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TMI Blog2019 (1) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... ated on account of such segregation, which cannot be used for manufacturing brass articles do not retain the character of the item which was imported, viz., brass scrap. Therefore, the question of charging customs duty on such goods by considering them to be articles imported “as such” would not arise. CBEC Circular No.62/2001-Cus dated 12.11.2001 - Held that:- The Circular relates to valuation of plastic waste and scrap - The identity of the goods imported and the goods cleared into DTA is the same, namely plastic waste. Evidently, therefore, the plastic waste cleared into DTA is clearance of plastic waste “as such”. Whereas in the facts of the present case, what is imported is brass scrap and what is cleared into DTA is waste other than brass and foundry items, the identity whereof is different from the goods imported. The said circular would, therefore, have no applicability to the facts of this case. Circular No.1029/2016-CX dated 10.05.2016 - Held that:- The Circular clarifies regarding segregation of impurities, viz., iron, steel, rubber, plastic, dust etc. from honey grade plastic scrap - while the above circular clarifies whether segregated foreign materials from imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to as the Tribunal ) in Order No.A/11068 11093/2018, by proposing the following common questions stated to be substantial questions of law: [ a] Whether the Hon ble CESTAT is justified in attributing the conclusion that the CBEC Circular No.62/2001-Cus dated 12.11.2001 is contrary to the principle of law laid down in relation to the meaning of Manufacture held by judiciary in a series of cases? [ b] Whether the Hon ble CESTAT is correct and justified while holding that the CBEC Circular No.1029/17/2016-CX dated 10.05.2016 is relevant though the same has been issued in respect to Cenvat Credit Rules, 2004, especially when the facts and circumstances of the present case are identical and properly clarified and covered under the Circular No.62/2001-Cus dated 12.11.2001, which has been issued in respect to EOU/SEZ Units? [ c]Whether the Hon ble CESTAT is correct in allowing the clearance of foundry scrap beyond the ratio/norms of scrap laid down by the Norms Committee and in contravention to the provisions of Notification No.52/2003-Cus dated 31.03.2003? Since all the appeals arise of a common order and the facts are also similar, the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scope of clause (3) of Notification No.50/2003-Cus dated 31.03.2003, as amended and, accordingly, no further customs duty would be recoverable on the excess quantity of scrap. 2.2 Both, the assessees as well as the revenue went in appeal before the Tribunal. According to the revenue, since the activity of segregation of imported scrap does not result into manufacture, in view of CBEC Circular No.62 of 2001 dated 12.11.2001, the customs duty foregone is required to be paid on that quantity of non-foundry scrap, cleared in DTA applying, CIF value of the scrap at the time of its import. 2.3 The assessee challenged the orders passed by the Commissioner (Appeals) contending that the input output ratio fixed by the Norms Committee cannot be made applicable in view of clause (3) of Notification No.50/2003-Cus dated 31.03.2003, since the scrap had been cleared on payment of appropriate excise duty in DTA after obtaining necessary permission from the Development Commissioner. 2.4 The Tribunal, by the impugned order, found that the question as to whether the activity of segregation of imported mixed brass scrap into foundry and non-foundry grade amounts to manufacture is more or l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, any waste in excess thereof is required to be cleared by payment of customs duty on import of such articles as such . 4. In the backdrop of the facts and contentions noted hereinabove, two questions arise for consideration: (i) Whether clearance of imported scrap after segregation can be said to be clearance as such ? and (ii) Whether clearance of such scrap upon payment of excise duty would fall within the ambit of paragraph 3 of Notification No.52/2003-Cus dated 31.03.2003? 5. As can be seen from the impugned order, the Tribunal has held that after segregation of the mixed imported scrap, the segregated scrap, if cleared, cannot be considered as clearance of inputs as such . The facts reveal that what was imported was brass scrap. The brass scrap was segregated into brass and foundry and non foundry scrap. The brass and foundry items came to be used for the manufacture of brass articles for which purpose the scrap had been imported. The non foundry scrap obtained as a result of such segregation came to be cleared in DTA. In the opinion of this court, such non foundry scrap can by no means be said to be articles imported as such inasmuch as it was bras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insofar is imported plastic waste is concerned, part of the same is used for the manufacture of plastic agglomerates and the remaining plastic waste is cleared in the DTA. Therefore, the identity of the goods imported and the goods cleared into DTA is the same, namely plastic waste. Evidently, therefore, the plastic waste cleared into DTA is clearance of plastic waste as such . Whereas in the facts of the present case, what is imported is brass scrap and what is cleared into DTA is waste other than brass and foundry items, the identity whereof is different from the goods imported. The said circular would, therefore, have no applicability to the facts of this case. 9. The appellant has also challenged the impugned order passed by the Tribunal on the ground that the Tribunal has wrongly placed reliance upon the Circular No.1029/2016-CX dated 10.05.2016. Insofar as the said Circular is concerned, it clarifies regarding segregation of impurities, viz., iron, steel, rubber, plastic, dust etc. from honey grade plastic scrap. The issue was when the category of waste, viz., foreign material segregated initially and not fed into the furnace is cleared by the brass manufacturers can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Circular No.1029/2016-/CX dated 10th May, 2016. 11. That brings us to the second question, as to whether clearance of such scrap upon payment of excise duty would fall within the ambit of paragraph 3 of Notification No.52/2003- Cus dated 31.03.2003? On behalf of the appellant it has been contended that the clearance of foundry scrap beyond the ratio/norms of scrap laid down by the Norms Committee is in contravention of the provisions of Notification No.52/2003-Cus dated 31.03.2003. In this regard, reference may be made to the provisions of the said notification. Clause (3) of the said notification to the extent the same is relevant for the present purpose provides that notwithstanding anything contained in that notification, the exemption therewith shall also apply to goods which on importation into India or procurement, are used for the purpose of manufacture of finished goods or services and such finished goods and services, (including byproducts, rejects, waste and scrap arising in the course of production, manufacture, processing or packaging of such goods) even if not exported, are allowed to be sold in Domestic Tariff Area in accordance with the Export and Import Policy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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