2018 (4) TMI 117 - AT - Customs

Classification of imported goods - Zinc Die Cast scrap - Revenue held that the goods were not as per the ISRI grade Scope and classified the goods under Tariff Item No. 79020090 - valuation u/s 14 of CA - Held that - ISRI Code Scope does not cover any goods which are having impurity such as plastic. Therefore, there should be no interference with the classification of said consignment decided by Revenue. However, the value was enhanced without following the requirement of Section 14 of Customs Act, 1962. Therefore, matter remanded back to the Original Authority with direction to follow the requirement u/s 14 for arriving at value of the consignment for the purpose of assessment and re-determine the redemption fine and penalty after setting aside the impugned Order-in-Appeal. Appeal allowed by way of remand.

Summary

Issues:
1. Classification of imported goods under Tariff Item No. 79020090.
2. Enhancement of value for assessment.
3. Confiscation and penalty imposed on the goods.
4. Compliance with Section 14 of Customs Act, 1962 for valuation.

Analysis:
1. The appeal pertains to the classification of imported goods described as Zinc Die Cast Scrap under Tariff Item No. 79020090. The appellant declared the goods as Zinc Die Cast scrap, but upon examination, it was discovered that the consignment contained around 20% plastic scrap. The Revenue held that the goods did not meet the ISRI grade "Scope" and classified them under a different tariff item. Additionally, the value for assessment was enhanced significantly from the invoice value, leading to the imposition of penalties and confiscation of the goods. The appellant contested these actions before the Commissioner (Appeals) based on the discrepancy in the zinc content calculation and the valuation method used by the Revenue.

2. The Learned Counsel for the appellant argued that the enhancement of value for assessment was not in compliance with Section 14 of the Customs Act, 1962. It was contended that the Learned Commissioner (Appeals) did not provide any findings on the valuation issue. The Revenue, while supporting the impugned order, acknowledged the lack of findings on the valuation plea. Upon considering the arguments from both sides and examining the ISRI Code "Scope," the Tribunal concluded that the goods containing impurities such as plastic were not covered under the ISRI Code "Scope." Therefore, the classification by the Revenue was upheld. However, the Tribunal found that the value enhancement did not adhere to the requirements of Section 14 of the Customs Act, 1962.

3. Consequently, the Tribunal decided to remand the matter back to the Original Authority with directions to follow the necessary procedures under Section 14 for determining the value of the consignment for assessment purposes. The Tribunal also instructed the Original Authority to reevaluate the redemption fine and penalty, setting aside the previous Order-in-Appeal. The appellant was directed to cooperate with the Original Authority, emphasizing that a personal hearing opportunity must be granted. Ultimately, the appeal filed by the appellant was allowed through remand, providing a resolution to the issues raised regarding classification, valuation, and penalties imposed on the imported goods.