2018 (11) TMI 1166 - AT - Customs

Classification of import goods - Aluminum Scrap-Throb - whether the goods in question are Aluminium Scrap-Throb or the same are Aluminium Alloy Ingots ? Held that - There is nothing in the report of CRCL which establishes that the goods are in-fact Ingots. The goods stand described in the imported documents as Aluminium Scrap-throb. They have been converted into ingots shape of varying lengths for the purpose of transportation only, which is permissible as per ISRI. The said issue stands decided by various precedent decisions of the Tribunal - While dealing with more or less identical situation the Tribunal in the case of Commissioner of Customs, Chennai Vs Kamatchi Sponge & Power Coprn. Ltd. 2016 (3) TMI 220 - CESTAT CHENNAI observed that declaration of the goods as Heavy Metal Steel Scrap cannot be converted into the welding pipes merely because 90% of the goods were found to welding pipes. Appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of imported goods as 'Aluminium Scrap-Throb' or 'Aluminium Alloy Ingots'; Differential duty demand; Confiscation of goods; Imposition of penalty.

In this judgment by the Appellate Tribunal CESTAT ALLAHABAD, the issue revolved around the classification of imported goods declared as 'Aluminum Scrap-Throb' under Customs Tariff Sub-heading No.76020010. The appellant imported three containers of goods purchased on high seas sale basis, which were alleged by the revenue to contain metallic ingots of 7-8 inches length, classifiable as Aluminium Alloy Ingots attracting a 5% Basic Customs Duty. The Central Revenue Control Laboratory (CRCL) test report indicated Aluminium content exceeding 90%, leading the revenue to believe the goods were Aluminium Alloy Ingots, contrary to the appellant's declaration of Aluminium Scrap. Consequently, proceedings were initiated for a differential duty demand, confiscation of goods, and imposition of penalties.

The Tribunal considered the submissions from both sides. The revenue argued that the goods should be classified as Aluminium Alloy Ingots due to the high Aluminium content exceeding 90% and other metallic contents exceeding 1%. In contrast, the appellant contended that the goods were purchased as 'Aluminium Scrap-Throb' and converted into ingots for transportation, permissible under ISRI Circular. They emphasized that the test reports did not match any standard of Aluminium Alloy, establishing the goods as Aluminium Scrap. The appellant highlighted ISRI's classification criteria for different types of scrap, emphasizing that the conversion into ingots does not automatically make them Aluminium Alloy Ingots, especially when the foreign suppliers described the goods as Aluminium Scrap-Throb.

The Tribunal analyzed the evidence and previous decisions, noting that the CRCL report did not conclusively prove the goods were ingots. Referring to precedent decisions, including the Tribunal's earlier rulings and a case involving Heavy Metal Steel Scrap, the Tribunal emphasized that mere presence of Aluminium exceeding 90% does not automatically classify the goods as ingots. Ultimately, the Tribunal found no justification to support the Commissioner's order, setting it aside and allowing the appeal with consequential relief to the appellant.