2018 (2) TMI 34 - HC - Customs

Benefit of N/N. 11/97 - Customs authorities were of the view that 2900 MTs declared as heavy melting scrap (HMS) were re-usable for other purposes without reclaiming the metal and therefore, the benefit of Customs N/N. 11/97 applicable to HMS, was not available to the case - Held that - Though Mr.Pramod Kumar Chopda, learned counsel for the appellant, made submissions, in support of the substantial questions of law, finding of fact, confirmed by a coordinate bench in the case of the respondent, on the same set of facts, is binding on us. Though, being aggrieved over some portion of the common order, the Commissioner of Customs/appellant herein, has filed the instant appeals, final order made in 1140 and 1141 of 2006 dated 30.11.2006, has been confirmed in entirety - appeal dismissed.

Issues:
1. Mis-declaration of imported goods as heavy melting scrap.
2. Confiscation of goods and imposition of fine and penalty.
3. Applicability of Customs Notification No.11/97.
4. Appeal against the order of the Commissioner of Customs.
5. Interpretation of Board Circular F.No.528/163/93-Cus (TU) dated 4.1.1994.
6. Scope of CESTAT Final order No.3259 to 3269 of 1997 dated 12.12.1997.

Issue 1: Mis-declaration of imported goods as heavy melting scrap

The case involved the mis-declaration of imported goods by M/s.Shri Ganesh Steel Rolling Mills Ltd as heavy melting scrap (HMS), which was later found to be re-rollable scrap. The Customs authorities determined that a portion of the goods declared as HMS was actually reusable for other purposes without reclaiming the metal, leading to a show-cause notice and subsequent confiscation of the goods under Section 111(m) of the Customs Act, 1962. The Commissioner of Customs imposed fines and penalties on the company and its Managing Director for mis-declaration and upheld the confiscation of the goods.

Issue 2: Confiscation of goods and imposition of fine and penalty

Following the appeals filed before the CESTAT, Chennai, the Tribunal upheld the findings of the Commissioner of Customs regarding valuation, confiscation, redemption of fine, and penalty. The Tribunal remanded the matter to the Commissioner for further consideration regarding the request for mutilation of re-rollable scraps and extension of benefits as per the Board Circular. The subsequent orders passed by the Commissioner confirmed the mis-declaration and directed payment of differential duty, confiscation of scrap, imposition of fines, and encashment of bank guarantees.

Issue 3: Applicability of Customs Notification No.11/97

The Customs authorities contended that the benefit of Customs Notification No.11/97 applicable to heavy melting scrap (HMS) was not available due to the mis-declaration of goods by the importer. The subsequent orders clarified the nature of the imported scrap as re-rollable scrap, leading to a determination of the value of the goods and the direction to pay the differential duty on the re-rollable scrap.

Issue 4: Appeal against the order of the Commissioner of Customs

M/s.Shree Ganesh Steel Rolling Mills Ltd filed appeals before the CESTAT, Madras, challenging the orders passed by the Commissioner of Customs. The CESTAT, Madras, in its final order, treated the scrap in question as melting scrap for duty assessment purposes, granted the benefit of a customs notification to the assessee, and settled the liability of the goods for confiscation and penalties against the appellants.

Issue 5: Interpretation of Board Circular F.No.528/163/93-Cus (TU) dated 4.1.1994

The substantial question of law raised in the appeals questioned the applicability of the Board Circular when there was an attempt to misdeclare goods and evade customs duty. The High Court considered the contentions and upheld the findings of fact by the Tribunal, confirming the misdescription of goods and the applicability of the end-use benefit provided via the Notification No.83/90.

Issue 6: Scope of CESTAT Final order No.3259 to 3269 of 1997 dated 12.12.1997

The appeals also raised concerns regarding whether the order passed by the Commissioner was within the scope of the CESTAT Final order of 1997. The High Court, after considering the submissions and findings of fact, upheld the Tribunal's decision, confirming the misdeclaration of goods and the subsequent directions for confiscation, redemption, and payment of fines and penalties.

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