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TMI Blog2018 (5) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... For products other Than (a) above 18th March, 2016 Accordingly, the seized goods mentioned in Table 1 above i.e. CR sheets/strips/slits width less/more than 600mm, coated/ plated sheets/strips/slits which were serviceable and HMS are released on the following conditions under Section 110A of the Customs Act, 1962:- (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 goods mentioned in Table-1 excluding coated/ plated sheets/strips/slits and HMS shall be mutilated so as to render them scrap in such a manner so that they cannot be used as such except for melting in accordance with definition of scrap in Section Note 8(a) of the Customs Tariff and subject to Para 24 of the order. (iii) 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade of the scrap as ISRI 207 which reads as under:- "207 : Busheling Clean steel scrap, maximum size 2 feet by 5 feet, including new factory busheling, (for example, sheet clippings, stampings, etc.). May not include, old auto body and fender stock. Free of metal coated, limed, vitreous enameled, and electrical sheet containing over 0.5 percent silicon." He further submitted that for the purpose of classification of the material as scrap, the Id. Commissioner has issued Standing Order No.02/Cus/2013 dated 30.05.2013 as guidelines wherein vide sub-clause (i), it is mandatory that the importer shall at the time of filing of Bill of Entry declare the ISRI grade of the scrap. The appellant has complied with the said directions as laid-down in the standing order. As per the internationally accepted code of ferrous scrap (ISRI), however, the said goods were detained, wherein examination was conducted with the help of the Chartered Engineer Shri Anil Soni. Shri Anil Soni, who is not the Metallurgical Engineer, vide report dated 17.02.2017 in respect of Bill of Entry No.8414179 dated 02.02.2017 as per visual examination conducted by him, out of the total quantity of 132.895 MTs declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market enquiry was conducted. However, the request of the appellant for getting the goods examined by NISST Mandi Gobindgarh was accepted and after physical examination of the material, vide his report dated 14.03.2017 NISST confirmed that the material imported by the appellant is scrap as per ISRI 207, particularly Busheling Scrap. The said report has been given after considering all the factors of secondary steel, ISRI specification and explanation as per Chapter XV 8(a) of the Customs Tariff. It is his submission that the said institute (NISST) is BIS recognised laboratory. He further submits that despite the fact that the goods were examined by a Government Laboratory under the Ministry of Steels and duly approved by BIS, the goods were not released and the order directing provisional release was passed with the condition of mutilation of the same in order to render them scrap. The said orders were passed only after the intervention of the Hon'ble High Court in CWP No.4879 of 2017 wherein the Hon'ble High Court directed the criteria of mutilation and the conditions of provisional release may be challenged before the Appellate Authority, who shall consider the same as it shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority has erred in relying on Para 3 of the Import control order 2012 as the same is applicable only on importation of sheets/coils in standard length. The material imported by the appellant being scrap in the form of end sheet cuttings and waste of sheets, the same cannot be held to be covered under the said Import Control order of 2012. Therefore, the condition of mutilation cannot be imposed on the appellant for the purpose of release of the goods. He further submits that Chartered Engineer in its reports as well as the NISST vide its report dated 14.03.2017 have specifically held that the material imported by the appellant comprises of different sizes as per the ISRI grade. He submits that once the goods fall under the specification as laid down under ISRI, the question of reclassifying the same under the Chapter Heading of Sheets cannot be accepted, more-so scrap is always generated out of the prime, used and other material, which is waste and discard of prime material and does not have a specific name. He further submits that on the one hand the department discredit the report of the chartered engineer and on the other hand, on the basis of the said report, goods were asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANDING ORDER NO.02/CUS/2013 Sub : Assessment of HMS Scrap Mixed with Re Rollable/ Serviceable Material. In suppression of Standing Order No.2-Cus/2002 Dated 21.03.2002 issued in F. No.VII-48(106) T/VAL/Steel Pipes/2001, following practice is to be adopted with immediate effect for assessment of imported ferrous scrap. (i) An importer of ferrous scrap must declare, in the relevant Bill of Entry, the grade of scrap imported in terms of internationally accepted ISRI Code for ferrous scrap. (ii) The classification of ferrous scrap under various ISRI code shall be guided by ISRI Rules of "General Information" applicable to the ferrous scrap, subject to the condition that : (a) The "negligible amount" of metallic material referred to in Rule (b) of General Information shall be deemed to be upto 2% of the total weight of the imported consignment, and (b) a minor extent" of variation in size limitation applicable to any ISRI Code Grade, also referred to in Rule (b), shall mean a variation to 10%." As per the said instructions, the importer is required to be declared the grade of scrap imported in terms of internationally accepted ISRI Code. Admittedly, the grade of scrap has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondary defective input material for further commercial productions. The same has been recognised by BIS vide their letter dated 28.10.2016. The report is extracted as under:- The Revenue, on the other hand, has relied on the letter issued by NISST dated 24.03.2017 to say that, in case somebody ventures into waste utilization other than re-melting, we cannot comment on those. In fact, the NISST has given a categorical finding that such type of scrap material cannot be utilised further manufacturing in any manufacturing process but the Revenue has relied that this waste may be utilised other than re-melting, therefore, they ordered for mutilation of the same. There may be chances that after mutilation also some pieces of scrap can be re-used or used other than re-melting. It is not the tenor of the Standing Instruction dated 13.05.2013. It is required to be seen with a broader perspective whether the goods can be re-used or not. As the Chartered Engineer Shri Varun Chandok with the Metallurgical Engineer has given a clear-cut finding, after considering the Chapter notes of Section XV 8(a)that the goods in question is a scrap only. With regard to the marketability, the same is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported Heavy Melting Scrap (HMS), which on verification was found to be contain M.S. Sheet, cutting, strips/slit (Cr) mix coated/plated width less than 600 mm, M.S. Sheet, cutting, strips/slit width more than 600 mm but of serviceable nature. It is pertinent to mention that the appellant in his statement dated 10.2.2017 recorded under Section 108 of the Customs Act, 1962 has admitted that certain CR strips/sheet/slit covered under Bill of Entry No.8155288 dated 11.1.2017 having width more than 600 mm can be used as such other than melting scrap. The impugned goods were examined by empanelled Chartered Engineers, who certified that only 50% approximately was melting scrap. Summaries of these reports are tabulated below: (i) For B/E 8155288 dill. 1.2017, 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 Rajesh John 02.02.17 i) CR sheets/strips/slits width 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) 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined by the importer after passing of the order of the Commissioner (Appeals), merely mentions that the material cannot be used as such for any standard manufacturing and fabrication process. However, clarification dated 22.6.2017 has not been examined by the adjudicating authority and the first appellate authority as it was obtained by importer subsequently. The NISST has not tested the goods for carbon content of the impugned material. 131 I find that the goods were also tested for carbon content as per the directions of the adjudicating authority in his order dt.12.4.2017. On testing of the goods at the Research and Development in Bicycles and Sewing Machines (RDBSM) laboratory, Ludhiana, the material in question has been found to be low carbon steel, which attracts mandatory BIS certification. However, the appellant have not produced any evidence before this Tribunal or Commissioner (Appeals) that supplier of goods was granted such certification under FMCS Scheme or the imported goods were as per Indian Standard of Certification IS513 14. I also find that the appellant had tried to mislead the Tribunal by wrongly submitting before the Tribunal that the Research and Developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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