Nickel silver scrap classification: lump form alone did not prove misdeclaration, and confiscation and penalty were set aside.

Imported nickel silver scrap covered by the relevant scrap description was not misdeclared merely because it appeared as irregular metallic lumps after being converted for transport, and that form did not by itself show the goods were ingots, bars or rods. The importer's status as a 100% export oriented unit under exemption notification meant no customs duty liability arose, so no motive or mala fide for misdescription or undervaluation was established. The allegations of misdeclaration and undervaluation therefore failed, and confiscation and penalty were set aside.

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Issues: Whether the imported nickel silver scrap was liable to be treated as misdeclared goods or as ingots/bars/rods, and whether confiscation and penalty were sustainable.

Analysis: The goods were imported by a 100% export oriented unit under exemption notification. The chemical examination described the goods as irregular metallic lumps, and the record showed that the scrap had been converted into lumps for transport from a country where export of scrap was restricted. The description of the relevant scrap grade was found broad enough to cover such material, and the mere fact that the goods were in lump form did not establish that they were not scrap. Since the unit was not liable to customs duty on the import, no motive or mala fide for misdescription or undervaluation was found.

Conclusion: The allegations of misdeclaration and undervaluation were not sustained, and confiscation as well as penalty were set aside.

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