2018 (7) TMI 349 - AT - Customs

Classification of imported goods - MTS Heavy Melting Scrap - Adjudicating authority held that the importer had mis-declared the goods as heavy melting scrap instead of used ship anchoring chains and ordered confiscation of the imported goods - N/N. 21/2002 (SI. No. 200) - whether the goods are to classified under CTH 73151220 or under CTH 72044900? - Held that - A reference to the inspection report at the originating end clearly tells us that the goods are in the nature of scrap/second hand/defective and that such goods are to be considered as scrap as per the Internationally accepted parameters for such classification. It is noteworthy that the inspection agency at the Port of Export is one of the agencies recognized by DGFT for such classification. Secondly, such a classification report cannot be completely ignored. The goods imported which have been declared as melting scrap, have been held to be otherwise by the customs authorities mainly in view of the goods were in running length. But in the light of the opinion of various agencies including that of the certification agency at the Port of Export we are of the view that the imported goods are required to be considered as metallic scrap as per the internationally accepted parameters for such classification. there are no justification to disregard such evidences and order reclassification under 7315 as second hand goods - Confiscation not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Mis-declaration of imported goods as heavy melting scrap, Classification of imported goods as new anchor chains, Benefit of customs exemption notification, Confiscation of imported goods, Demand of duty.

Analysis:
1. Mis-declaration of imported goods: The appellant filed a Bill of Entry declaring the goods as "MTS Heavy Melting Scrap" to claim the benefit of a 'nil' rate of basic customs duty. However, upon examination, the goods were found to be new anchor chains instead of heavy melting scrap. The customs authorities held that the importer mis-declared the goods, leading to the confiscation of the imported goods, denial of customs exemption, and imposition of differential duty, fine, and penalty.

2. Classification of imported goods: The appellant argued that the goods were used ship anchoring chains, certified as such by an independent Chartered Engineer and the Port of Export agency. The goods showed signs of rusting, pitting, and irregular cutting, indicating their unsuitability for reuse. Despite being in running length, various inspection reports and opinions supported the classification of the goods as metallic scrap based on internationally accepted parameters.

3. Benefit of customs exemption notification: The appellant contended that there was no mis-declaration and they were entitled to the benefit of the customs exemption notification. However, the authorities maintained that the goods did not qualify as heavy melting scrap, leading to the denial of the exemption and imposition of additional duties.

4. Confiscation of imported goods: The customs authorities proposed the classification of the goods under a different category, attracting additional duties and confiscation due to mis-declaration. The adjudicating authority upheld the confiscation and demanded differential duty, fine, and penalty.

5. Demand of duty: The revenue department argued for the classification of the goods under a category attracting 10% BCD, 10% CVD, and additional cess and SAD. The authorities justified the confiscation and duty demands based on the examination results and the nature of the imported goods.

In conclusion, the Appellate Tribunal set aside the impugned order, allowing the appeal based on the evidence presented regarding the nature and classification of the imported goods as metallic scrap rather than new anchor chains. The tribunal emphasized the importance of internationally accepted parameters and inspection reports in determining the appropriate classification, thereby rejecting the confiscation and duty demands imposed due to mis-declaration.