2017 (5) TMI 223 - AT - Customs

Import of Waste and scrap - misdeclaration - examination had revealed the said goods to be, though old and used, serviceable wire rope and secondary/defective wire rope/rolls - Held that - conformity with the definition of waste and scrap, the object of its ultimate usage, the origin and the value to be adopted for determining the duty liability have not been examined in the impugned order. These are matters vital to determination of classification as well as valuation of the goods. In the absence of determination that would meet the test of legality and propriety, the impugned order is incomplete - it is only proper that the submissions made by the appellant be given appropriate consideration before arriving at a decision on confiscation of the goods and determination of duty liability - appeal allowed by way of remand.

Summary

Issues:
Classification of imported goods as waste and scrap under the Customs Tariff Act, 1975; Valuation of imported goods under the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988.

Classification of Imported Goods:
The appellant, M/s Rakesh Overseas Ltd, imported 'heavy melting scrap' but faced a challenge regarding the classification of the goods as waste and scrap under the Customs Tariff Act, 1975. The Commissioner of Customs held that the imported goods did not meet the specifications of 'metal waste and scrap' as defined in the Act, identifying them as serviceable wire rope and secondary/defective wire rope/rolls. Consequently, the goods were confiscated and could be redeemed upon payment of a fine. The assessable value was re-determined based on the price from the London Metal Exchange, adjusted for age and defects.

Valuation of Imported Goods:
In the appeal, the appellant argued that the rejection of the declaration as heavy melting scrap was inconsistent with acknowledging the goods as old/defective. They contended that the valuation adopted should have been based on similar goods or as per the Customs Valuation Rules. The appellant claimed that the imported goods were meant for sale to actual users for melting, with certification from Central Excise authorities. They argued that since the goods were generated in the manufacturing process of prime products, they should be considered waste and scrap as per the Act.

Judgment Analysis:
Upon reviewing the grounds of appeal and considering the impugned order, the Tribunal noted that crucial aspects such as conformity with the waste and scrap definition, intended usage, origin, and valuation for duty determination were not adequately addressed. The Tribunal found these factors essential for the classification and valuation of the goods. Consequently, the Tribunal deemed the impugned order incomplete and set it aside, remanding the matter to the original authority for a fresh decision. The Tribunal emphasized the need for a thorough examination of the appellant's submissions before making a final determination on the confiscation of goods and duty liability.

This judgment highlights the significance of a comprehensive assessment of factors such as classification and valuation in customs matters, underscoring the need for thorough consideration of all relevant aspects before reaching a decision.