2005 (3) TMI 294 - AT - Customs

Summary

Issues:
Classification of imported goods as Heavy Melting Scrap (HMS) or pipes, Valuation of the impugned goods, Confiscation of goods under Section 111(m) of the Customs Act, Imposition of penalty on the importer.

Classification of imported goods:
The appellant imported goods declared as Heavy Melting Scrap (HMS) but were found to be old, used, and rusted pipes upon examination by DRI Officers. The Commissioner classified the goods as pipes under Chapter heading 7304.29, determining the value at US $150 per metric ton and imposing penalties. The appellant contended that the goods were only used as melting scrap, supported by expert certificates, and that the pipes did not meet the specifications for classification as pipes. The Tribunal observed that the condition of the pipes was unclear, and the key issue was whether the goods qualified as HMS, not whether they could be classified as pipes. The Tribunal analyzed previous court decisions regarding the usability of old pipes and concluded that the impugned goods were classifiable as pipes, not HMS.

Valuation of the impugned goods:
The Commissioner rejected the transaction value due to mis-declaration and determined the value at US $150 per metric ton, rejecting the importer's declared value of US $110 per metric ton. The appellant argued against mis-declaration, but the Tribunal upheld the rejection of the transaction value based on the classification of the goods as pipes. Since the goods were mis-declared, the value was determined in accordance with Customs Valuation Rules, leading to the acceptance of the higher value of US $150 per metric ton.

Confiscation of goods and imposition of penalty:
The goods were held liable for confiscation under Section 111(m) of the Customs Act by the Commissioner. The fines and penalties imposed were deemed appropriate by the Tribunal, and no interference was made with the Commissioner's decision in this regard. Consequently, the appeal was rejected, affirming the classification of goods as pipes, the valuation at US $150 per metric ton, the confiscation under Section 111(m), and the penalties imposed on the importer.