2007 (5) TMI 460 - AT - Customs

Tribunal grants waiver & stay for penalty on mis-declaration of imported steel scrap

The Tribunal granted waiver of predeposit and stay of recovery for penalty amounts imposed on appellants for mis-declaration and mis-classification of ... Stay/Dispensation of pre-deposit - Penalty Issues: Mis-declaration and mis-classification of imported goods; Confiscation of goods and imposition of penalties; Waiver of predeposit and stay of recovery of penalty amounts; Classification of goods as 'non-alloy steel scull scrap' with 'slag' content.In this case, the appellants imported 'non-alloy steel melting scrap' declared as 'skull' and classified it as 'Ferrous scrap' under Heading 7204. The National Metallurgical Laboratory confirmed the material as 'non-alloy steel skull scrap' suitable for melting with about 80% iron recovery, but noted some 'slag' content. The Customs department alleged mis-declaration and mis-classification, leading to confiscation of goods and penalties. The original authority upheld these allegations, imposing fines and penalties under the Customs Act. The appeal against this decision was unsuccessful, resulting in the provisional release of 80% of the consignment. The present applications sought waiver of predeposit and stay of recovery for the penalty amounts.Upon reviewing the NML report and relevant classification codes, the Tribunal found that the item would have been classified under Heading 72.04 if 'slag' had been absent. Reference to the CODE FOR CLASSIFICATION OF PROCESSED FERROUS SCRAP and a previous case supported the appellants' claim for unconditional clearance based on the importer's declaration. The Tribunal also noted a factual error in equating 'skull scrap' with 'scull scrap' under a different heading. Technical literature and legal precedents were cited to establish the distinction between 'scull' as 'Zinc scrap' and 'Ferrous scrap'. Consequently, the Tribunal granted waiver of predeposit and stay of recovery for the penalty amounts, considering that 20% of the consignment was still in departmental custody.Furthermore, the appellants requested expedited appeal disposal due to the withholding of a part of the consignment on unjustifiable grounds. They claimed the bill of entry was valid and uncontested. Acknowledging the unique circumstances, the Tribunal agreed to an out-of-turn disposal of the appeal, scheduling the hearing for a specific date to address the issues promptly and fairly.