2018 (5) TMI 269 - AT - Customs

Classification of goods - railway scrap consisting of axles equivalent to heavy melting scrap - whether classified under CTH 7302990 or under CTH 86071910? - Held that - the Chartered Engineer nowhere disputed about the description of the goods declared by the appellant and more or less he agreed that the description was made correctly in the Bill of Entry. The Chartered Engineer also opined that the imported goods can either be used for melting purposes. Therefore, the goods declared as heavy melting scrap is not incorrect. There is no basis for making allegation against the appellant regarding the misdeclaration of the goods and the goods imported does not fall under the restricted category. Therefore, the same is not liable for confiscation. Enhancement of the value - Held that - no material such as contemporaneous import of the like goods was relied upon. Therefore, the enhancement of the value is arbitrary and cannot be accepted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported goods under Customs Tariff heading, Misdeclaration of goods, Allegation of secondhand goods, Value enhancement without proper procedure.

Classification under Customs Tariff heading:
The appellant filed a Bill of Entry for import of railway scrap classified under heading 7302990. The department proposed classification under CTH 86071910 based on a report from a Chartered Engineer. The Chartered Engineer confirmed the goods as railway scrap equivalent to heavy melting scrap. The Tribunal noted that the goods could only be used for melting purposes or manufacturing other components, not as axles. The Tribunal held that the goods were correctly declared and not misdeclared, as per the Chartered Engineer's opinion.

Misdeclaration of goods:
The appellant argued that the goods were not misdeclared, as confirmed by the Chartered Engineer. The Chartered Engineer's certificate supported the appellant's declaration of the goods as heavy melting scrap. The Tribunal agreed with the appellant that the goods were not misdeclared and could not be used as axles, supporting the appellant's position.

Allegation of secondhand goods:
The Revenue contended that the goods were secondhand and subject to restrictions. However, the Tribunal found that the goods, declared as heavy melting scrap, were not secondhand goods. The Chartered Engineer's report confirmed that the goods could be used for melting or manufacturing other components, not as axles. Therefore, the goods were not subject to restrictions as alleged by the Revenue.

Value enhancement without proper procedure:
The Revenue enhanced the value of the goods without following proper procedures or relying on contemporaneous imports. The Tribunal found the value enhancement arbitrary and baseless since no valid basis was provided for the increase in value. Citing relevant case laws, the Tribunal concluded that the value enhancement was unjustified. Consequently, the Tribunal set aside the impugned order and allowed the appeal, highlighting the serious infirmity in the decision.

In summary, the Tribunal ruled in favor of the appellant, holding that the goods were correctly declared as heavy melting scrap, not misdeclared or secondhand goods. The value enhancement without proper procedure was deemed arbitrary, leading to the decision to set aside the impugned order and allow the appeal.