TMI Blog2011 (3) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... bond, and only 25% i.e. 122.42 MT of “alloy steel” are available for confiscation, the said 122.42 MT of alloy steel is confiscated under Section 111(m) of the Customs Act, 1962 with the option to redeem the same on payment of a fine of Rs. 20 Lakhs (Rupees Twenty Lakhs only). - S/49-225/Cus/Mum-I/2010 NCH - 90/MCH/ADC/GR-IV/2011 - Dated:- 8-3-2011 - Shri P.M. Saleem, J. REPRESENTED BY : S/Shri Girish Jain, Director (Company), Haresh Menon, CHA and Sujay N.Kantwala, Advocate, for the Assessee. S/Shri Amol Ket Asst. Commn, Gr.-IV and S.S. Upadhyay, A.O. Gr-IV, for the Department. [Order]. M/s. Prabhat Steel Traders Pvt. Ltd., Navi Mumbai, have filed this appeal against the above mentioned Order-in-Original passed by the Addl. Commissioner of Customs (Imp.), Gr. IV, NCH, Mumbai. The Appellants had filed two Bills of Entry No. 890392 and 890395 both dtd. 15-4-2009 for clearance of 503.41 MT arid 523.05 MT respectively of goods declared as Non-Alloy Steel Slabs - Second/Defectives and claimed classification under Heading 7207 19 90 of the Customs Tariff. 2. On first check basis examination on 29-4-2009, the goods seemed to be not Slabs. The Group therefore o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication order : lot inspected and examined 10% after selection, checked the description and marked width and thickness . The goods under import were declared as non-alloy steel Slabs secondary/defective classified 7207 19 90. The goods falling under CTH 7207 should have Carbon content less than 0.25%. Since the goods are declared as secondary/defective so Mill Test Report was not attached with the documents. Slab is semi-finished goods having thickness 180 mm or more. On visual inspection the goods under import seems to be the HR Plate classifiable under CTH 7208 which is restricted and cleared under valid import licence. 10. It is observed that two representative samples drawn from available and remaining 25% of the goods were sent for test to the National Metallurgical Laboratory, Chennai. Test report No. NML/MC/04/MI/001/2009-10 (Report No. :001) dtd. 29-5-2009 indicate, inter alia, : Only part of the consignment was available for examination. Dimensions of a few representative plates/slabs were measured. The measurements are only indicative excluding the curved ends. All dimensions are in mm (length x width x thickness). 1. 6310 x 1025 x 40 2. 5850 x 1590 x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment with thickness in the range of 80 mm . Accordingly, the Shed Appraiser/Asst. Commissioner (Docks) reported the percentage of Slab content as 4.59% and remaining 95.41% were considered as Plates. 13. Since only part of the consignment from both the Bills of Entry were available for testing, the 50% of 95.41% of the goods from each Bills of Entry were considered as alloy Steel and remaining 50% of 95.41% of the goods were considered as non-alloy Steel . The balance 4.59% in each Bill of Entry were considered as Slabs . Thus, it was alleged that 489.67 MT of the goods were non-alloy Steel Plates secondary/defective classifiable under Heading 7208, and the balance 489.6745 MT of the goods were alloy Steel Plates secondary/defective classifiable under CTH 7225, together for both Bills of Entry. 14. Misdeclaration of description of the goods, and consequently value, and violation of licensing provisions were alleged in the Show Cause Notice. 15. It is observed that the Adjudicating Authority in the impugned order has held that the restriction for import is applicable only to hot rolled coils in accordance with Notification No. 63/[RE-2008]/2008-2009 dtd. 21-11-2008. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab casters manufacture Slabs of 35 mm thickness. Thus, contentions of the Appellants were that Slabs are being manufactured in India and abroad much below the thickness of 80 mm. 20. It is observed that the imported pieces are of various dimension and many pieces have wide variation in thickness along the length, have irregular ends have curved ends, have surface defects which are significant, are irregular in cutting, and some pieces are of thickness of 40 mm, some 70 mm, and some 80 mm. HSN explanatory notes indicate sheets and Plates have strict tolerance as to thickness and surface defects. They are rolled longitudinally