2017 (4) TMI 16 - AT - Customs

Classification of imported goods - description of the goods declared by the importer appellant as defective rejects non-alloy steel sheets with tin coating was changed to tin plate waste/waste/tin plate misprints falling under Chapter Heading 72.10 of ITC (HS) - Held that - The test result clearly states that these are not pure tin or tin plates but they are tin coated sheets with few visible imperfections. Tin sheets/tin plates (waste) have to be distinctly different from tin coated sheets. The importer appellant has already declared that these are defective and rejects non-alloy steel sheets with tin coating . When the test report i.e. test result dated 7-11-2003 given by the Chemical Examiner of Cochin Customs supports what has been declared by the appellant, the impugned order on enhancement of value cannot be sustained. Further correct description of the goods is non-alloy steel sheets with tin coating (defective and rejects) , the Department s premise that the subject goods require import licence and that the import of the said goods could be allowed only through Customs Sea Ports of Mumbai, Chennai and Kolkata is not sustainable - the Revenue prima faciely erred in describing the goods wrongly; consequently the impugned order is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Description of goods declared by the importer and its classification.
2. Allegation of undervaluation and misdeclaration by the appellant.
3. Enhancement of goods' value by the Commissioner of Customs.
4. Confiscation of goods, imposition of redemption fine, and penalty.
5. Validity of import license requirement and minimum value for goods.

Analysis:

1. The appellant, M/s. Vividh Traders, appealed against an order changing the description of imported goods from "defective rejects non-alloy steel sheets with tin coating" to "tin plate waste/waste/tin plate misprints" under Chapter Heading 72.10 of ITC (HS). The Commissioner enhanced the value of goods to USD 465 per MT, leading to confiscation, a redemption fine of ?7,00,000, and a penalty of ?2,00,000.

2. The appellant argued that the goods were correctly declared as "defective and rejects non-alloy steel sheets with tin coating" valued at USD 190 per MT, as per the supplier's invoice. They contended that the classification under 72.10 of ITC (HS) was erroneous, and the goods did not require an import license, challenging the arbitrary value adopted by the Department.

3. The Chemical Examiner's report supported the appellant's description of the goods, confirming them as defective/rejected sheets, not waste of tin plates. The appellant asserted that the invoice price should be accepted since there was no evidence of misdeclaration or undervaluation.

4. The Department failed to provide evidence that the adopted value reflected contemporaneous imports of similar goods. The goods imported under different Bills of Entry were not comparable, leading to the conclusion that the Department erred in changing the goods' description and enhancing their value without justification.

5. The Tribunal found that the Commissioner erred in changing the goods' description and that the Revenue's stance on import license requirements was unsustainable. The impugned order was set aside, and the appeal was allowed, granting consequential relief to the appellant. The judgment was pronounced on 7-10-2016 by the Tribunal.