2. Provisional release conditions imposed by the Commissioner of Customs
3. Leviability of Countervailing Duty (CVD) on Aluminium Dross

Valuation of imported goods based on aluminium content:
The case involved M/s Ratan Aluminium Recycling Pvt. Ltd. appealing against an order passed by the Commissioner of Customs regarding the valuation of imported Aluminium Dross. The appellant imported Aluminium Dross for manufacturing Aluminium Ingots. The Central Revenue Control Laboratory (CRCL) tested samples and reported varying aluminium contents in the Dross. The Commissioner proposed to enhance the valuation based on the recoverable aluminium content. A show cause notice was issued, indicating discrepancies in the declared and expected aluminium percentages. The appellant sought provisional release of goods pending final adjudication, offering to pay the duty. The Tribunal considered the contentions and found that no CVD is leviable on Aluminium Dross when no Excise Duty is applicable, as clarified by a CBEC circular. Consequently, the appeal was allowed in the interest of justice, modifying the provisional release order.

Provisional release conditions imposed by the Commissioner of Customs:
The appellant challenged the conditions imposed for provisional release of goods, considering them harsh and unconscionable. The Commissioner required payment of differential duty, execution of a bond covering the re-determined value of goods, submission of a bank guarantee, and an undertaking to cooperate during investigation. The appellant argued that the demand for CVD on imported Dross was unsustainable, citing relevant legal precedents. The Tribunal, after hearing arguments from both sides, modified the provisional release order by reducing the differential duty amount, adjusting the bond value, and waiving off the bank guarantee and undertaking conditions.

Leviable Countervailing Duty (CVD) on Aluminium Dross:
The issue of levying CVD on Aluminium Dross was a focal point in the case. The appellant contended that since no Excise Duty is applicable on waste products like Aluminium Dross, CVD should not be levied. Legal references were made to support this argument, emphasizing that waste products are not excisable to Excise Duty. The Tribunal, after careful consideration, agreed with the appellant's stance, citing a CBEC circular clarifying the non-leviability of CVD on Aluminium Dross. Consequently, the Tribunal allowed the appeal and directed the release of goods, modifying the provisional release conditions accordingly.

In conclusion, the judgment addressed the issues of valuation based on aluminium content, provisional release conditions, and the leviability of CVD on Aluminium Dross. The Tribunal's decision was based on legal interpretations, precedents, and relevant circulars, ensuring a fair and just outcome for the appellant.