TMI Blog2014 (2) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... SN notes makes a mention that waste and scrap which can be rolled into other products without melting to recover metal was excluded from Heading 72.04. Whether the value loaded for assessment is sustainable because duty other than basic customs duty was payable even when exemption under notification 21/-2002-Cus (S. No. 200) is extended - Held that:- The only reason for increase in value made is mis-declaration in description of goods. No evidence of additional remittance of money is brought out. Also there is an issue scrap is not a type of goods which can be easily compared. The appellants have also taken objection that the time of import of the comparable goods taken was also different and hence the value adopted for assessment has no legal basis. Revenue argues that the appellants accepted the increased value before clearance and hence they cannot challenge it now. No record showing acceptance of increase in value is brought on record - Following decision of CC Vs. D. M. International [2008 (6) TMI 525 - CESTAT, NEW DELHI] - – Decide in favor of assesse. - Appeal Nos. C/218 to 225/2010 & C/231/2010 - FINAL ORDER No.40093-40101/2014 - Dated:- 11-2-2014 - Shri P.K. Das and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and that the transaction value should be accepted without any loading. 3. The Counsel for appellants submit that the dispute regarding classification involved in this case has been decided by the Tribunal in favor of the appellant in the case of Hinduja Foundries Ltd reported at 2013 (288) E.L.T. 571 (Tri. -Chennai) and pleaded that the appeals may be allowed following the said decision. He basically relied on the arguments recorded by Tribunal in favour of the importer in that case. 4. Since the matter appeared to be covered by the decision of the Tribunal in the case of Hinduja Foundries both sides were heard briefly and were asked to give written submissions. Both sides have given written submissions and the appeals are being decided on the basis of submissions during hearing and also in written submissions apart from the case records. 5. In the matter of valuation the Ld. Advocate for appellants submits that the transaction value was rejected for the ground that the description of goods was mis-declared. Once it is accepted that these goods are Melting Scrap of Steel there is no mis-declaration involved and hence the ground for rejection of transaction value becomes u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both relying on,- (i) the Section Notes, Chapter note and Interpretative Rules of the Customs Tariff; and (ii) HSN Notes. 11. The first type of arguments are as under:- As per Section Note 8 of Customs Tariff, Waste and Scrap has following meaning:- (a) Metal Waste arising 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. 12. According to Ld. A. R. the first category of inclusion refers to waste and scrap from the manufacturer or mechanical working of iron or steel (example crop and filings and turnings). The second category refers to Waste and Scrap arising from Articles of Iron or Steel. Such articles to be called waste and scrap , have to,- (i) be definitely not usable because of reasons breakage, wear etc. ii) be adapted for the use primarily of melting by undergoing processes mentioned therein. (These are defective arguments because the words as such appearing in the note are omitted for building the argument. Further the note does not say that the waste and scrap has to undergo any specific process to make it suitable for melting. The fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rails of the type normally used for railway or tramway track irrespective of their intended use (overhead transporters, mobile cranes, etc.). It does not, however, cover rails not of the railway or tramway type (e.g. sliding door rails and lift rails). 15. It is argued that as per HSN Notes for 7204, waste and scrap classified thereunder is of miscellaneous nature. Hence used rails of assorted sizes cannot fall under this heading. (This again is not a correct argument. The note implies that different types of waste fall under the heading. This note does not imply that every consignment of waste should have miscellaneous items in it). 16. Further to the submissions on HSN 7204, it is submitted that HSN 7302 specifically covers goods described as Rails and the heading covers all lengths of such rails, accordingly, goods in question are classifiable under 7302 in terms of The General Rules for the Interpretation of Import Tariff. 17. He argues that two categories of goods are excluded from heading HSN 7204 viz., (i) Articles which can be reused without repair/renovation for former or can be adapted for other purposes. Articles, being not yet adapted for the said purpose, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld in L.M.L. Ltd. case (72.16 is equivalent to 72.10 - L.M.L. Ltd. case) and not under Headings 72.08, 72.09 and 72.11, as had been contended by the Revenue. The assessee has accepted the findings recorded by the Tribunal and has not come up in appeal. 