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2018 (2) TMI 961

Provisional release of goods - import of Heavy Melting scrap at ICD, OWPL Ludhiana declaring the grade of the scrap as ISRI 207 - said goods were examined and on detailed examination of the consignment declared as Heavy Melting scrap ISRI code 207, the imported goods were found containing CR sheets/sheet cutting cut to various sizes weighing 132.895MT and 159.575MT respectively - mutilation of goods. - Held that: - As there is divergent views of the Members of this Tribunal, therefore the ma .....

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trips 720915 720916 720917 720918 720925 720926 720927 720928 72099000 721123 72119090 (a) Products confirming to grade designation CRI, CE2, CR3, CR4, CR5 18th December, 2016 (b) For products other Than (a) above 18th March, 2016 Accordingly, the seized goods mentioned in Table 1 above i.e. CR sheets/strips/slits width less/more than 600mm, coated/ plated sheets/strips/slits which were serviceable and HMS are released on the following conditions under Section 110A of the Customs Act, 1962:- (i) .....

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r the goods from the period for which they remained a detained in terms of regulation 6(1)(e) of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR, 2009). In Appeal No.C/60452/2017 (i) The goods shall be assessed to duty provisionally on the basis of the declared invoice value, without any prejudice to the right of the department to issue the show cause notice on any aspect including valuation. (ii) The representative samples of the impugned goods mentioned in Table -1 & 2 excluding .....

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mon order. 3. The brief facts of the case are that the appellant filed two bills of entry Nos.8155288 dated 10.01.2017 and 8414179 dated 02.02.2017 for import of Heavy Melting scrap at ICD, OWPL Ludhiana declaring the grade of the scrap as ISRI 207. The said goods were examined and on detailed examination of the consignment declared as Heavy Melting scrap ISRI code 207, the imported goods were found containing CR sheets/sheet cutting cut to various sizes weighing 132.895MT and 159.575MT respecti .....

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ns as laid-down in the standing order. As per the internationally accepted code of ferrous scrap (ISRI), however, the said goods were detained, wherein examination was conducted with the help of the Chartered Engineer Shri Anil Soni. Shri Anil Soni, who is not the Metallurgical Engineer, vide report dated 17.02.2017 in respect of Bill of Entry No.8414179 dated 02.02.2017 as per visual examination conducted by him, out of the total quantity of 132.895 MTs declared scrap, CR sheets/ Strips/ Slits .....

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strips/slits (CR) width less than 600mm (secondary and defective) weighing 72MTs and the balance material was reported as scrap. The said report is also on the basis of eye estimation without obtaining any market opinion or even segregation and weighment of the material, despite the request made by the appellant. He further submits that on the said findings the goods imported were detained and later on seized and assessed provisionally. The appellant, aggrieved from the said reports, had request .....

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epted and after physical examination of the material, vide his report dated 14.03.2017 NISST confirmed that the material imported by the appellant is scrap as per ISRI 207, particularly Busheling Scrap. The said report has been given after considering all the factors of secondary steel, ISRI specification and explanation as per Chapter XV 8(a) of the Customs Tariff. It is his submission that the said institute (NISST) is BIS recognised laboratory. He further submits that despite the fact that th .....

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irected by the Commissioner vide standing order dated 30.05.2013 and the same has not been accepted by the adjudicating authority which is binding on them. 5. He further submitted that the report of the Chartered Engineer who reported the goods to be secondary and defective and the conclusion and ascertainment of quantity has been based on the visual examination and without segregation and weighment of the goods. It is pertinent to mention that the Chartered Engineer have reported the quantity o .....

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lant are scrap as per ISRI. Moreover, the said Customs empanelled Chartered Engineer who had jointly examined the material with the help of Metallurgical Engineer Shri Tophanwala has reported that since the material falls within the criteria specified under ISRI, the same falls under the category of Heavy Melting Scrap. The recommendation of the said chartered engineer for obtaining the market opinion has not been accepted. He further submits that adjudicating authority has erred in relying on P .....

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her submits that on the one hand the department discredit the report of the chartered engineer and on the other hand, on the basis of the said report, goods were assessed and declaration was rejected. The report of the chartered engineer cannot be accepted in part or rejected in part, therefore the order of the adjudicating authority is bad in law as the findings of the adjudicating authority is pre-mature based upon the test report which was obtained after the passing of the order-in-original h .....

