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2023 (5) TMI 456 - AT - CustomsValuation of imported goods - misdeclaration of goods - 288.300 MTS of Heavy Melting Scrap - rejection of declared value in respect of the 87.350 MTS of Rail Material Scrap and re-determination of the same - classification of impugned goods under CTH 72.04 or 73.02 - applicability of Circular No. 8/2006-Cus dated 17.01.2006 - Commissioner (Appeals) allowed the appeal of the Importer / respondent - HELD THAT - Show cause notice was waived by the party vide their letter dated 14.05.2013 accepting mis-description. This letter was never produced before the appellate authority and therefore the Commissioner (Appeals) has been misled by them. In view of the said letter there is a lot of factual similarity in this case with the matter of COMMISSIONER OF CUSTOMS (SEA PORT-IMPORT) CHENNAI VERSUS INDO DEUTSCHE TRADE LINKS AND ANR 2017 (3) TMI 488 - SUPREME COURT where it was held that classification under 7204 for used rails declared as Heavy Melting Scrap on importation was improper and product was correctly classifiable under Heading 7302 when assessee itself in a letter to Department admitted misdeclaring imported cut Rails as heavy melting scrap and requested for condonation of misdeclaration and admitted value declared to be under lower side and accepted its value for rectification. The order of Hon ble Supreme Court needs to be followed in the present matter - order of Commissioner (Appeals) is therefore set aside - appeal allowed.
Issues:
The judgment involves the following Issues: 1. Appeal against the order of Commissioner (Appeals), Kandla. 2. Misdeclaration of goods leading to confiscation, penalty, and duty imposition. 3. Applicability of Circular No. 8/2006-Cus. 4. Interpretation of Customs Valuation Rule, 2007. 5. Admissibility of letter dated 14.05.2013 in the appeal process. Issue 1: Appeal against the order of Commissioner (Appeals), Kandla: The departmental appeal was made against the impugned order of the Commissioner (Appeals), Kandla, issued on 17.10.2013. Despite multiple prior board appearances with no representation from the respondent or requests for adjournment, the matter was decided to be heard on merits. An Amicus Curiae was appointed for the respondent to ensure justice. Issue 2: Misdeclaration of goods leading to confiscation, penalty, and duty imposition: The appellant had filed for clearance of Heavy Melting Scrap but upon examination, it was found to contain Rail Material Scrap as well. The adjudicating authority re-determined the value of the rail material, ordered confiscation with a redemption fine, imposed penalties, and ordered payment of duty. The Commissioner (Appeals) set aside the adjudication order in favor of the party, leading to the department's appeal seeking to restore the original order. Issue 3: Applicability of Circular No. 8/2006-Cus: The appellant argued against the application of Circular No. 8/2006-Cus, stating that the examination report did not mention the goods as used rails. They also cited a previous court decision quashing the circular, questioning the adjudicating authority's reliance on it. Issue 4: Interpretation of Customs Valuation Rule, 2007: The department contended that mentioning the wrong rule of the Customs Valuation Rule, 2007 does not invalidate the order. They supported this with legal precedents and highlighted the classification of 'used rails' under CTH 7302, not CTH 7204, as per the HSN note and relevant circulars. Issue 5: Admissibility of letter dated 14.05.2013 in the appeal process: The department argued that the letter dated 14.05.2013, where the party accepted mis-description, was not considered by the Commissioner (Appeals), leading to a factual similarity with a Supreme Court decision. The bench, inclined to follow the Supreme Court's decision, allowed the departmental appeal based on the letter's content and its relevance to the case. In conclusion, the order of the Commissioner (Appeals) was set aside, and the departmental appeal was allowed, pronouncing the judgment in open court on 10.05.2023.
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