15. We agree with the view taken by the Tribunal. HSN Explanatory Notes in Chapter 72 provide that waste and scrap is generally used for the recovery of metal by re-melting or for the manufacture of chemicals. It further provides that Heading 72.04 excludes articles which, with or without repair or renovation, can be reused for their former purposes or can be adapted for other uses; it also excludes articles which can be refashioned into other goods without first being recovered as metal. 16. It is apparent from the reading of HSN Explanatory Notes that if the goods can be reused without first being melted, are excluded from the purview of Heading 72.04. Accordingly, in the given facts of that case, Hon Court went on to hold that They would also not fall under Tariff Entries 72.08, 72.09 and 72.11 as the offcuts are of different shapes and sizes and would not fall under these tariff items. Thus, the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... known as re-rollable and industrial scrap which can be used for purposes other than melting has been under dispute between trade and CBEC since 1983 as recorded in para 16 of the order in the case of Hinduja Foundries (Supra). During the period of import under these appeals, if the goods were classifiable under heading 72.04 the goods were freely importable. If the goods were classifiable under 73.02 the goods were restricted for import. It is to be noted that this restriction comes on account of the fact that the goods were old and used and the general rule for allowing import was that any goods, other than capital goods, which were old and used were restricted for import. For scrap which is in the nature of raw material relaxation from import was given but such policy was incorporated in chapter 72 and not in chapter 73. It is a not a case where there was a policy backed by statute to restrict import of re-rollable scrap as against policy backed by statute for allowing free import of melting scrap. While deciding the case of Hinduja Foundries Ltd (Supra) in para 12 of the order notes that in the meeting of EXIM facilitation Committee held on 16-02-2012 by the DGFT it was clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from 72.04 as per HSN notes but still decided that the classification should be under 72.04 for the following main reasons :- (i) The Tribunal in various decisions involving import of re-rollable scrap has upheld classification under 72.04 as may be seen in the following decisions:- (a) Sujana Steels and Pipes Ltd Vs. CCE-2000 (115) ELT 539 (Tri) (b) CCE Vs. Rimjhim Isapat Ltd -2005 (183) ELT 283) (c) Shiva Ispat Udyog Vs. CC 2010 (254) ELt 297 (Tri-Kol) (ii) There is no change in Tariff descriptions or description in notification which would warrant a change in practice (iii) There had been frequent change of opinion among the authorities and the authorities about classification of the goods whether under 72.04 or 73.02 (iv) Between the two different competing headings 72.04 and 73.02 , 72.04 is more appropriate because the goods are more in the nature of scrap and not in the nature of rails 30. The position is that the goods were cut used rails as per the submission of the appellants as seen recorded in the impugned orders. As per examination report the goods were used rails of assorted sizes . From this it is evident that the goods were not suitable for use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iron and steel scrap. Entry 201 which specifically covered cut and used rails also got omitted . 32. Further in view of competing arguments and in a matter were the CBEC and DGFT has been changing its stand the Tribunal adopted for maintaining consistency with past decisions. 33. The classification of the goods cannot be decided with reference to the type of importer though rate of duty can be with reference to end-use if suitable condition is prescribed. Since end-use conditions are not prescribed we do not see any reason to take any different decision for the present importers who are traders as against Hinduja Foundries Ltd who was an actual user for melting of the goods. 34. So we consider it proper not to deviate from the earlier decisions of the Tribunal in the matter. So the issue of rate of duty for levying basic customs duty is also answered in favour of the appellants. 35. Now there is a question to be decided whether the value loaded for assessment is sustainable because duty other than basic customs duty was payable even when exemption under notification 21/-2002-Cus (S. No. 200) is extended. The only reason for increase in value made is mis-declaration in descr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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