TMI Blog2002 (6) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ered confiscation of the goods and offered its redemption on payment of fine of Rs. 10 lakhs under Section 125 of the Customs Act. He further imposed a penalty of Rs. 2.50 lakhs under Section 112(a) of the Customs Act. 3. Aggrieved by this order passed by the Commissioner of Customs, the appellant herein filed an appeal (C/Appl/343/01) along with an application for waiver of pre-deposit and stay of the recovery of the amount and also prayed for out of turn hearing in the facts and circumstances of the case. This Bench of the Tribunal vide Final Order No. 1721/2001, dated 3-10-2001 set aside the adjudication order passed by the ld. Commissioner with the direction that the case should be readjudicated in the light of the observations made by this Hon'ble Tribunal and it was specifically observed that the ld. Commissioner ought to have given reasons why such experts opinions was not acceptable to him. It was however open to the Commissioner to have called the experts for cross-examination or to elicit further details from them. It was also open to the Commissioner to have called upon these experts to examine the consignment and also take samples for tests so that if there was any do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 017169, dt. 21-5-2001 for clearance of goods declared as 72.635 MTs of TFS w/w Defective Sheets 0.33 mm and lighter temper and 152.239 MTS tin plate w/w defective sheets. The goods were imported from M/s. Fer Export s.a. vide invoice Nos. 0103/31 and 0103/31 (supplementary invoice) dated 14-5-2001. The total value of the goods was declared as US$ 86,770.84 Bill of Entry was assessed by adopting the value of US $ 220 for tin free defective sheets and US $ 465/MT for tin plates defective under DEPB Scheme. Importers produced DEPB licence No. 410015218, dt. 13-6-2001 for a value of Rs. 2,68,767/- equivalent to basic customs duty on 72.635 MTs of TFS defective sheets. An amount of Rs. 23,04,423/- was paid towards additional duty on TFS defective sheets and total customs and additional duty on 152.239 MTs tin plates defective sheets. 3. When the goods were examined on 4-7-2001 there arose a doubt whether the item can be considered as waste/defective as declared by the importer. The matter was referred to National Metallurgical Laboratory (NML), Chennai, for their expert opinion. The NML vide their letter No. NM/MC/04/031/2001-02, dated 16-7-2001 stated that the entire consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory experts can be called for cross-examination. The Hon'ble CEGAT further directed that the correct nature of the goods should be redetermined on the basis of the importer's expert opinion and National Metallurgical Laboratory report. On the basis of these directions the experts of the importers namely, Dr. K. Prasad Rao, Professor and Head of Department of Metallurgical Engineering, Dr. N. Krishna Raj, Consultant Metallurgist and Dr. V. Mohan, Proprietor of M/s. V.M. Enterprises were given an opportunity to examine the goods. National Metallurgical Laboratory was also requested to be present at the time of examination. The goods were examined by a team consisting of Dr. K. Prasad Rao, Dr. N. Krishna Raj and Dr. V. Mohan. No representative from National Metallurgical Laboratory was present. The team after examination of the goods gave a report with the following observation :- "17 packages of tin plate sheets and 18 packages of tin free steel (TFS) sheets were examined (35 out of 159 packages making up to more than 20% sampling as stipulated in ISO 1111-1:1983, Section 9.1). The package Nos. and the quantity are mentioned in Annexure I. The following observations are made wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 26-11-2001 and 28-11-2001. In the written submission dated 26-11-2001 he objected to the fact that National Metallurgical Laboratory scientist was absent on the day when others experts examined the goods. In his written submission on 28-11-2001 he pointed out that the latest report of the team consisting of Dr. K. Prasad Rao and others indicated that the goods were not prime and they were only assorted and unassorted waste-waste as per clause 2.5.6 of IS 10340-1982. Further regarding the cross-examination of Dr. S. Srikanth of National Metallurgical Laboratory he submitted that it was clear that Dr. Srikanth had not examined the goods personally nor tested any of the parameters required to come to the conclusion that the goods were prime. The National Metallurgical Laboratory did not refer to any of the BIS specifications or any other international specifications and the report of National Metallurgical Laboratory did not contain any reference to visual or any other examination with reference to these standards. Further, he submitted that to a specific question from the adjudicating authority as to what exactly the goods were, Dr. S. Srikanth said that these goods were