1995 (6) TMI 100 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods as "Brass Dross" or "Brass Scrap."
2. Mis-declaration of the description and value of the goods.
3. Determination of the correct assessable value of the goods.
4. Imposition of penalties under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Classification of Imported Goods as "Brass Dross" or "Brass Scrap":
The primary issue was whether the imported goods were "Brass Dross" falling under Heading 26.02/04 of the Customs Tariff Act, 1975, as claimed by the importers, or "Brass Scrap" falling under Heading 74.01/02, as contended by the Revenue. The Chemical Examiner at Kandla Customs House tested the goods and found them to be composed mainly of an alloy of copper and zinc (brass) with a high metallic content (copper plus zinc) ranging between 93.8% and 96.4%. The physical appearance of the goods was described as grey colored, slightly moistened metallic pieces of irregular shapes and sizes, with some having pointed edges. The high metallic content and the form of the goods indicated that they were not "Brass Dross" but "Brass Scrap."

The importers argued that the Department's finding was based on an opinion given by the Chief Chemist, which was not derived from testing the samples of the imported consignments. However, the Tribunal found that the Chemical Examiner's reports from Kandla Customs House were based on actual tests of the samples and were consistent in showing high metallic content and physical characteristics indicative of "Brass Scrap."

2. Mis-declaration of the Description and Value of the Goods:
The Tribunal upheld the charge of mis-declaration under Section 111(m) of the Customs Act, 1962. The importers had declared the goods as "Brass Dross" with a lower assessable value, whereas the tests revealed that the goods were "Brass Scrap" with a higher market value. The importers' contention that the goods were "Brass Dross" was not supported by the chemical analysis and physical examination of the goods.

3. Determination of the Correct Assessable Value of the Goods:
The provisional assessment was finalized by taking the CIF value as 41 Cents per lb, which was the prevailing contemporary price of "Brass Scrap." The Tribunal referred to previous judgments, including Premier Brass & Metal Works Pvt. Ltd. v. Collector of Customs and P.S. Metal Corporation, Bombay v. Collector of Customs, Bombay, which supported the classification of goods with high metallic content and similar physical characteristics as "Brass Scrap." The Tribunal found that the value determined on the basis of the price of contemporaneous imports of similar goods represented the correct value in terms of Section 14(1) of the Customs Act, 1962.

4. Imposition of Penalties under Section 112(a) of the Customs Act, 1962:
The Collector imposed penalties aggregating to Rs. 9 lakhs on the importers for each consignment under Section 112(a) of the Customs Act, 1962. The Tribunal upheld these penalties, finding that the importers had indeed mis-declared the description and value of the goods, thereby attempting to evade customs duty.

Conclusion:
The Tribunal allowed the appeal filed by the Revenue and rejected the appeals filed by the importers. The imported goods were correctly classified as "Brass Scrap" under Heading 74.01/02, and the charge of mis-declaration of the description and value of the goods was upheld. The penalties imposed under Section 112(a) of the Customs Act, 1962, were also sustained.