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TMI Blog2018 (2) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant has filed these appeals against the following order sin the impugned orders:- In Appeal No.C/60450/_2017 List of steel products under mandatory Bureau of Indian Standards certification. Indian Standard number Title ITC (HS) Code Date of coming into force of the product in the standard to the extent given below (1) (2) (3) (4) (A) Product (B) With effect from Xx Xx Xx Xx Xx 3 IS 513 Cold reduced low carbon steel sheets and strips 720915 720916 720917 720918 720925 720926 720927 720928 72099000 721123 72119090 (a) Products confirming to grade designation CRI, CE2, CR3, CR4, CR5 18 th December, 2016 (b) For produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e differential duty, fine, penalty or interest as may be leviable on such goods, if these are held to be other than scrap. (iv) The Assistant Commissioner (Shed), CFS OWPL, Ramgarh, Ludhiana shall issue a Detention Memo for the goods from the period for which they remained a detained in terms of regulation 6(1)(e) of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR, 2009). 2. As the issue in both the appeals is identical, therefore both the appeals are dealt by this common order. 3. The brief facts of the case are that the appellant filed two bills of entry Nos.8155288 dated 10.01.2017 and 8414179 dated 02.02.2017 for import of Heavy Melting scrap at ICD, OWPL Ludhiana declaring the grade of the scrap as ISRI 207. The said goods were examined and on detailed examination of the consignment declared as Heavy Melting scrap ISRI code 207, the imported goods were found containing CR sheets/sheet cutting cut to various sizes weighing 132.895MT and 159.575MT respectively. The same were detained and ordered to be released provisionally on the conditions mentioned in Para 1 hereinabove. Aggrieved from the said orders, the appellant is before us. 4. Ld. Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material was reported as scrap. The said report is also on the basis of eye estimation without obtaining any market opinion or even segregation and weighment of the material, despite the request made by the appellant. He further submits that on the said findings the goods imported were detained and later on seized and assessed provisionally. The appellant, aggrieved from the said reports, had requested for re-examination by another Chartered Engineer and the services of Shri Varun Chandok was obtained, who after considering the definition of secondary and defective goods as per criteria issued by Ministry of Steel, ISRI specification and definition of scrap as per Chapter Note XV 8(b) vide his report dated 01.03.2017 reported that since the material produced is in mix condition, the size of the material lying in definition of ISRI Busheling i.e. 2 feet by 5 feet may be considered as scrap. However, it was specifically mentioned in the said report that in order to ascertain the marketability of the said goods the market enquiry can be conducted and its reuse can be ascertained from National Institute of Secondary Steel (NISST), Mandi Gobindgarh. It is his submission that despite th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anil Soni and Shri Rajesh John cannot be relied upon as they have failed to consider the criteria laid-down under the ISRI for import of scrap. Therefore, for the failure of giving any valid reason for imported scrap not falling under the said criteria, the opinion classifying the goods under the category of secondary and defective sheets, cannot be accepted. Further, the department has not accepted the conclusion and report of the said Chartered Engineers. It is his submission that adjudicating authority has relied on the reports of the report of Chartered Engineers Shri Anil Soni and Shri Rajesh John who are not metallurgical engineers and are not competent to give such reports and to the contrary, Chartered Engineer Shri Varun Chandok has categorically held that the goods imported by the appellant are scrap as per ISRI. Moreover, the said Customs empanelled Chartered Engineer who had jointly examined the material with the help of Metallurgical Engineer Shri Tophanwala has reported that since the material falls within the criteria specified under ISRI, the same falls under the category of Heavy Melting Scrap. The recommendation of the said chartered engineer for obtaining the mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. The observation of the adjudicating authority is on the basis of assumption and presumptions that the material imported in the guise of scrap can be re-used by the appellant. In view of the above, he prays the impugned orders are to be modified and the Condition No.2 in the impugned orders are required to be deleted. 