Standar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been fixed. The Advocate also submitted that the contemporaneous imports vide Bills of Entry Nos. 328677, dt. 4-6-2001 and 334551, dt. 3-7-2001 have been relied on for fixing the price of goods at a price of US $ 442 and US $ 550 PMT. He pointed out that this pertained to import of Tin Plate prime quality of a single dimension whereas the subject goods were of different dimensions, thickness, finish as is evident from the packing specifications. Therefore, by no stretch of imagination the present import can be compared with the above-mentioned bills of entry. Therefore, there was no justification in enhancing the value beyond US $ 465 PMT for Tin Plate waste-waste which was the floor price fixed by the Government of India. Further he submitted that no two consignments of waste-waste can be compared. 6. Shri A.S. Sundar Rajan and Smt. Shakthi Thyagesh, Advocates, again appeared for a final personal hearing on 4-12-2001 and gave another written submission dt. 5-12-2001. They again submitted that Dr. Srikanth of National Metallurgical Laboratory was not qualified to give a expert opinion of the goods under dispute." 6. The Hon'ble Commissioner gave his findings which are rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st at NML who explained that when they stated that tin-free sheets did not have visual surface defects, they meant that they were suitable for lacquering and printing. They confirmed that on opening 13 packages of tin-free sheets, they could not find any surface defects and, therefore, based on mere scratches or wrinkles on a few sheets, the entire material cannot be declared as seconds. They stated the definition of the prime grade tin-free steel in IS 12591-1988 was that at the time of dispatch, it was free from defects readily visible to the unaided eye. Mere presence of a few minor handling marks in a large consignment caused during the transit and handling, which can be easily removed did not affect the suitability for lacquering and printing over the entire surface on the sheets and cannot render the goods as a lower grade. When they mentioned 'no visual defects', they implied only insignificant defects were present which would not affect the suitability of the goods to lacquering and printing. As regards tin-plates, the NML stated that one 'consignment' should be a quantity of tin-plate of the same dimension and quality made available for dispatch at the same time. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t present. Later, when it was offered to the importers that a common examination could be organized, the Advocate of the importers did not agree and, therefore, no combined cross-examination was conducted. 12. I find that the Hon'ble Tribunal has stated that in view of the lack of meeting point among the experts, it may be worthwhile to get the matter referred to a third party. However, it was felt that bringing a third expert into the matter will not resolve the problem because any opinion expressed by a third expert would also be contested by one of the present experts, ie., NML or by Dr. Prasad Rao. I have also examined in detail the contentions of the Advocate on behalf of the importers submitted by his letter dated 28-11-2001. The Advocate has chosen to attack the qualification of Dr. S. Srikanth, the NML Scientist and the method adopted by him instead of trying to meet the conclusions given by Dr. Srikanth. The Advocate has made much of the fact that Dr. Srikanth has not personally examined the goods although during cross-examination, Dr. Srikanth made it clear that a group of Scientists nominated by him examined the goods and the conclusions were forwarded under the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion that the goods, both tin plate and tin free steel are waste-waste because the tin plate has roll marks, pin holes, wrinkles, etc. and tin free sheets are of different sizes, finish, etc. Because of the varying sizes, tempers, finish, they came to the conclusion that these are waste-waste. However I find though they have stated that the tin plates are of assorted sizes they have not indicated the exact number of packages which were examined by them. The Annexure I of their final report dated 5th Nov., 2001 appear to be only about handling marks which were observed by NML Scientists also during their initial inspection but the NML were clearly of the opinion that these marks did not render them of lower grade. In fact the Bureau of Indian Standards Specification also clearly mentions that handling marks caused during transit cannot render the goods as lower grade goods. Dr. Prasad Rao is not very clear whether the roll marks and dents noticed by him were due to handling of the goods. Similarly, hedging could not also have been due to handling. It is further observed that the different types of finishes in the tin sheets and they were of assorted sizes but then the NML h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment as in the present case is treated as of lower grade merely because there are differences in sizes and finishes in the packages. The grade of the goods, as rightly pointed out by the NML, should be based on the actual condition of each sheet and whether the sheet can be used for the purpose for which it is meant. From this angle, I am in agreement with the conclusions of the NML. Therefore I hold that the entire consignment of tin free sheets and 70% of the tin sheets have to be considered as prime grade and 30% of the tin sheets have to be considered as waste-waste. 