M/S. Bright Steel House vs C.C. Amritsar

[Arising out of Order-In-Appeal No. ASR-CUSTM-PVR-251-14-15, dated 19.12.2014 passed by Commissioner (Appeals) Ludhiana]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

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

2 Whether it should 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 Departmental authorities?

M/s. Bright Steel House ...Appellant

Vs.

C.C. Amritsar Respondent

Appearance:

Mr. Saurabh Kapoor (Advocate) for the Respondent

Mr. Pramod Kumar, DR for the Appellants

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing.23.06.2015

Final Order No. 52094 /2015_

Per S K Mohanty:

Imposition of redemption fine of Rs. 1,50,000/- & personal penalty of Rs. 50,000/- in the impugned order is the subject matter of present dispute. The brief facts of the case, leading to this appeal, are as follows.

1.1 The appellant had imported certain consignment of re-rollable steel scrap through ICD Port, Ludhiana and filed the bill of entry for clearance of the imported consignment. Based on the declaration in the bill of entry, the Customs Authorities at the port of import inspected the goods and found that part of the goods imported are H beam, having length of 12 to 14 (secondary/defective). On the basis of such investigation, the value of USD 392 PMT declared by the appellant in the bill of entry was rejected and the value was determined at USD 450 PMT by referring to Rule 5 of the Customs Valuation Rules, 2007. Both the classification and valuation aspect with regard to the subject import were adjudicated vide order dated 15.03.2013 and the differential amount of duty was confirmed as payable by the appellant. Besides, redemption fine and personal penalty have also been imposed on the appellant in the said adjudication order. The appellant it not disputing the duty liability confirmed in the adjudicaiton order. However, the appellant is contesting the redemption fine and penalty imposed in the adjudication order and subsequently confirmed in the impugned order.

2. The Ld. Advocate, Sh. Saurabh Kapoor appearing for the appellant submits no technical expert in the field has been engaged for verification of the nature of the imported goods, i.e., whether the same is rerollable steel scrap or H Beams. According to the Ld. Advocate, the Appraising Officers posted at the port are not the expert in the field of metallurgy, and as such, they are not competent to say that the goods are not the same as indicated in the import documents. It is his further submission that the import documents such as the contract entered with overseas suppliers, invoice, packing list, bill of lading, country of origin certificate etc., have not been disputed by the Customs Authorities, with regard to the description of the goods mentioned therein, and as such, the allegation is far-fetched that the goods imported is H Beams and not rerollable steel scrap. He, further submits that M/s World Wide Inspection Service (P) Ltd. upon analysis of the imported goods have certified that the description of the goods imported by the appellant is rerollable steel scrap of 99.50 MT. Since, the said certificate issued by the inspection agency of worldwide repute has not been disputed by the Department at the port of import, the description cannot be changed and duty liability cannot be fastened against the appellant. To support his above stand, the Ld. Advocate has relied on the following decisions of the Tribunal.

* HR Enterprises vs CC (ICD) New Delhi reported in 2012c (284) ELT 83 (Tri. Del)

* CC Jodhpur vs Sunshine Artifacts reported in 2012 (280) ELT 156 (Tri. Del)

* Bengal Export Corpn vs CC (Port) Kolkata reported in 2012 (278) ELT 332 (Tri. Kolkata)

* Shiva Ispat Udyog vs CC (Port) Kolkata reported in 2010 (254) ELT 297 (Tri. Kolkata)

* MTC Busines (P) Ltd. vs Commr of Cus (Import), Nhava Sheva reported in 2012 (275) ELT 462 (Tri. Mum)

* Global Shiptrade (P) Ltd. vs Commr of Customs, Kandla reported in 2002 (142) ELT 152 (Tri. Del)

* Trishla Steel Engg Co. vs CC (Import), Nhava Sheva reported in 2014 (313) ELT 443 (Tri. Mum)

* Prateek Traders vs CC Ahmedabad reported in 2009 (248) ELT 462 (Tri. Ahmd)

* Vardhaman Tradelink (P) Ltd. vs CC Jamnagar reported in 2009 (236) ELT 72 (Tri. Ahmd)

3. Per contra, Ld. Jt. CDR Sh. Pramod Kumar appearing for the Respondent submits that during examination, since the consignment was found to be H Beam having length of 12 to 14 (secondary/defective), the same cannot be considered as rerollable steel scrap. In this regard, the Ld. Jt. CDR placed reliance on Note 8(a) of section XV of HSN Explanatory Notes wherein the term waste and scrap has been defined to mean metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons. He further submits that classification of the goods physically available at the port of import should be considered as the basis for classification of the imported goods and the classification cannot be determined based on the usage of the goods. It is his further submission that since the goods have been mis-declared by the appellant, the Department is justified in invoking Rule 5 of the Customs Valuation Rules, 2007 to determine the duty liability based on the similar/ identical goods imported at or about the same time of import. According to the Ld. Jt. CDR, since the appellant has waived issuance of SCN and deposited the assessed duty liability without any protest, it has to be construed that the change in the classification of the goods has been accepted by the appellant and in such circumstances, imposition of redemption fine and penalty is justified.

4. Heard the Ld. Counsel for both the sides and perused the records.

5. The fact is not under dispute that the appellant had imported rerollable steel scrap. The said fact is evident from the import documents such as the invoice issued by the overseas supplier, the packing list, bill of lading, certificate of origin etc. Upon examination of the goods at the port of export, M/s World Wide Inspection Service (P) Ltd. have also certified that the description of the goods exported from the country of origin was rerollable steel scrap. Further, the contract entered into between the appellant and the overseas suppliers clearly mentioned that the commodity to be supplied is rerollable steel scrap. The description of the goods as indicated in the said documents have not been disputed by the Customs Authorities at the port of import. Further, for verification/ inspection of the goods at the port of import, the Department have not engaged the services of any expert in the field. In absence of any doubt about the genuineness of the import documents submitted by the appellant and without proper inspection of the goods by the authorized/ approved agency, it is not prudent on the part of the Department to change the classification of the goods to H Beam having length of 12 to 14 (secondary/ defective).

Since the genuineness of the import documents have not been questioned in the present case, in my opinion, imposition of redemption fine and personal penalty by the authorities below are not justified. In this regard, I find support from the decision of this Tribunal in the case of MTC Business (P) Ltd. (supra) wherein it has been held that once the import documents submitted by the importer has not been rebutted by the departmental officers, the classification of goods cannot be changed to the detriment of the importer. Invocation of Rule 5 of the Valuation Rules is not justified in the present case because, in order to prove that the goods are similar, it is required to ascertain that the country of origin is same in case of comparable goods with the goods relevant for assessment. In the case in hand, the country of origin was Sharjah- UAE, whereas in the bill of entry dated 7.2.2013 referred to in the adjudication order, the originating country was different. Thus, the goods cannot be considered as similar. Further payment of duty by the appellant at the enhanced rate without contesting the enhanced duty liability, was due to avoidance of demurrage and detention charges of the vessel.

Such payment cannot prove under-valuation of goods for the purpose of imposition of redemption fine and penalty, especially in view of the fact that the onus vest with the customs department has not been satisfactorily discharged.

6. Considering the fact that import documents available in the file prove bonafides of the appellant, the genuineness of which have not been disputed by the Department, I am of the view that imposition of redemption fine and personal penalty on the appellant is not justified. Thus the impugned order imposing redemption fine and personal penalty is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

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