2017 (11) TMI 1247 - AT - Customs

Classification of goods - Heavy Melting Scrap - Revenue formed an opinion that inasmuch as the goods are rail line length of below 1.5 meter, they are properly classifiable under tariff item 7302 10 90 of CTA, 1975 - whether the rail cut length below 1.5 meters are to be assessed under chapter heading 72.04, as claimed by the assessee or the same are classifiable under chapter heading 73.02, as contended by the Revenue - Held that - the Hon ble Supreme Court s decision in the case of Union of India Vs. Madras Steel Re-Rollers Association 2012 (8) TMI 788 - SUPREME COURT OF INDIA referred, wherein the Hon ble Madras High Court decision reported in 2007 (6) TMI 222 - HIGH COURT OF JUDICATURE AT MADRAS as also the Hon ble Punjab & Haryana High Court decision in GURUDEV OVERSEAS LTD. Versus CENTRAL BOARD OF EXCISE & CUS., NEW DELHI 2007 (11) TMI 317 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH vide which the Circular No.8/2006-Cus dated 17.01.2006 was quashed and set aside, vide which that said decisions of High Courts were set aside and the matters were remanded back to the lower authorities, without expressing any opinion on the merits of the issue - matter to the original adjudicating authority for fresh decision in the light of the observations made by the Hon ble Supreme Court - Supreme Court has held in the said decision that Such orders are required to be passed by exercising independent mind and without impartiality and while doing so, such Authorities are required to consider various evidences made available to them - appeal allowed by way of remand.

Summary

Issues: Classification of Heavy Melting Scrap - Applicability of Customs Tariff Act - Challenge to Revenue's Opinion - Interpretation of Chapter Note 8 of Section XV - Reliance on Board's Circular and DGFT Clarification - Reference to Tribunal Decisions - Reversal of Tribunal Decision by Supreme Court - Quashing of Board Circular by High Courts - Remand for Fresh Decision by Original Adjudicating Authority

In the judgment delivered by the Appellate Tribunal CESTAT CHANDIGARH, the issue at hand involved the classification of Heavy Melting Scrap under the Customs Tariff Act, 1975. The appellant had filed bills of entry for the clearance of the scrap, claiming a concessional rate of duty under a specific notification. However, the Revenue disagreed with this classification, asserting that the goods should be classified differently, attracting a higher duty rate. The matter was adjudicated upon, and the Revenue's classification was upheld, leading to the confirmation of differential duties.

The appellant challenged this decision before the Commissioner (Appeals), who also upheld the Revenue's classification. The appellant, supported by their advocates, relied on Chapter Note 8 of Section XV of the Customs Tariff Act, arguing that the goods in question should be considered waste and scrap due to being old, used, and cut pieces of rail lines. They further referenced a Board's Circular and a DGFT clarification to support their stance. Additionally, they cited Tribunal decisions that supported their interpretation of the classification of such goods under a specific chapter heading, benefiting from a relevant notification.

On the other hand, the Revenue contended that a Supreme Court decision had reversed a Tribunal decision similar to the one cited by the appellant. They also referred to other legal precedents, including decisions from High Courts, to challenge the appellant's arguments. The Revenue highlighted the quashing of a Board Circular by the High Courts and the subsequent remand of related matters by the Supreme Court.

After considering the arguments presented, the Appellate Tribunal concluded that the crucial issue to be determined was whether the rail cut length below 1.5 meters should be assessed under a specific chapter heading as claimed by the appellant or classified differently as argued by the Revenue. Given the legal developments and the remand of related matters by the Supreme Court, the Tribunal decided to set aside the impugned order and remand the case to the original adjudicating authority for a fresh decision in line with the observations made by the Supreme Court. Consequently, the appeals were allowed by way of remand, emphasizing the need for a re-evaluation of the classification issue at hand.