1998 (8) TMI 274 - AT - Customs

Benefit of exemption under Notification No. 151/77-Cus. as amended by Notification No. 35/82-Cus. denied.

Summary

Issues:
- Appeal against decision of Collector of Customs (Appeals) regarding weighment of imported bulk cargo and benefit of customs notification.
- Dispute over the weighment of imported melting scrap of iron or steel.
- Compliance with exemption Notification 151/77-Cus. and Notification 35/82.
- End use certificate and shortage in quantity.
- Nexus between draft weighment and actual weighment for utilization in electric arc furnace.
- Reliance on out turn reports by port authorities.
- Interpretation of provisions of Section 145 of the Customs Act, 1962.
- Discrepancy in quantities received and claimed.
- Relevance of Ministry of Steel and Mines certificate on end use.

Analysis:
1. The appeal was filed against the decision of the Collector of Customs (Appeals) regarding the weighment of imported bulk cargo and the applicability of customs notifications. The Collector (Appeals) had allowed the respondent's appeal, stating that the bill of lading weighment was based on guesswork and relied on the out turn report from Bhavnagar Port for weighment. The respondent had imported melting scrap of iron or steel at Bhavnagar Port, supported by various certificates and documents. The Collector (Appeals) held that there was no nexus between the draft weighment and the actual melting scrap used in the electric arc furnace, thus granting the benefit of the customs notification to the respondent.

2. The department contended that the respondent did not produce the end use certificate in full quantity, justifying the demand confirmed by the Assistant Collector. They argued against the Collector (Appeals)'s reasoning on the lack of nexus between draft weighment and actual weighment, citing natural losses during discharge and the approximate nature of draft weighment. The department also challenged the reliance on out turn reports by port authorities, relying on the Customs Act's provisions for weighment of goods. They pointed out a shortage in quantity as per the certificate issued by the Iron and Steel Control Authority, indicating non-compliance with the exemption Notification 151/77.

3. The Tribunal noted discrepancies in the quantities of imported melting scrap claimed and received, as per certificates from the Iron and Steel Controller. The notifications exempted melting scrap if used in the electric arc furnace, but the actual end use certificates showed less quantity received than claimed. The Tribunal disagreed with the Collector (Appeals)'s reliance on practices at Mumbai and Kandla Ports, emphasizing the requirement for imported material to be used in the electric arc furnace. They highlighted the Ministry of Steel and Mines certificate on end use, indicating a lesser actual quantity received than claimed. Consequently, the Tribunal allowed the department's appeal, overturning the Collector (Appeals)'s decision.