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TMI Blog2023 (4) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... cal composition is same of both quality of goods, the scrap material cannot be construed as prime material or seconds materials and on this basis benefit of notification cannot be denied. In the impugned matter both the adjudicating authority nowhere disputed the claim of Appellant that the goods were provisionally released on execution of bond and they have been transferred to their sister concern where they have not used the disputed goods as such but have been used for further manufacture of CTD bars etc. by the process of heat melting and slitting etc. The end use of the disputed goods was melting scrap or re-rollable scrap . Hence on the basis of end use of disputed goods also the goods are classifiable under chapter hearing 7204 and eligible for benefit of notification. The Hon ble Supreme Court in the case of TATA IRON STEEL CO. LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [ 1994 (12) TMI 73 - SUPREME COURT ] held that the old and used rails, billets, plates, axles, channels etc, are to be treated as scrap. In the present case revenue classified the disputed goods under chapter heading 7211 (Plates having width of less than 600mm), 7208 (Plates having width more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision as per the order dated 14.11.2022 passed by the Hon ble Supreme Court of India in Civil Appeal No (S). 3237-3238 of 2019. 2. Both the present appeals are filed by the appellant against the Order-In-Original No. KDL/COMMR/23/10-11 dated 22.02.2011 passed by the Commissioner of Customs, Kandla; and Order-In-Appeal No. KDL-CUSTM-000-APP-033-17-18 dated 10.08.2017 passed by the Commissioner of Customs (Appeals), Ahmedabad. Since the issue is identical in both the appeals, they are disposed of by this common order. Appeal No. C/176/2011 2.1 The brief facts of the case are that Appellants have imported four consignments vide Bills of Entry No. 259764, 259765, 259766 and 259767, all dated 01.10.2008 by declaring the goods as re-rollable plate scrap of CTH 72044900. They also imported another consignment declaring the goods as Re-rollable plate scrap pipes in respect of Bill of entry No. 259768 dated 01.10.2008. On examination of the imported cargo, it was found that the goods were mis-declared and the same were second and defective plates/ pipes/ waste. Plates of width more than 600 mm are classifiable under CTH 7208 and Plates of width less than 600 mm are classifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff Act by claiming the benefit of Basic Customs duty under Sr. No. 190B of Notification No. 21/2002-Cus dated 01.03.2002 as amended. During the course of examination in respect of bill of entry No. 262730 dated 24.10.2008 it appeared that the said imported cargo contained second and defective pipe, re-rolled HMS materials scrap and second and defective plates of width less than 600 mm. In respect of Bill of Entry No. 272731 dated 24.10.2008 it was found to be second and defective steel plate of width both less and more than 600 mm. The sample from the imported goods were drawn and got tested from the National Test House, Ghaziabad, wherein it was reported that the sample meet the requirement of mild steel and it was confirmed that sample was mild steel. It therefore appears that the Appellant mis-declared the subject goods in respect of value, classification, description and duty structure in the said Bill of entry. Accordingly SCN dated 17.06.2009 was issued in respect of which Order-In-Original No. KDL/ADC/PMR.49/2016-17 dated 15.11.2016 was passed wherein second and defective MS Plate having width more than 600 mm and less than 600 mm were classified under CTH 7208 and 7211 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. of defective steel plate of varying length, thickness and width. But the department has not produced any material to substantiate these allegations. The only material relied upon by the department is lab report from National Test House. The report merely indicate that the sample cut in equal sizes are mild steel as per Indian Standard, IS: 2062-2006. The lab report relied by the department has no consequence on the claim by the appellant that the import of scrap. Scrap or seconds/ defective may have the same chemical composition and hence this lab report merely reiterates that the imported goods are chemically mild steel. 3.3 He argued that the best test differentiation between scrap and second/defective is the end use. Seconds/ Defectives can be used for the same purposes for which it was manufactured albeit at as lower efficiency than non-defectives. Scrap can never be used as such by very definition. The goods herein, were on provisional release transferred to their sister concern where they have not been used as such, but have been used for further manufacture of CTD bars etc., in this case, by the process of heat melting and slitting etc. 3.4 He further submits that R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported by any expert. Therefore, there cannot be any reason to mis-declare the consignment and violate the provisions of Section 111(m). There is no reason also to establish any under valuation as scrap consignments cannot be compared among each other. 