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rays the impugned orders are to be modified and the Condition No.2 in the impugned orders are required to be deleted. 6. Ld. AR opposed the contention of the Id. Counsel and submits that before the Hon'ble High Court, the appellant themselves submitted that they may be allowed the goods after mutilation. He submits that as per Section XV 8(a) defines the waste and scrap metal waste and scrap obtained from the manufacture or mechanical working of metals and metal goods definitely not usable a .....

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internationally accepted ISRI Code for ferrous scrap. (ii) The classification of ferrous scrap under various ISRI code shall be guided by ISRI Rules of General Information" applicable to the ferrous scrap, subject to the condition that : (a) The "negligible amount" of metallic material referred to in Rule (b) of General Information shall be deemed to be upto 2% of the total weight of the imported consignment, and (b) a minor extent" of variation in size limitation applicable .....

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ondary and defective) weighing 02.00 MTs and the balance material weighing 65.895 MTS was reported to be Heavy Melting Scrap and only 7 MT can be said to be not as per ISRI Code-207. The Standing Instruction allows the variation in size upto 10% of the total quantity. Admittedly, in respect of Bill of Entry No.8414179 dated 02.02.2017, the variation is less than 10%. Further, with respect to Bill of Entry No.8155288 dated 11.01.2017, as per report of Shri Rajesh John, out of the total declared w .....

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bindgarh. As per the said report, it is concluded that the material in question is a type of melting scrap and cannot be termed as prime material or secondary defective input material for further commercial productions. The same has been recognised by BIS vide their letter dated 28.10.2016. The report is extracted as under:- The Revenue, on the other hand, has relied on the letter issued by NISST dated 24.03.2017 to say that, in case somebody ventures into waste utilization other than re-melting .....

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. In that circumstance, if the said goods qualify the specifications as per ISRI 207, the goods are to be released without mutilation. The said order of mutilation stands the harassment to the trade and against the Standing Instructions No.02/cus/2013 dated 30.05.2013. 9. We further find that the adjudicating authority has classified the goods as Cold Rolled sheets therefore, needs mandatory compliance of BIS is based on the test reports obtained after passing of the order. The said test reports .....

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e seized goods to bind himself to pay in case of demand the differential duty, fine, penalty or interest as may be leviable on such goods, if these are held to be other than scrap, subsequently in adjudication. (iii) The Assistant Commissioner (Shed), CFS OWPL, Ramgarh, Ludhiana shall issue a Detention Memo for the goods from the period for which they remained a detained in terms of regulation 6(1)(e) of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR, 2009). 9. The appeals disposed o .....

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en by the empanelled Chartered Engineers are tabulated below. Sr.No. Name of Chartered Engineer Sh. Date Report Description of goods actually found Appx. Quantity MT 1 Rajesh John 02.02.17 i) CR sheets/strips/slits width less than 600 mm (Second & defective) 60 ii) CR sheets/strips/slits width more than 600 mm (Second & defective) 05 iii) Coated/plated CR sheet (Second & defective) 02 2 iv) Melting Scrap 65.895 3 Varun Chandok 01.03.17 He opined that he could not Rule out any possibl .....

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s/strips/slits having uniform dimensions and width less than 600 mm (Second & defective) 72 iii) Coated/plated sheet pcs/strips (Second & defective) 15.75 2 Varun Chandok 01.03.17 He opined that he could not Rule out any possible re-use of this material (para 4, page 4), that as the consignment is in a mix condition and unable to opine neither for the total contents of scrap nor for any type of material (para 1, page 5) & that commercial marketability of the gods exceeding 2 feet by .....

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udicating authority and the first appellate authority as it was obtained by importer subsequently. The NISST has not tested the goods for carbon content of the impugned material. 131 I find that the goods were also tested for carbon content as per the directions of the adjudicating authority in his order dt.12.4.2017. On testing of the goods at the Research and Development in Bicycles and Sewing Machines (RDBSM) laboratory, Ludhiana, the material in question has been found to be low carbon steel .....

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by the adjudicating authority, who will pass a fresh order after giving fair opportunity to appellant to defend their case. 16. In the result, the appeals are disposed of by way of remand in above terms DIFFERENCE OF OPINION As there is divergent views of the Members of this Tribunal, therefore the matter may be placed before the Hon'ble President to appoint third Member to resolve the following issue; Whether the goods can be released provisionally to the appellant as per the terms and con .....

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