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TMI Blog2007 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.300 MT's. On the basis of specific intelligence regarding concealment of undeclared goods in the containers, the DRI detained the containers for detailed examination. On weighment, the total weight of the goods imported was found to be 128.486 MTs, showing an excess weight of 8.186 MT's vis-a-vis the declared weight. Subsequently, on detailed examination of the goods by a Chartered Engineer engaged by the Customs authorities, the containers were found to contain 300 used diesel engines of TOYOTA, IZUZU and NISSAN models. The Chartered Engineer reported thus :- The engines examined were found used, and are in need of reconditioning, replacement of parts, fitment of missing parts and thorough overhauling before being put into use. About ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been used for concealment of the engines, under Section 119 of the Act and (vi) impose personal penalty on the noticee under Section 112 of the Act. The party had paid an amount of Rs. 12.5 lakhs during the course of investigations. The show-cause notice also proposed to appropriate this payment towards the demands raised therein. The above proposals were contested by the party in their reply to the notice. In adjudication of the dispute, learned Commissioner of Customs passed the following order (i) I confiscate the Iron Scrap (Mixed) of quantity 83.266 MTs valued at Rs. 5,31,486/- (C.I.F.) under Section 119 of the Customs Act, 1962. However, I give the option to redeem the goods on payment of a fine of Rs. 53,000/- (Rupees fifty three t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 8(a) to Section XV of the First Schedule to the Customs Tariff Act. This Section Note reads as under :- "Metal waste and scrap from the manufacture or mechanical working of metals and metal goods definitely not useable as such because of breakage, cutting up, wear or other reasons." It is submitted that, even according to the Chartered Engineer's report, the diesel engines were not useable as such on account of damages and, therefore, such engines should have been treated as 'waste and scrap' within the meaning of this expression given above. In that event, there was no mis declaration by the appellants and, therefore, confiscation of the diesel engines by the Commissioner was not warranted. As regards the scrap imported along with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engines could be used either by replacement of worn-out parts or by effecting repairs of damaged parts or by fitment of missing parts. According to learned SDR, such engines, which could be serviced in the above manner and used as diesel engines, were not covered under the definition of "Waste and Scrap given under Section Note 8(a). It is submitted that, in similar cases, diesel engines of the same models as imported by the appellants, imported along with heavy melting scrap by certain other parties, were held liable for confiscation under Section 111 of the Customs Act and scrap used for concealing such engines was held liable for confiscation under Section 119 of the Act. In this connection, reference has been made to the Tribunal's deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acement of damaged parts, fitment of missing parts and/or overhauling. What is envisaged under the Section Note is that metal goods not so useable would come within the meaning of the expression "Waste and Scrap" and not metal goods which were capable of being used as such after minor operations such as reconditioning, repairs etc. A different interpretation of the Section Note would not be in keeping with the legislative intent and, on the other hand, can only pave the way for import of serviceable machinery in the guise of 'waste and scrap' by unscrupulous importers. We, therefore, reject the argument advanced by learned Counsel with reference to Section Note 8 (a). 6. It is found that the diesel engines which were serviceable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scrap became liable for confiscation under Section 119 of the Act. 7. We have come across similar cases cited by learned SDR. In the case of Chandra Enterprises (supra), diesel engines of NISSAN and TOYOTA models were found to have been imported along with 'heavy melting scrap' and sought to be cleared under a bill of entry which declared the entire material as scrap. The engines were confiscated under Section 111 of the Act and the scrap used for concealing the same were confiscated under Section 119 of the Act. Both the confiscations were upheld by the Tribunal. The facts of the case of Orion Business Systems (supra) are also, more or less, similar. 8. In the impugned order, learned Commissioner imposed a redemption fine of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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