1988 (3) TMI 352 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods as stainless steel scrap.
2. Valuation and under-valuation of imported goods.
3. Legitimacy of import licenses for the imported goods.
4. Confiscation and fines imposed on the imported goods.
5. Reduction of fines imposed in lieu of confiscation.

Analysis of Judgment:

1. Classification of Imported Goods as Stainless Steel Scrap:
The primary issue was whether the imported goods could be classified as stainless steel scrap. The appellant claimed the goods were stainless steel scrap, but 100% examination revealed the goods included stainless steel rods, fabricated plates, stainless steel strips, sheets, and coils. The Collector of Customs applied the definition of "waste and scrap" from Note 6 to Section XV of the Customs Tariff Act, 1975, which defines waste and scrap as metal fit only for recovery or use in manufacturing chemicals. The Tribunal confirmed that the goods were not old industrial scrap but could be considered defectives and seconds, which do not qualify as scrap under the Import Trade Policy.

2. Valuation and Under-Valuation of Imported Goods:
The revenue authorities suspected under-valuation as the goods were found to be serviceable items like sheets, strips, and coils, which were being imported at a higher rate than declared. However, the Collector accepted the invoice value as there was no evidence of under-valuation. The Tribunal did not find any reason to dispute this valuation.

3. Legitimacy of Import Licenses for the Imported Goods:
The licenses produced by the appellant were valid for the import of stainless steel scrap only. Since the imported goods were not considered scrap, the licenses were deemed invalid for these imports. The Tribunal upheld the findings of the lower authorities that the licenses produced were not acceptable for the goods imported.

4. Confiscation and Fines Imposed on the Imported Goods:
The goods were ordered to be confiscated under Section 111(d) and 111(m) of the Customs Act, 1962, but the importers were allowed to redeem them under Section 125 of the Customs Act, 1962, after paying fines of Rs. 35,000/-, Rs. 47,000/-, and Rs. 16,000/- for the respective consignments. The Tribunal confirmed the classification and confiscation but reviewed the fines.

5. Reduction of Fines Imposed in Lieu of Confiscation:
The Tribunal considered the totality of circumstances and reduced the fines for Bill of Entry No. 1603/100 of 22-12-1979 and 1821/57 of 20-2-1980 from Rs. 47,000/- and Rs. 16,000/- to Rs. 35,000/- and Rs. 10,000/- respectively. This resulted in a total relief of Rs. 18,000/- for the appellant. The appeal was otherwise rejected, and the findings of the lower authorities were confirmed.

Conclusion:
The Tribunal upheld the classification of the imported goods as defectives and seconds, not qualifying as scrap. The valuation as declared was accepted, but the import licenses were deemed invalid for the goods imported. Confiscation was confirmed, but fines in lieu of confiscation were reduced. The appeal was largely dismissed except for the modification in fines.