2019 (8) TMI 391 - AT - Customs

Import of prime quality SS CR coils - exemption denied on the ground that the goods are not of prime quality - Benefit of N/N. 12/2012-Cus dated 17.03.2012 (Sr. No. 330) - Revenue s allegation is largely based on the fact that width of the material is less than 600 MM, weight of each coil is less than 3 MT and the fact that MTC given is not coil wise, a general MTC - HELD THAT - It is seen that the objections raised by the Revenue are not supported by the Standing Order. In the instant case, the MTC has been produced. There is no requirement in the Standing Order that the MTC should be coil wise. The Standing Order clearly recognize the prime goods can be shipped in varying quality, thickness, width and length. It recognize that goods of same size of same thickness are of same homogeneous dimension cannot be regarded as Stock Lot/Ex-stock . It clearly states that the main criteria for identifying the goods has been that consignment should be presented in mixed variety, size and thickness, that too in small quantity supported by manufacturer, Invoice or Mill Test Certificate. Revenue has also relied on the Ministry of Steel Guidelines. The guidelines of Ministry of Steel prescribe that in respect of coil roll (coated, non-coated, electrical) sheet/ strip/ coil, CR Sheets, including electrical sheet and all qualities of coated sheet (galvanized and electro galvanized, aluminized, tin plated, chrome-plated, pre-painted and lead-coated) in mixed non-homogeneous bundles with a unit weight of less than three tonnes, or in coils or less than three tonnes prescribe following as product of non-standard dimensions - We find that the above guidelines are at variance with the standing order. While the SO recognizes mixed lot at prime quality. These guidelines describe them as Non Standard product. Even these guidelines do not describe these as Seconds and defective . Appeal allowed.

Summary

Issues:
Confirmation of demand of customs duty, change of classification, imposition of redemption fine on provisionally released goods, interest, and imposition of penalty under Section 1129a) of the Customs Act, 1962.

Detailed Analysis:
1. Confirmation of Demand of Customs Duty:
The appellant, a manufacturer of SS Pipes and Tubes, imported goods and claimed exemption under Notification 12/2012-Cus dated 17.03.2012. Revenue alleged that the imported goods were not prime quality, leading to the denial of exemption and a demand for differential duty. The dispute centered around the width and weight of the imported coils, with Revenue claiming they did not meet the criteria for prime quality. The appellant argued that their goods were of homogenous quality, without defects, and met the standards of prime quality. They provided supporting documents such as invoices, packing lists, and Mill Test Certificates (MTC) to substantiate their claim.

2. Change of Classification and Imposition of Redemption Fine:
Revenue attempted to change the classification of the goods based on the width and weight of the coils. However, the Tribunal found that the differences highlighted by Revenue did not disqualify the goods from being classified as prime quality under the relevant notification. The Standing Order issued by the Customs House was examined, which outlined criteria for identifying prime and non-prime goods. The Tribunal noted that the MTC provided by the appellant met the requirements specified in the Standing Order, and the goods were consistent with prime quality standards.

3. Imposition of Penalty and Interest:
In addition to the demand for customs duty, Revenue imposed penalties and interest under Section 1129a) of the Customs Act, 1962. The appellant argued that the demand related to past consignments was unfounded as the goods were assessed appropriately at the time of import. The Tribunal agreed with the appellant's contention that the demand, especially relating to CVD, was largely revenue-neutral as the appellant could avail credit for the same.

4. Decision and Ruling:
After considering the arguments and submissions from both parties, the Tribunal found merit in the appeal filed by the appellant. The Tribunal emphasized that the Standing Order and Ministry of Steel Guidelines did not support Revenue's allegations against the quality of the imported goods. The Tribunal concluded that the goods imported by the appellant met the criteria for prime quality as per the relevant notification and Standing Order. Therefore, the appeal was allowed in favor of the appellant.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the key issues of confirmation of demand of customs duty, change of classification, imposition of redemption fine, interest, and penalty under the Customs Act, 1962, providing a comprehensive understanding of the legal proceedings and the Tribunal's decision.