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TMI Blog2004 (4) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... re, were told by Shri Puneet Bhatia (Director of the appellant-company and appellant in Appeal No. C/2557/94) that 6 more containers were yet to be received. On 23-2-93 itself, the officers seized certain documents from the premises. Subsequently, the six containers were received in the factory and were unloaded in the presence of the Central Excise officers and representatives of the company, namely, Puneet Bhatia (Director) and Rajesh Kumar Jha (Supervisor). All the imported/destuffed goods (from all the 10 containers) were segregated into BS scrap and other goods viz. tin-coated discs, tin-coated sheets, zinc-coated sheets, zinc-coated coils and uncoated coils and were separately weighed. This was done in Mahazar proceedings dated 5-3-93 of Central Excise officers, witnessed by Shri Puneet Bhatia and independent witnesses. The other goods weighed 55.315 MTs, leaving the weight of BS scrap to be estimated as the difference, 211 - 55.315 = 155.685 MTs. It was believed by the officers that the tin/zinc-coated materials and the uncoated coils were not scrap but serviceable goods and the same had been imported by the appellants by misdeclaring the goods as scrap with intent to evad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d coils, etc. totally weighing 55.315 MTs valued at Rs. 7,62,551/- under Sections 111(d), (f), (1) (m) of the Customs Act, 1962 and allow M/s. A.R.S. Metals (P) Ltd. to redeem the same on payment of redemption fine of Rs. 1,00,000/- (Rupees one lakh only) within a period of 3 months from the date of receipt of this order. I also confirm Rs. 9,76,622/-, being the differential duty from M/s. A.R.S. Metals (P) Ltd towards 55.315 MTs of zinc/tin coated sheets/coils and uncoated coils under Section 28 of the Customs Act, 1962. I also confiscate 155.685 MTs of Bushling scrap imported under Bill of Entry No. 5281, dtd. 15-2-93 (HC 0203924, dt. 20-2-93) under Section 119 of the Customs Act, 1962. However, I allow the same (detained and provisionally released under bank guarantee) to be redeemed on a fine of Rs. 40,000/- (Rupees forty thousand only) within a period of 3 months from the date of receipt of this order. The bank guarantee furnished by M/s. A.R.S. Metals (P) Ltd., for Rs. 1,85,745/- may be adjusted for the redemption fine. I also impose a penalty of Rs. 1,00,000/- (Rupees one lakh only) on M/s. A.R.S. Metals (P) Ltd., and Rs. 25,000/- (Rupees twenty five thousand only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating authority not to allow mutilation of the seized goods was not in accordance with the law laid down by the Hon ble Supreme Court and the Hon ble Calcutta High Court. In this connection, Counsel relied on the following decisions :- (1) Union of India v. Shine Woollen Mills (P) Ltd., 1999 (111) E.L.T. 321 (S.C.) (2) Lakhotia Udyog v. Union of India, 1992 (58) E.L.T. 385 (Cal.) (3) G.H. Shaikh v. CC, Pune, 2003 (151) E.L.T. 190 (Tri. - Mumbai) Referring to the chemical test report, the learned Counsel submitted that the said report provided no basis for the Collector s finding that the goods in question were serviceable. According to learned Counsel, the report of the Chemical Examiner was not reliable inasmuch as his laboratory was not equipped to determine whether the samples were of Iron/Steel. Counsel also faulted the Mahazar proceedings of 5-3-93. Further, he cited instances of the Departmental authorities having allowed mutilation of imported goods in similar circumstances. 5. Ld. DR relied on the Mahazar dated 5-3-93 in support of the department s case that, by the time the officers of the department visited the factory, the appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lurgist of the department having identified the other goods as tin-coated discs, tin-coated sheets, zinc-coated sheets, zinc-coated coils and uncoated coils of non-alloy steel. Ld. Collector s finding to the contra cannot be sustained. Though destuffing of four containers by the appellants in their factory prior to 23-2-93 is not in dispute, segregation of the goods prior to that date has not been admitted by them. The department has not proved it either. We, therefore, sustain the appellants contention that they had not segregated the goods destuffed from the four containers, into BS scrap and other goods before the officers first visit (on 23-2-93) to the factory. In so far as the remaining six containers are concerned, admittedly, both destuffing and segregation were done in the presence of officers of Central Excise. The mahazar dt. 5-3-93, to the extent held to be admissible evidence, is conclusive proof of such segregation of all the imported goods (from all 10 containers) into BS scrap and other goods. It also provides the separate weight (55.315 MTs) of the other goods viz. tin/zinc-coated materials and uncoated coils. Thus it appears that it was only when the segrega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot called upon to determine whether the goods were usable as such. Ld. Collector himself inspected the goods in question and found them to be tin-coated discs etc. and to be different from the declared steel scrap. This finding will be rejected at once for obvious reasons. To state the obvious, we may pen down that it was not within the competence of the learned Collector to record such a finding of technical nature. Even an expert might not, without chemical test, identify the metal coated on the surface of another metal or alloy. Now that both the test report and the Collector s visual observation have proved futile in supporting the Department s case that the tin-coated discs etc. imported by the appellants were serviceable goods and not scrap, we do not find room for applying the definition of scrap as per HSN notes to Chapter 72. 8. On the mutilation issue, both sides have argued at length. Ld. Counsel has contended that, under Section 24 of the Customs Act, it was permissible for the Commissioner to allow mutilation of the goods. He has heavily relied on Calcutta High Court s decision in Lakhotia Udyog v. Union of India (supra) and the Apex Court s judgment in Shine Wooll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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