Classification of imported scrap versus machine parts turns on condition at import, not possible post-import repair

Imported goods described across shipping and import documents as re-rollable scrap were found to be old, used, rusted and damaged, and the evidence did not establish that they were brought in as usable parts of steel sheet and plate bending machines. The controlling test was the condition of the goods at the time of import, and the mere possibility of repair or reconditioning did not convert scrap into machine parts. As the record also failed to show that the goods were valued or actually used as rollers, the classification as machine parts was not sustained and the demand, confiscation and penalty could not survive.

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Issues: Whether the imported goods, declared as re-rollable scrap, were in fact parts of steel sheet and plate bending machines liable to be classified and assessed as machine parts.

Analysis: The goods were described as re-rollable scrap in the supplier's invoice, bill of lading, packing list, pre-shipment inspection certificate and the appellant's import documents. The record showed that the goods were old, used, rusted and damaged, and the Revenue's own material did not establish that they were imported as usable machine parts. The controlling test was the condition of the goods at the time of import, and the mere possibility of use after small repair or reconditioning did not convert scrap into machine parts. The absence of evidence that the goods were valued or actually used as rollers also weakened the Revenue's case.

Conclusion: The imported goods were not established to be machine parts and were to be treated as re-rollable scrap; the demand, confiscation and penalty could not survive.

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