16. The next question is regarding the fixation of the value for assessment. In view of the fact that the valuation of the importer was incorrect and the goods found to be other than what was declared, the declared value cannot be treated as the correct transaction value for the purpose of assessment. Therefore the value has to be determined by means of any of the Rules from Rules 5 to 8 of the Customs Valuation Rules. I find there were no imports of identical or similar goods for the purpose of comparing the present imports. Similarly no data is available to arrive at the value under Rule 7 or/and 7A (Deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, whereas the Commissioner erroneously concluded that the order was passed after hearing the appellant alone. The Commissioner failed to appreciate and consider the fact that earlier his only objection was that the experts produced by the importer had not seen the goods which deficiency was cured by the subsequent visual examination and their report confirming that their earlier conclusions are correct. The Commissioner failed to appreciate and consider the fact that in these proceedings the competency, expertise and unimpeachable integrity of the experts produced by the appellants have not been questioned. The Commissioner failed to appreciate and consider the fact that the cross-examination of the signatory to the report of NML had failed to establish his knowledge, academic or professional, and also the fact that he did not physically inspect the goods. The Commissioner failed to appreciate and consider the fact that the NML was confronted with a leading answer to the question posed to them and therefore the NML was bound to give an opinion as desired by them. On this ground alone the option of the NML are vitiated. The Commissioner failed to appreciate and consider the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give proper weightage to the unbiased, independent and authoritative opinion of the Indian Institute of Technology which was decisive of the disputed questions. The Commissioner failed to appreciate and deal with the affidavit filed by Dr. Krishnaraj, whose report he chose to ignore. The Commissioner failed to appreciate and consider the report of Dr.V. Mohan, an ex-employee of NML, whose report was not faulted by the NML. The Commissioner failed to appreciate and consider the fact that Dr. Srikanth on his own volition, chose to appear for cross-examination knowing very well that his contribution to the report was NIL. Therefore, the errors of omission or commission committed by him during cross-examination are his own. In other words, he could have chosen to field any one of his subordinates who could have probably answered many of the questions with facts and figures. The Commissioner failed to appreciate and consider the plea of the appellant herein that the second report of the NML was an after thought to justify their errors of omission and commission pointed out by the appellant herein before the adjudicating authority. The Commissioner failed to appreciate that it is settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he quality and dimensions which was not done in this case. The Commissioner failed to appreciate that instead of dealing with the issues on merits the Commissioner choose to direct his attack on the Advocates and recorded that the Advocate was merely echoing the final report of the expert. The Commissioner failed to appreciate that the Advocate was representing the appellant and the views of the experts and therefore he was duty bound to do what he was alleged to have done. The Commissioner failed to appreciate and give any rationale grounds for the appellant to accept and pay for a consignment as prime when the same consisted of mixed lot of goods. The Commissioner failed to appreciate and consider the fact that his observations on the valuation have already been faulted by this Hon'ble Tribunal and he reiterated the same without any basis. Further in the earlier proceedings the Commissioner invoked Rule 6 whereas in the present proceedings on the same findings he has invoked Rule 8 without giving any explanation as to the need for a change. The Commissioner failed to consider the other aspects of the case which did not justify confiscation of the goods or imposition of fine or pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed for permission to file the Bill