6. Ld. AR opposed the contention of the Id. Counsel and submits that before the Hon'ble High Court, the appellant themselves submitted that they may be allowed the goods after mutilation. He submits that as per Section XV 8(a) defines the waste and scrap metal waste and scrap obtained from the manufacture or mechanical working of metals and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons. Admittedly, the Chartered Engineer has given the report that the goods in question can be re-used therefore, the authorities below have rightly allowed the release of goods after mutilation. 7. Heard the parties, considered the submissions. As per the Standing Order No.02/Cus/2013 dated 30.05.2013, the assessment of HMS Scrap mixed with re-rollable/ Serviceable Material. Relevant portion of the said Standing order is ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is less than 10%. Further, with respect to Bill of Entry No.8155288 dated 11.01.2017, as per report of Shri Rajesh John, out of the total declared weight of 159.75 MTs the MS Sheet cutting/strips/slits (CR) missed coated/ plated width more than 600mm (secondary and defective) weighing 15.75 MTs were found, MS Sheets cutting/strips/slits (CR) width less than 600mm (secondary and defective) which is also less than 10%, as per Standing Instruction dated 30.05.2013. We further find that the goods were examined by Chartered Engineer Shri Varun Chandok with the help of a Metallurgic Engineer, in the presence of Superintendent (SIIB) and after examination of the goods has given the following conclusion:- As per the said report of Chartered Engineer, the goods were held to be scrap as per ISRI and after examining the definition of scrap as per section notes of Section XV 8(a). He also specifically mentioned that with respect to the commercially marketability of the said goods, a market enquiry can be conducted to ascertain the marketability. Admittedly, no market enquiry has been conducted but report has been obtained from NISST, Mandi Gobindgarh. As per the said re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted are Heavy Melting scrap as per ISRI specifications. In that circumstance, we hold that mutilation of the impugned goods are not required. 10. In view of the above discussion, we modify the impugned orders as under:- (i) The goods shall be assessed to duty provisionally on the basis of the declared invoice value, purely for the purpose of provisional release of goods only, without any prejudice to the right of the department to issue the show cause notice on any aspect including valuation. (ii) The importer shall furnish a bond equal to the seizure value i.e. 27,26,429/- of the seized goods to bind himself to pay in case of demand the differential duty, fine, penalty or interest as may be leviable on such goods, if these are held to be other than scrap, subsequently in adjudication. (iii) The Assistant Commissioner (Shed), CFS OWPL, Ramgarh, Ludhiana shall issue a Detention Memo for the goods from the period for which they remained a detained in terms of regulation 6(1)(e) of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR, 2009). 9. The appeals disposed of in the above terms. (Order pronounced in the court on) PER: DEVENDER SINGH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idth less than 600 mm (Second defective) 60 ii) CR sheets/strips/slits width more than 600 mm (Second defective) 05 iii) Coated/plated CR sheet (Second defective) 02 iv) HMS of MS sheet curtns 65.895 (ii) For B/E 8414179 dt.2.2.2017, the summary of the reports given by the empanelled Chartered Engineers are tabulated below: Sr.No. Name of Chartered Engineer Sh. Date Report Description of goods actually found Appx. Quantity MT 1 Sh. Jaspal Singh 17.02.2017 i) HMS 72.00 ii) CR Cut Sheets/strips/slits having uniform dimensions and width less than 600 mm (Second defective) 72 iii) Coated/plated sheet pcs/strips (Second defective) 15.75 2 Varun Chandok 01.03.17 He opined that he could not Rule out any possible re-use of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hine laboratory is an non-BIS approved laboratory whereas on the BIS website, which is in public domain, it is listed as BIS approved laboratory. The laboratory is an UNDP-UNIDO assisted entity of Punjab Govt. 15. I find that both the NISST clarification dt.22.6.2017 and the report dt.18.4.2017 of the RDBSM laboratory, Ludhiana have a direct bearing on the outcome of the adjudication. It will therefore be prudent that these reports, which are subsequent developments after passing of the adjudication order, are examined cumulatively by the adjudicating authority, who will pass a fresh order after giving fair opportunity to appellant to defend their case. 16. In the result, the appeals are disposed of by way of remand in above terms DIFFERENCE OF OPINION As there is divergent views of the Members of this Tribunal, therefore the matter may be placed before the Hon'ble President to appoint third Member to resolve the following issue; Whether the goods can be released provisionally to the appellant as per the terms and conditions of Para 10 of this order, as held by Member (Judicial); OR Whether the matter needs re-examination by the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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