3.7 He also submits that the show cause notice does not bring out any material of the importer having paid any amounts in excess of the valuation declared and transacted by them. Since there is no mis-declaration and there is no material as to how and on what basis the value was proposed to be enhanced, there is no reason to reject the transaction value. There is no evidence or allegation of any additional payment over and above the transaction value. The transaction value has been rejected without having any reason. It is also well known commercial reality that scrap material contents cannot be uniform they are sold in Lots of different weight. As it has been found that such scrap of plates, pipes, smaller cut pieces have been supplied have the same valuation. 3.8 He further submits that there can be no charge of violation of Section 111(m) for reasons of undervaluation and confiscation and penal liabilities thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter heading 7204 and 72044900 provide as under : - 7204 - Ferrous waste and Scrap; remelting scrap Ingots of Iron or Steel 720410000 Waste and scrap of cast iron - Waste and scrap of alloys steel: 720421 - - Of Stainless Steel : - Other waste and scrap : 72044100 -- Turning, shavings, chips, milling waste, saw dust, fillings, trimming and stamping, whether or not in bundles 72044900 Other 5.2 Appellant had classified the goods under Customs Tariff heading 72044900 and claimed exemption under Notification 21/2002-Cus. at S. No. 190B. This exemption was available to All goods other than seconds and defectives falling under Customs Tariff Headings 7204. However the notification nowhere defines the term second and defective. On examination of the goods, the customs officers felt that the goods were secondary or defective because they were contained Second and Defective Plates having width of less than 600 mm as well as more than 600 mm and second and defective pipes. However the documents submitted by the appellant during the import of goods nowhere mentions that the goods are seconds and defective plates and pipes. In our view second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the absence of any evidence are serviceable, are to be treated as melting scrap.The Tribunal in various decisions involving import of re-rollablescrap has upheld classification under 72.04 as may be seen in the following decisions :- SUJANA STEELS AND PIPES LTD. V. CCE - 2000 (115) E.L.T. 539 (TRI.) CCE V. RIMJHIMISPAT LTD. - 2005 (183) E.L.T. 283 SHIVA ISPATUDYOG V. CC - 2010 (254) E.L.T. 297 (TRI.-KOL.) 5.4 The imported goods are correctly classifiable under Heading 7204 of the Customs Tariff Act and are eligible for exemption under Notification No. 21/2002-Cus. In the present matter the entire consignment was re-rollable and melting scrap only scrap bought as stock lot is bound to contain articles in different shapes and forms including some serviceable material which are considered as scrap in the exporting country, it does not mean that the entire lot will be considered not as scrap or segregated within serviceable and scrap. In the present matter department nowhere disputed that the consignment imported has not indeed been used in the manufacturer of rolled products. In these circumstances, it cannot be said that the appellant has mis-declared the goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red transaction value, paid to the overseas supplier. Further, there is no evidence that the appellant and overseas supplier are related parties or that the invoice value was not the transaction value. The Department has failed to show any contemporaneous evidence of higher price, and thus the transaction value cannot be rejected, as held by the Hon ble Apex Court in Commissioner Central Excise v. Sanjivani Non- Ferrous Trading Pvt. Ltd. - (2019) 2 SCC 378 = 2019 (365) E.L.T. 3 (S.C.) and Commissioner of Customs v. South India Television Pvt. Ltd. - (2007) 6 SCC 373 = 2007 (214) E.L.T. 3 (S.C.). Further, in the present case, particularly, when the invoice price of the appellant was not disputed on the basis of any evidence of wrong declaration of the value, the enhancement in the present case is illegal and incorrect. We find that there is no dispute that the customs has power to reject the transaction value and enhance the assessable value in terms of Customs Valuation Rules. However, such rejection of transaction value and enhancement of assessable value has to be on the basis of some evidence on record. Contemporaneous imports have to be considered in reference to quality, quant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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