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TMI Blog2024 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that the importer-Appellants are disposing these cargo as such. Taking into consideration of all the facts obtaining in all these appeals and Examination Reports as the Appellants being the manufacturers who regularly import scrap both for melting and re-rolling, we are of the view that the imported cargo cannot be treated as seconds and defectives and so are eligible for the benefit of concessional rate of duty in terms of Notification No. 12/2012-Cus. dated 17.03.2012 at Sl.No. 330. - HON BLE MR. P. DINESHA, MEMBER (JUDICIAL) And HON BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) For the Appellants : Mr. M. Karthikeyan, Advocate For the Respondent: Ms. O. M. Reena, Authorised Representative ORDER Per Mr. VASA SESHAGIRI RAO M/s. DSRM Steels Pvt. Ltd., Dindigul who is the Appellant (A1) in the Appeal No. C/40545/2015 and M/s. Amman Steel Corporation, Trichy who is the Appellant (A2) in Appeal No. C/40547/2015 have filed these appeals assailing the Order-in-Appeal Nos. 154 155/2014 dated 30.12.2014 passed by the Commissioner of Customs and Central Excise (Appeals), Trichy. Both these appeals involve an identical issue of eligibility for the concessional rate of duty under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill consists of a number of rollers that compress and lengthen the rods and finish them into required shape; ➢ The length of the cargo varies from 4 to 10 feet and the width/thickness varies from 10 to 30mm. ➢ The cargo is in the form of scrap only and not arisen from manufacture or mechanical working of metals. They appear to be the cur pieces / unwanted portion of standard length. From the above, it is evident that the imported cargo is re-rollable iron scrap in the form of rusted iron rods, which is in the form of scrap only and not arisen from manufacture or mechanical working of metals. The importers are Central Excise registered manufacturers and imported material will be used by them as raw materials. The cargo cannot be re-rolled, without the process of melting and it can be re-rolled by allowing it by passing through the roller Mill. It was also mentioned therein that the cargo was in the form of cut pieces and unwanted portion of standard length and being rejected can be used as such. However, the benefit of the Notification as cited supra has been denied to the importers on the ground that imported goods are seconds and defectives which are excluded from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 08.10.2014 (A2) addressed to the Assistant Commissioner of Customs, Tuticorin. It appears that the Appellants were not given any notice, nor the Department have vacated the protests. 2.3 Being aggrieved, the Appellants (A1 A2) filed these appeals before the Commissioner of Customs and Central Excise (Appeals), who vide impugned Orders-in-Appeal No. 155/2014 and No. 154/2014 both dated 30.12.2014 held that the imported goods were seconds and defectives as they were cut pieces, unwanted portions of standard length and the said Notification specifically excludes seconds and defectives . The Lower Appellate Authority, thus, upheld the assessment in the Bills of Entry No. 7043324 dated 13.10.2014 and No. 6903777 dated 27.09.2014 without extending concessional duty under Notification No. 12/2012-Cus. dated 17.03.2012. 2.4 Aggrieved by both the impugned orders dated 30.12.2014, the Appellants have filed the above appeals before this forum on various grounds. i. Seconds and defectives are the products which arise during the course of manufacture which do not conform to the prescribed standards whereas scrap is a waste which arises due to dismantling of machineries that have outlived thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Entry and there is no reason to interfere with the assessment orders 5. We have heard both sides and considered the submissions and evidences available on the record. 6. The only issue that arises for determination in these appeals is whether the imported cargo is eligible for the benefit of the Notification No. 12/2012-Cus. dated 17.03.2012 or not? 7. From the facts, it is clear that there is no dispute as to the classification or valuation of the imported cargo which was declared as Re-rollable Scrap . 8. Both the appellants are manufacturers and are registered with the Central Excise Authorities engaged in the manufacture of TMT bars and other iron products and the imported cargo is used as raw material. A perusal of the examination reports in both the cases indicate that the imported cargo cannot be re-rolled as such without undergoing the process of heating / and or melting. The cargo is in the form of rejected and rusted rods. There is a categorical finding that the cargo is in the form of scrap which has not arisen from manufacture or mechanical working of metals. They are in the nature of cut pieces / unwanted portion of standard length, and the length of the cargo varie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the import of goods nowhere mentions that the goods are seconds and defective plates and pipes. In our view second and defectives means the goods have prime material but have some defect and can be used as a prime material. However in the present matter there is no dispute on the facts that the disputed goods were used as re-rollable scrap/ melting scrap. Further we also noticed that the test report issued by the National Test House, Ghaziabad has determined the composition of the impugned goods which confirms that it is material of Mild Steel. The said test report nowhere confirms that the impugned goods are second and defectives. The revenue has not considered the disputed goods as scrap on the basis test report. The test report does not specify that the subject goods are scrap. However on the basis of test report it cannot be decided that the disputed goods were not scrap. Scrap whether used or cut pieces by virtues of its physical properties will contain composition of its prime material. Merely by using or cutting the material will not alter its chemical composition. In such case there is no surprise that the chemical parameters of prime material and scrap grade material may ..... 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