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Commissioner of Customs, Chennai Versus Kamatchi Sponge and Power Corporation Ltd.

2016 (3) TMI 220 - CESTAT CHENNAI

Classification - Whether the goods imported are Heavy Melting Steel Scrap or Secondary Welded Pipes - Held that: there is no misdeclaration by appellant as seen from the purchase order/sales contract, sales confirmation report and pre-shipment inspection certificate, wherein appellants have placed orders for supply of 1000 MTs of HMSS, and imported the said goods and cleared in terms of purchase order. The test report relied by Revenue in a private laboratory is not the competent authority appro .....

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that HMSS supplied was 'unshredded' and justifies the bonafide of appellant being an actual user. Therefore, the goods imported are "Heavy Melting Steel Scrap" and the clearance is allowed after mutilating the goods under customs supervision followed by the decision of Hon'ble Madras High Court, uphelded decision of the Tribunal in the case of COMMR. OF CENTRAL EXCISE, MADURAI Versus SRI RENGA STEEL CORPORATION 2014 (9) TMI 522 - Madras High Court. - Decided against the Revenue - Appeal No. C/40 .....

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ot; [HMSS] of quantity of 518.38 MTs . On examination the goods were found to be "10% scrap and 90% secondary welded pipes". Samples were drawn and sent to private laboratory viz. Sargam Laboratory Pvt. Ltd. Based on the test report, the adjudicating authority confiscated the goods and imposed redemption fine of ₹ 30 lakhs and personal penalty of ₹ 10 lakhs and also rejected the declared value and enhanced the value. On appeal, the Commissioner (Appeals) in his impugned ord .....

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ndirectly admitted the misdeclaration and submits that they cannot raise a new plea on this issue. She submits that as per the test report, the goods are 90% secondary welded pipes and it cannot be considered as HMSS. She further submits that Commissioner (Appeals) should not have allowed for mutilation of the goods. She relied the following citations :- (1) ACC Ludhiana Vs Aman Alloys Ltd. -2011 (271) ELT 200 (P&H) (2) BSNL Vs CCE - 2015 (320) ELT 544 (All.) 3. On the other hand, Ld. Advoca .....

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HMSS to their overseas supplier. The quantity of imported goods of 518.38 MTs cleared under the said bill of entry was covered in this lot. As per the purchase order and the sales confirmation, their principal had supplied the goods as "Heavy Melting Steel Scrap". He drew our attention to supplier's Pre-Shipment Inspection Certificate accompanied the said goods and submits that the goods were certified as "Heavy Melting Steel Scrap" and the country of inspection is Germa .....

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y Pvt. Ltd. is not approved by the Customs or CRCL. He further submits that the goods were imported in July 2012 and is still in the custody of Customs. He submits that the Commissioner (Appeals) ordering for mutilation of the goods before clearance is well within the law. He relied the following citations. 1) Sri Renga Steel Corporation Vs CCE & Customs Madurai-2006 (206) ELT 993 (Tri.-Chennai) 2) CCE Madurai Vs Sri Renga Steel Corporation-2014 (305) ELT 377 (Mad.) 3) P.A.B. Traders Vs CC C .....

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der was dismissed. He therefore submits that Revenue relying on Punjab and Haryana High Court decision in the case of Amman Alloys Ltd. (supra) is prevailed over by jurisdictional Madras High Court's ruling in the case of Sri Renga Steel Corporation (supra) which is binding on the authorities and the Tribunal. He also relied on CC Chennai VsGarg Steel - 2007 (219) ELT 195, Dewan Steel Industries VS CC Amritsar - 2008 (226) ELT 616 (Tri.-Del.). 4. In rejoinder, Ld. A.R rebutted the arguments .....

