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2023 (4) TMI 356 - AT - CustomsClassification of imported goods - second and defective Plates having width of less than 600 mm as well as more than 600 mm and Second and Defective Pipes - classifiable under CTH 7204 or under CTH 7206? - Benefit of concessional rate of duty under Notification No. 21/2002-Cus., dated 1-3-2002 (Sl. No. 190B of the Table) as amended - Valuation of goods - enhancement of declared value - quality of the imported goods - HELD THAT:- 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 be same but externally the goods may be different in quality and use. Therefore without accepting, even if the chemical 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 than 600 mm) and 7206 (Pipes). However between the different competing chapter headings 7204 is more appropriate because the goods are more in the nature of scrap and not in the nature of Plates and Pipes. Further the disputed goods are not suitable for use as Plates and Pipes. Therefore order of both the authority classifying the disputed goods under CTH 7211, 7208 and 7206 legally not correct. Increase in value made is mis-declaration in description of goods - Rejection of transaction value - enhancement of declared value - HELD 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, quantity and country of origin with the imports under consideration. For any enhancement in assessment value, the transaction value has to be first rejected based on legal permissible ground as indicated in the valuation Rules. In the present matter, Revenue has not advanced any such evidence to support their case inasmuch as, no evidence of rejection of transaction value was produced by the department. Quality of the imported goods - HELD THAT:- There is clear understanding between the supplier and the appellant importer that the goods in question is ‘scrap’ and therefore the quality of goods is Scrap and on that basis the supplier agreed to sell the goods at agreed price. As against this fact, the revenue could not adduce any evidence to reject this fact. In this fact on the quality of the goods, obviously the price cannot be the same of the prime grade material. Hence the price negotiated and finalised as sale price between the supplier and the appellant importer and declaration of the same cannot be disputed. Thus, the impugned orders cannot be sustained - appeal allowed.
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