2017 (12) TMI 339 - AT - Customs

Classification of goods - Heavy Melting Steel Scrap - Steel Slabs (Stock Lot Non Alloys) - mis-declaration of goods - enhancement of value - Held that - the 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 - 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. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Mis-declaration of goods in Bill of Entry
2. Use of goods for concealing other goods
3. Mis-declaration of value of imported goods
4. Mis-declaration of weight of goods

Analysis:
1. The main issue in this appeal was whether the goods declared in the Bill of Entry were mis-declared and liable to be confiscated. The Commissioner (Appeals) found that the description of the goods as HMS Scrap was consistent across various documents like invoices, pre-shipment inspection certificate, high sea sale contract, and bill of lading. The Commissioner also noted that the request for mutilation of goods was rejected, indicating that the goods were not usable as re-rolling scrap. Consequently, the order-in-original was set aside due to lack of evidence supporting mis-declaration of description.

2. The Revenue argued that the goods declared as HMS were actually re-rolling scrap, as opined by customs authorities during examination. They further contended that the enhancement of value was based on NIDB data and that the respondents' suggestion for mutilation showed their awareness of the goods' re-rollable nature. However, the respondents cited previous judgments to support their position that the enhancement of value lacked legal basis.

3. The Tribunal observed that the original adjudicating authority's decision was solely based on customs officers' examination without obtaining expert opinion. In contrast, the Commissioner (Appeals) relied on documentary evidence, such as the pre-shipment inspection certificate, confirming the goods as heavy melting steel scrap. The Tribunal emphasized that accepting customs officers' examination reports without additional evidence goes against legal principles. Additionally, the Tribunal found no basis for the enhanced value, rendering it unsustainable.

4. The appellants presented various documents, including the bill of lading, foreign supplier's invoice, pre-shipment inspection certificate, high sea sale contract, and correspondence with Hardware Trading Corp., all confirming the imported goods as heavy melting scrap. With no expert opinion contradicting this evidence, the Tribunal ruled in favor of the appellants and set aside the impugned order. In a related case, the denial of mutilation was also deemed unsustainable.

5. Considering the evidence and arguments presented, the Tribunal dismissed the Revenue's appeal, finding no merit in their contentions. The appeal was therefore rejected, and the decision was pronounced in open court.