of Entry on the basis of the revised invoice indicating the correct entry. The Commissioner referred the matter to the National Metallurgical Laboratory (NML), a Govt. Organisation for opinion on the goods. The goods were inspected and based on the inspection report the scientist incharge issued a report. The appellant's were aggrieved with this report. Therefore, they sought opinion from 3 of the experts of IIT, Chennai namely Dr. N. Krishnaraj, Consultant, Metallurgist, Dr.V. Mohan, Proprietor of M/s. V.M. Enterprises and Dr. Prasad Rao, Head of the Department of Metallurgy, IIT, Chennai. All the three experts had given detailed report and have commented extensively in the light of the technical literature and ISI specifications and have opined that even in terms of the report of the NML, the item is assorted waste/waste. Shri K. L. Rekhi, ld. Consultant took us to page 49 of the paper book which is a letter from FER EXPORT s.a. dated 15-11-2000 in which the supplier has offered M/s. Bansal Industries, New Delhi that they can offer stock lot material rejected by MILL and the rejected material as TFS rejected/defective/W-W sheets having thicknes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paper book and specifically to para 2.5.1, 2.5.2 and 2.5.3 and pointed out the various explanation given in the Indian Standard Glossary of Terms for Cold Reduced Tin Plate and Cold Reduced Black Plate and that the expert opinion given by Dr. Srikanth is not matching to the Indian Standard as deposed by him during the cross-examination. Ld. Consultant also took us to para 2.5.3.1, 2.5.3.2, 2.5.3.3 about 3rd grade opinion of the description mentioned in the Indian Standard are matching to the goods to the period given by them. Therefore the opinion given by the scientist of the NML cannot be relied upon. He also invited our attention to page 42 of the Order-in-Original in which it has been made clear that they have imported unasorted size and none of their product are of uniform lot. He therefore invited our attention to para 4 of the order in which they have produced expert opinions from Department of Metallurgical Engineering, IIT, Chennai and Dr. N. Krishnaraj, Consultant, Metallurgist, Chennai and Dr. V. Mohan, Proprietor, M/s. V.M. Enterprises. These opinions obtained by the importer's were forwarded to National Metallurgical Laboratory who confirmed their initial opinion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of prime quality. Ld. Consultant submits that no authority has supported the view of the Department that they are prime quality product. He also invited our attention to para 12 of the Order-in-Original and informed us that the direction to the Commissioner in view of lack of the meeting point among the experts was to get it referred to the 3rd party. The Commissioner did not act on this direction of the Hon'ble Tribunal who felt that bringing a 3rd expert into the matter will not resolve the problem because any opinion expressed by a third expert would also be contested by one of the present experts that is NML or by Dr. Prasad Rao. He, therefore, submitted that the direction as contained by the Hon'ble Tribunal has not been followed by the Commissioner by giving some justification. He also invited our attention to page 78 of the paper book and informed that it has been mentioned that they had imported one consignment and there was only one entry in the bill of entry in respect of the 159 packages. He also submitted that not even one package was valued with the dimension of the other package. He submitted that NML took up 11 packages and each package was having different dimensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR Shri G.S. Menon reiterated the findings contained in the order passed by the ld. Commissioner and submits that the goods are other than waste-waste. The opinion of Dr. Srikanth, Scientist of NML who constituted the panel and who is the senior most scientist cannot be faulted with as the NML is an autonomous organisation and his report has to be accepted. He invited our attention to packing list at page 191 and para 9 of the order passed by the ld. Commissioner. He further submitted that the floor price of 465 US $ MT is same for all the goods and they have already paid duty at the rate of 465 US $ MT. 11. We have considered the submissions made by both the sides and come to a conclusion that the Department has not chosen to refer the matter to the 3rd expert since there was difference of opinion between the scientists of NML and the experts of IIT, Madras who had given reports favourably to the assessee. We also find that the reports given by scientists of NML who have found various defects though not of much significance. Therefore the goods cannot be said to be of prime quality and some of the goods were found to be of 3rd quality by the scientists of NML. We also observe t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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