2013 (8) TMI 356 - AT - Customs

Goods whether seconds/ defective or not - Import of Non-alloy Hot-rolled Cut Steel Sheets - importer claimed the benefit of notification No.21/2002 which prescribes nil basic customs duty on such goods other than seconds and defectives Held that - On visual inspection the goods appeared to be secondary ad not of prime quality - the price declared for the goods under import match with those for prime material - It does not appeal to common sense or logic that any prudent man would pay the price of prime metal for procuring seconds/defective material order of the department for demand of duty was set aside appeal decided in favour of assessee.

Summary

Issues:
- Interpretation of notification No. 21/2002-Cus for customs duty exemption on imported goods.
- Determination of the quality of imported steel sheets.
- Assessment of evidence provided by the importer and customs authorities.
- Discrepancy between visual examination report and manufacturer's Mill Test Certificates.
- Prima facie evidence of mis-declaration or quality issues in imported goods.

Interpretation of Notification No. 21/2002-Cus:
The case involved the appellant importing non-alloy hot-rolled cut steel sheets claiming customs duty exemption under notification No. 21/2002-Cus. The goods were found heavily rusted during a visual examination, leading to a proposal for differential duty payment and confiscation. The adjudicating authority accepted the importer's evidence, including manufacturer's Mill Test Certificates, and dropped the proceedings. However, the Revenue appealed, arguing that the goods were not of prime quality based on the visual examination report.

Determination of Quality of Imported Goods:
The Revenue contended that the heavily rusted condition and absence of proper labels on the steel sheets indicated they were not of prime quality. The lower appellate authority sided with the Revenue, setting aside the adjudicating authority's decision. The appellant defended the quality of the goods, emphasizing that the details in the Mill Test Certificates matched the imported goods and the declared price aligned with prime material.

Assessment of Evidence Provided:
The appellant highlighted the lack of additional evidence besides the visual inspection report to prove the goods were seconds/defective. They argued that the manufacturer's certificates and matching details supported the claim of prime quality. The Revenue maintained that the differential duty payment by the appellant implied agreement with the examination report findings.

Discrepancy Between Reports:
The Tribunal analyzed the import documents, including invoices and certificates, noting the consistency with the goods under import. They questioned the reliance solely on the visual examination report and the absence of independent testing to verify the goods' quality. The declared price for the goods aligned with prime material, raising doubts on the mis-declaration allegations.

Prima Facie Evidence of Mis-Declaration:
Ultimately, the Tribunal found the Revenue's case lacked reliability and acceptability. They emphasized the importance of concrete evidence to prove mis-declaration, especially when the declared price matched prime material rates. Consequently, the impugned order was set aside, and the appeal was allowed, granting relief to the appellant in accordance with the law.