2018 (5) TMI 995 - AT - Customs

Mis-declaration of imported goods - Stainless Steel Melting Scrap, Grade 304 - Customs authority was of the view that the goods declared is not tallying with the images of the goods imported, looking to the picture of the scrap, it is clear that these goods are in the form of Pipes/ Strips etc. - Held that - even though the goods is in form such as pipes/ strips etc, whether the same is capable of being used as such or it can be used only for melting purpose is the major criteria to decide that the goods are SS Scrap or some other article. This being the highly technical issue, cannot be ascertained by eye estimate, therefore, an expert opinion is required. There are various authorities such Chartered Engineer, National Environment Agency, GEOCHEM have confirmed that the goods is SS Scrap. Therefore, the case should have been decided only on the basis of the opinion of these authorities and not on the basis of a personal view of Customs authorities - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Valuation of imported goods
2. Confiscation of goods
3. Penalty under Section 112(a) of the Customs Act, 1962

Valuation of Imported Goods:
The appellant imported Stainless Steel Melting Scrap, Grade '304' and declared the value as &8377; 88,48,854/-. However, upon examination, undeclared cargo was found concealed alongside the genuine scrap. The Customs authority proposed a re-determination of value to &8377; 94,34,020/ and issued a show-cause notice for confiscation of the goods. The adjudicating authority imposed a penalty of &8377; 50,000/ under Section 112(a) of the Customs Act, 1962. The appellant challenged this decision, arguing that the goods were indeed SS Scrap and not serviceable articles. Various authorities confirmed the nature of the goods as SS Scrap, and the end-use certificate was issued. The Tribunal found that the major part of the scrap was SS Scrap Grade 304, with a small portion being serviceable articles. Expert opinions from authorities supported the classification of the goods as SS Scrap, and the Tribunal held that the penalty was wrongly imposed based on a personal view of Customs authorities. The impugned order was set aside, and the appeal was allowed.

Confiscation of Goods:
The issue of confiscation arose due to the discrepancy between the declared and undeclared cargo found during examination. The Customs authority proposed confiscation of the goods based on the findings of concealed SS Strips and Pipes alongside the genuine scrap. The appellant contended that the goods were all SS Scrap, supported by expert opinions and the end-use certificate. The Tribunal noted that while some portion of the imported goods was serviceable articles, the majority qualified as SS Scrap Grade 304. The decision to confiscate the goods was based on the incorrect classification of the goods by Customs authorities. As a result, the impugned order for confiscation was set aside, and the appeal was allowed.

Penalty under Section 112(a) of the Customs Act, 1962:
The adjudicating authority imposed a penalty of &8377; 50,000/ under Section 112(a) of the Customs Act, 1962 on the appellant. The appellant challenged this penalty, arguing that the goods were correctly classified as SS Scrap and not serviceable articles. The Tribunal agreed with the appellant, noting that expert opinions confirmed the nature of the goods as SS Scrap Grade 304. The penalty was deemed to be wrongly imposed based on a personal view of the Customs authorities. Therefore, the impugned order imposing the penalty was set aside, and the appeal was allowed with consequential relief, if any, in accordance with the law.