and transversely and are normally sheared or plain cut to have precise and firm and regular ends. Slabs are semi-finished products whereas Plates are finished products. Variation in thickness in the same piece is an absolute no in Plates and a ready reckoner whether the pieces are Plates or Slabs. Variation in thickness would necessitate further rolling. Normally there should have been no difficulty in categorizing the impugned goods as Slabs than Plates. However, it appears that the impugned goods seemed to be too slim to categorize as Slabs. Generally, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases are of second/defectives on stock lot from established supplier in Belgium at arms length and payments made through banking channels. Secondly, basing the value of second/defectives on the price of Prime material is absolutely illegal. Thirdly, the discount of 25% granted by the Adjudicating Authority is too little considering that the goods are second/defectives. The Supreme Court has even accepted 70% trade discount from the List Price for determination of assessable value of prime material itself. They argued that the discounts for second/defective should be much higher than even 70%. They also submitted that Commissioner of Customs (Appeals), JNCH, Mumbai-II, has granted a discount of 50% for secondary/defective goods in a recent Order-in-Appeal No. 337 dtd. 16-11-2010. The Appellants also submitted that prime quality mild Steel Plates were assessed at JNPT, Mumbai, at US $ 400 vide B/E No. 925775 dtd. 3-6-2009, at US $ 477.50 vide B/E No. 943890 dtd. 16-6-2009, and at US $ 540 PMT vide B/E No. 774351 dtd. 6-2-2009. 23. It is observed that it is legally well settled that transaction value cannot be rejected unless for valid reasons. In the instant case such conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel Plates as per LME Bulletin at Euro 565. Discounting the same by 50%, the price would be Euro 282.5 PMT for second/defectives. This price is observed to be lower than the transaction value declared by the Appellants. Hence, on this count also, the transaction value appears to be correct. 26. Another issue to be decided in this matter is the Alloy V. Non-alloy issue. The chemical analysis test report of National Metallurgical Limited, Chennai, was based on the two samples drawn from the 25% of the impugned goods which were remaining and available to them. Of the two samples drawn, one sample proved to be non alloy Steel and other proved to be alloy Steel. By extrapolating the result to the entire import consignment, the Adjudicating Authority has held that 489.6745 MT of the impugned goods to be alloy Steel Plates. Therefore the goods appeared to be misdeclared on this ground. However, the Adjudicating Authority has held that they are freely importable. He has also taken the value of prime alloy/non-alloy Steel Plates as the same. Therefore it appears that there is no significant benefit per se to the importer by such misdeclaration. The Appellant s contentions are that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. The said judgement was upheld by the Hon ble High Court vide Order dtd. 13-3-2008 in Revenue Appeal No. 100 of 2007. In Davinder Singh s case, 2006 (193) E.L.T. 359, the Hon ble Tribunal held that it was a clear case of ITC violation and in respect of goods valued at Rs. 9,36,395/- the redemption fine was reduced to Rs. 25,000/- inter alia taking into consideration detention/demurrage charges already suffered by the Appellant. In the case of Pradip M. Reshamwala, reported in 2008 (221) E.L.T. 573 (T), the Hon ble Tribunal vide Order dtd. 29-10-2007, in a case of failure to comply with Import Licensing requirement, in respect of a car valued at Rs. 22,09,811/- was pleased to reduce the redemption fine to Rs. 40,000/- and penalty to Rs. 10,000/-. 29. Thus, it is observed that the evidences relied upon by Revenue is not convincing to warrant confiscation of the goods as at para 21 above. At best, only the alloy material mentioned at Para 26 above could be technically liable for confiscation, though the evidences in favour of the same is very tenuous. It is also seen that the transaction value has to be accepted as at paras 22-25 above. As regards redemption fine and penalty, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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