2018 (5) TMI 1475 - AT - Customs

Mutilation of goods - scrap imported - Held that - in view of the principles of law settled by this Tribunal in DEWAN STEEL INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS, AMRITSAR 2008 (2) TMI 128 - CESTAT, NEW DELHI , where under this Tribunal has directed clearance of imported goods after mutilation and conversion into scrap. It is directed that before clearance of the imported scrap, the same could be mutilated and allowed to be cleared as scrap at the cost of the appellant - appeal allowed.

Summary

Issues:
- Appeal against order passed by Commissioner (Appeals) of Customs, Ahmedabad confiscating imported goods with fine and penalty.
- Dispute regarding classification of imported scrap as serviceable material or scrap.
- Argument on the possibility of mutilation and conversion of imported scrap into scrap for clearance.

Analysis:
1. The appeal was filed against the order passed by the Commissioner (Appeals) of Customs, Ahmedabad, confiscating the imported goods weighing 110.264 MT with an option to redeem on payment of fine and imposition of a penalty. The appellant imported Heavy Melting Scrap (HMS) against 4 Bills of Entry in March 2015. The department directed inspection of the goods by a Chartered Engineer, leading to conflicting reports on the usability of the imported scrap.

2. The appellant argued that their intention was not to import serviceable material disguised as scrap, as indicated by their willingness to mutilate and convert the material into scrap for clearance. The appellant referred to precedents set by the Tribunal in similar cases to support their argument. The contention revolved around the classification of the imported scrap as serviceable material, leading to duty demand.

3. The Tribunal found merit in the appellant's argument, noting the conflicting reports from different Chartered Engineers. Considering the appellant's offer to mutilate and convert the material into scrap for clearance, the Tribunal directed that before clearance, the imported scrap could be mutilated and allowed to be cleared as scrap at the appellant's cost. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.

4. The decision highlighted the importance of resolving disputes regarding the classification of imported goods and the possibility of converting disputed material into a form acceptable for clearance. The Tribunal's decision aligned with established legal principles and precedents set by previous judgments, ensuring a fair resolution in line with the law.

5. In conclusion, the judgment provided clarity on the classification and clearance of imported goods, emphasizing the need for proper assessment and resolution of disputes to facilitate the lawful importation and clearance of goods. The appellant's intention and willingness to comply with the requirements for clearance played a crucial role in the Tribunal's decision to allow the appeal and set aside the impugned order.