2022 (1) TMI 220 - AT - Customs

Provisional release of goods - Classification of imported goods - Heavy Melting Scrap ISRI Code 200 to 206 - goods were found to be old and used CRGO (secondary Cold Rolled Grain Oriented) Sheets/old and used empty gas cylinder and Table Tennis Rackets - prohibited goods or not - seeking provisional release of goods - HELD THAT - According to the importer, the goods imported are Heavy Melting Scrap ISRI Code 200-206. The Pre Inspection Certificate issued by the agency Wize Services FZE‟ has certified the goods to be Heavy Melting Scrap. The Ld. Counsel has furnished photographs of these goods held by department to be CRGO Sheets.He submits that these are end cuttings and used pieced of metals having homogenous holes in all the pieces. There is no expert opinion placed - it is not considered proper to enter into any discussion as to the nature or the classification as these issues are under investigation and yet to be adjudicated. The Commissioner (Appeals) has thus directed to subject the impugned goods to mutilation before release of the same. When similar import declared as HMS and reclassified and reassessed as CRGO sheets were ordered to be released after mutilation and payment of duty, there are no reason to interfere with the view taken by the Commissioner (Appeals) directing provisional release of the impugned goods. Import of goods in the nature of old and used gas cylinders - main objection raised by Revenue is that the Gas Cylinder Rules prohibit import of gas cylinders which are filled or intended to be filled with any compressed gas - HELD THAT - The Commissioner (Appeals) has ordered for mutilation of these goods so as to render them as scrap. On such score, the contention raised by the Revenue adverting to Gas Cylinder Rules and Explosives Act is without any basis - the view taken by the Commissioner (Appeals) to allow provisional release of the goods is legal and proper. Legality and propriety of the conditions imposed in the impugned order for provisional release of the goods - HELD THAT - The reliance placed by the Commissioner (Appeals) to impose the condition to furnish BG is highly misplaced and misconstrued. In both these decisions, the Hon ble Courts have directed to pay 20/30 percent of the differential duty. In the present case, the importer having paid duty on the declared value and having accepted to pay the entire differential duty, in the interest of justice, the condition to furnish Bank Guarantee equivalent to 30% of value of the goods requires to be waived. The impugned order is modified to the limited extent of setting aside the direction to furnish Bank Guarantee of 30% equivalent to the value of the goods - Appeal allowed in part.

Summary

Issues Involved:
1. Misdeclaration and concealment of imported goods.
2. Prohibition of import of old and used CRGO sheets and gas cylinders without a license.
3. Conditions imposed for the provisional release of goods.

Issue-wise Detailed Analysis:

1. Misdeclaration and Concealment of Imported Goods:
The importer filed four Bills of Entry for clearance of goods declared as "Heavy Melting Scrap (HMS) ISRI Code 200 to 206." Upon examination by DRI officers, it was found that the goods were misdeclared and included old and used CRGO sheets, old and used gas cylinders, and table tennis rackets. The Revenue alleged that the importer indulged in importing these items by way of concealment and misdeclaration.

2. Prohibition of Import of Old and Used CRGO Sheets and Gas Cylinders Without a License:
The Revenue argued that the import of old and used CRGO sheets and old empty gas cylinders without a license is prohibited in India as per various regulations, including the OM dated 9.11.2020 and the Steel and Steel Products (Quality Control) order. The Explosives Act, 1884, and Gas Cylinder Rules, 2016, also prohibit the import of gas cylinders without a proper license. The goods were seized under Section 110 of the Customs Act, 1962, on the belief that they were liable for confiscation under Sections 111 and 119 of the Customs Act, 1962.

3. Conditions Imposed for the Provisional Release of Goods:
The importer requested the provisional release of the goods, which was initially rejected by the adjudicating authority. However, the Commissioner (Appeals) allowed the release of the goods after mutilation, subject to certain conditions, including furnishing a bond equal to the value of the goods, a Bank Guarantee (BG) equivalent to 30% of the value of the goods, and payment of the assessed differential duty. The importer contested the BG condition, arguing it was harsh and contrary to similar cases. The Revenue opposed the provisional release, citing the prohibition of such imports.

Judgment:
The Tribunal considered the arguments from both sides and reviewed the records. It noted that the Commissioner (Appeals) had directed the release of the goods after mutilation, rendering them as scrap, which addressed the concerns regarding the Gas Cylinder Rules and the classification of CRGO sheets. The Tribunal found no reason to interfere with the provisional release order but agreed with the importer that the condition to furnish a BG equivalent to 30% of the value of the goods was not warranted.

Conclusion:
The Tribunal modified the impugned order to waive the condition of furnishing a BG equivalent to 30% of the value of the goods. The appeal filed by the importer was partly allowed, and the appeal filed by the Revenue was dismissed. The goods were to be provisionally released after mutilation, subject to the importer furnishing a bond equal to the value of the goods and paying the differential duty assessed by the department.