Cce, Ghaziabad vs M/S R.K.G. International

[Arising out of Order-in-Appeal No. 78-Cus/ZB/2010 dated 21.5.2010 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Ghaziabad]

For Approval & Signature :

Honble Mr. Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

CCE, Ghaziabad Appellant

Vs.

M/s R.K.G. International Respondent

Appearance:

Shri B.B. Sharma, D.R. - for the Appellant

Shri Mayank Garg, Advocate - for the Respondent

Coram : Honble Mr. Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

F. Order No. 50403/2015

Per R.K. Singh :

Revenue is in appeal against the Order-in-Appeal No. 78-Cus/ZB/2010 dated 21.5.2010 which set aside the order-in-original dated 2.2.2010.

2. The respondents had filed Bill of Entry dated 24.12.2009 declaring the goods as (i) 98.940 MT heavy melting steel scrap (ii) 170.350 MT steel slabs. After examination, Revenue took a view that what was declared to be heavy melting scrap was actually re-rolling scrap and therefore not eligible for concessional rate of duty under Notification No. 21/2002-Cus (Sl. No. 20). The adjudicating authority holding that there was mis-declaration of re-rolling scrap as heavy melting scrap as per the examination report of the custom officers ordered confiscation of the same under Section 111(d) & (m) of Customs Act, 1962. Further, although in the discussion and finding portion of the primary order the steel slabs were held to be liable to confiscation under Section 119 ibid, in the order portion of the order they have been confiscated under Section 111(d) & (m) ibid. The primary adjudicating authority imposed redemption fine in lieu of confiscation and also penalty.

3. The Commissioner (Appeals) observed that the relevant invoices of the foreign supplier as well as the pre-shipment inspection certificate describe the impugned goods as HMS and so do the high sea sale contract and the bill of lading. She noted that the respondents even requested for mutilation of goods if the Revenue considered them to be usable as re-rolling scrap and that their request was rejected. She thus found no basis to sustain the impugned order with regard to allegation of mis-declaration of description. She also noted that value had been enhanced from Rs.41,23,580/- to Rs.47,29,432/- without giving any basis for doing so and found that too unsustainable. The first appellate authority thus set aside the order in original.

4. Revenue has contended that the examination of goods was conducted by the Inspector (Shed), Supdt. (Shed) and Deputy Commissioner (Shed) who clearly opined the goods declared as HMS to be re-rolling scrap as so-called HMS was found to be in the form of steel sheets 10 to 15 feet in length and such sheets can be clearly re-rolled and for such conclusion no expert opinion was required. Regarding enhancement of value, Revenue contended that they had used NIDB data for valuation. Revenue also stated that the respondents suggested manner of mutilation (by cutting the long pieces into smaller pieces) which shows that they knew that even after such mutilation, the goods could be re-rolled.

5. The respondents have stated that the Commissioner (Appeals) had discussed each and every argument in her order and the case is covered in their favour by the judgements in the case of Vardhaman Tradelink Pvt. Ltd. Vs. CC, Jamnagar  2009 (236) ELT 72 (Tri.-Ahmd.) and Dewan Steel Industries Vs. CC, Amritsar  2008 (226) ELT 722 (Tri.-Del.). They also cited in the judgement in the case of Midwest Granite Pvt. Ltd. Vs. CCE Hyderabad-I  2009 (233) ELT 133 (Tri.-Bang.) and Shriram Metals & Alloys Pvt. Ltd. Vs. CC, Chennai  2006 (200) ELT 274 (Tri.-Chennai), to support their contention that enhancement of value had no legal basis.

6. We have considered the submissions of both sides. We find that the original adjudicating authority held the goods to be re-rollable scrap based only on the opinion of custom authorities who examined the goods. No expert opinion was obtained. As against that, the Commissioner (Appeals) has based her findings on several documentary evidences as mentioned earlier, including the pre-shipment inspection certificate which clearly certified the goods to be heavy melting steel scrap. In a dispute involving Custom, the Revenues argument that examination report by Customs officers should be accepted without any other supporting evidence defies even the most basic jurisprudential principles. It is also seen that in the discussion and finding portion of the primary order there is not even a word about enhancing the value, leave alone basis for doing so. Thus enhancement of value is devoid of sustainability. In the case of Vardhman Tradelink Pvt. Ltd. (supra), CESTAT observed as under :

6.?The appellant have placed reliance upon the Tribunals decision in the case of M/s. Antartic Industries Ltd. v. CC, Kandla [l999 (108) E.L.T. 496 (Tri.)] laying down that the contention of the importer that such goods may be serviceable in India but for the purposes of exporting countries they have to be regarded as scrap and the same should have been cleared on mutilation of the goods. We note that in the present case also if the Revenue authorities were entertaing any doubt about the part of the consignment being re-rollable scrap, they could have ordered clearance after mutilation. We further note that surprisingly after holding a part of the goods as re-rollable scrap, Commissioner has not enhanced the value, though he has observed in the same impugned order that value of the re-rollable scrap is higher. Similarly in the case of M/s. Global Shiptrade (P) Ltd. v. CC, Kandla [2002 (142) E.L.T. 152 (Tri.-Del.)], it was held that in the absence of any evidence produced by the Department to prove that a part of the goods being pipes were of serviceable nature, the same have to be treated as melting scrap only.

7.?The appellants have also relied upon the following evidences to show that the goods were contracted as heavy melting scrap and were actually supplied by the supplier as heavy melting scrap.

(i) Bill of lading which shows the goods as HMS.

(ii) Invoice of the foreign supplier, which shows the goods as HMS.

(iii) Pre-shipment inspection certificate which also shows the HMS.

(iv) High sea sale contract which also shows the HMS.

(v) Letters of Hardware Trading Corp. which whom the High Sea contract was executed, which also shows the HMS.

(vi) Invoice of M/s. Hardware Trading Corp., Mumbai.

As is clear from the above, the entire documentary evidences on record reflect upon the fact that the imported goods were nothing but heavy melting scrap and there being no expert opinion to conclude against the appellant, we extend the benefit to them and set aside the impugned order. Appeal is allowed with consequential relief to the appellant.

In the case of Dewan Steel Industries (supra) the denial of mutilation was held to be unsustainable.

6. In the light of the foregoing, we do not find any merit in Revenues appeal and the same is therefore dismissed.

(Justice G. Raghuram)

President

(R.K. Singh)

Member (Technical)

RM

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