2014 (4) TMI 497 - AT - Customs

Tribunal classifies imported goods as waste and scrap under CTH 7204, rejecting Revenue's appeal

CC (Prev.) Jamnagar Versus M/s Lucky Steel Industries

CC (Prev.) Jamnagar Versus M/s Lucky Steel Industries - TMI Issues:Classification of imported goods under CTH 7302 or CTH 7204, violation of restrictions under Para 2.17 of the Foreign Trade Policy 2004-2009, confiscation of goods under Sections 111(m) and 111(d) of the Customs Act, 1962, re-valuation of goods, evidence of mis-declaration, suitability of goods for re-use, applicability of CBEC Circular No. 08/2006-Cus, relevance of case laws, consistency with past decisions, assessment of value for duty purposes.Classification of Imported Goods:The appeal involved a dispute over the classification of imported old and used railway tracks as re-rollable scrap under CTH 7302 or as waste and scrap under CTH 7204. The adjudicating authority initially classified the goods under CTH 7302 and imposed confiscation under Sections 111(m) and 111(d) of the Customs Act, 1962. The first appellate authority, however, classified the goods under CTH 7204, considering them as waste and scrap. The argument centered on whether the goods were suitable for re-use as rails or were more akin to scrap based on expert opinions and examination reports.Violation of Restrictions and Confiscation:The Revenue contended that the imported goods fell under CTH 7302 and violated restrictions under Para 2.17 of the Foreign Trade Policy 2004-2009, justifying confiscation. The Respondent argued that the first appellate authority's classification under CTH 7204 was correct, citing relevant case laws. The issue of compliance with trade policy restrictions and the consequent confiscation formed a significant part of the appeal.Re-Valuation and Mis-Declaration:The case involved a discussion on the re-valuation of goods and potential mis-declaration in the description of the imported items. The Respondent challenged the increased value for assessment, claiming no evidence of additional remittance and questioning the comparability of scrap goods for valuation purposes. The Tribunal considered the lack of material to reject the transaction value and ruled in favor of the appellants regarding the assessment of duty based on the declared value.Suitability for Re-Use and Evidence:The suitability of the imported goods for re-use as rails or their classification as scrap was a crucial aspect of the appeal. Expert opinions and examination reports indicated that the goods were not fit for re-use as rails, supporting the classification as scrap under CTH 7204. The first appellate authority's decision was upheld based on the evidence that the goods were not re-usable and were more in the nature of scrap, leading to the rejection of the Revenue's appeal.Applicability of CBEC Circular and Case Laws:Both parties relied on case laws to support their arguments regarding the classification of the imported goods. The Revenue referenced CBEC Circular No. 08/2006-Cus and relevant notifications to assert the classification under CTH 7302. In contrast, the Respondent cited recent case laws to justify the classification under CTH 7204, emphasizing consistency with past decisions and interpretations of tariff descriptions and notes.Conclusion:After considering the arguments, case records, and relevant precedents, the Tribunal rejected the Revenue's appeal and upheld the first appellate authority's decision to classify the imported goods as waste and scrap under CTH 7204. The judgment emphasized the nature of the goods as scrap rather than re-rollable material, supporting the Respondent's position. The appeal was dismissed, providing consequential relief to the Respondent, and the decision was pronounced in court on 07.04.2014.