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o appellant is furnished. The relevant part is reproduced as under :- As per the above contract, the appellants have placed orders for supply of 1000 MTs of HMSS with the overseas supplier, Singapore which is confirmed by the sales confirmation order dt. 26.7.2012. As per the contract and sales confirmation report and the Bill of Lading, invoice the goods were described as "Heady Melting Steel Scrap". Further, on perusal of the test report, pre-shipment inspection certificate, dt. 26.6 .....

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uced as under :- 4. We have carefully considered the submissions. Ld.Counsel has submitted that the appellants are willing to clear the goods on payment of duty as applicable to scrap if permitted to mutilate the goods. He has also contended that, as there was no misdeclaration of the goods by the party, the Commissioner s order confiscating the goods and imposing penalty on the party cannot be sustained. In the case of Madanlal Steel Industries (supra), it was held by the Hon ble Supreme Court .....

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AP . Both the Bills of Entry declared the goods as G.I. & M.S. WIRE SCRAP . The goods were, admittedly, covered under a HIGH SEAS SALES AGREEMENT, which described the goods as LMS-LIGHT MELTING SCRAP . M/s. Aruna Machine Tolls Import and Export, Madurai, the High Seas buyers, in their statement, confirmed that the goods were purchased for melting purpose. This statement was never retracted. It was not contradicted by the department either. On these facts, in our view, it must be held that th .....

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ase, found, on physical examination, that the goods were usable/serviceable and hence not scrap. Obviously, the adjudicating authority did not want to record a finding of misdeclaration by the importer only on the basis of their statement. Otherwise, the authority would not have sent samples of the goods for chemical examination and inspected the goods himself. Ld. Commissioner chose to take the importer s statement as a corroborative evidence only. The main peace of evidence, found by the Commi .....

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he imported goods were useable/serviceable, we have to give the benefit of doubt to the importer. As the Commissioner himself chose not to take the importer s statement as conclusive evidence of misdeclaration of the goods, we would not be justified in taking a different view inasmuch as it has never been the department s proposal to confiscate the goods solely on the basis of importer s statement. At this juncture, one has got to fall back on other evidentiary materials on record. We have alrea .....

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s well be discerned as a gesture to reassure the department that the goods would only be used for melting purpose. The appellants can be seen as acting without intent to evade Customs duty. The ruling handed down by the Apex Court in the case of Madanlal Steel Industries (supra) is against mutilation of misdeclared goods. Now that we have found no misdeclaration by the importer, the plea made by the appellants for permission to mutilate the goods cannot be defeated on the strength of the said ru .....

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ed on the importer under Section 112 of the Act on the ground that the importer, by misdeclaring the goods, rendered the goods liable to confiscation under Section 111. Now that we have found no misdeclaration of the goods by the importer, there is no reason for confiscation of the goods or for penalty on the importer. 7. In the result, we set aside the impugned order to the extent of setting aside confiscation (with redemption fine) and penalty and permitting the appellants to clear the goods i .....

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ded in the present Civil Miscellaneous Appeal is as to whether the respondent is liable to pay duty on the basis of scrap materials or on the basis of usable things. 8. The entire argument putforth on the side of the appellant hinges upon the report filed by the Commissioner as well as the statement alleged to have been given by one of the partners of the respondent. 9. It has been conceded on the part of the appellant that the Commissioner has not noted down the features of the things which are .....

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ant cannot be accepted. 11. Even in the statement alleged to have been given by one of the partners of the respondent, complete description as well as length and breadth of the things which are in question have not been mentioned. In fact, in the statement alleged to have been given by one of the partners of the respondent, only small quantity as well as length of wires have been mentioned. Under the said circumstances, the Court can come to a conclusion that the things which are in question can .....

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deserves to be dismissed. 13. In fine, this Civil Miscellaneous Appeal deserves dismissal and accordingly is dismissed without costs. The ratio of the High Court decision and this Tribunal's decision (supra) is clearly applicable to the present case as the issues are identical and also considering the fact that there is no misdeclaration by appellant as seen from the purchase order/sales contract and sales confirmation report and pre-shipment inspection certificate, wherein appellants have .....

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