Declared scrap goods supported by inspection certificate cannot be reclassified or denied mutilation without proof of misdeclaration.

Imported goods supported by contemporaneous commercial documents and a recognised pre-shipment inspection certificate may be treated as scrap, and Customs cannot reject the declared description or value without cogent evidence of misdeclaration or contrary technical proof. A request for mutilation need not be denied merely because it is made after departmental examination where the importer had no shown knowledge that the consignment contained serviceable material. On that basis, the goods were directed to be mutilated under customs supervision and cleared as scrap, with the adverse confiscation, redemption fine and penalty set aside.

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Issues: (i) whether the importer was entitled to mutilation of the imported goods and clearance of the goods as scrap under the customs law; (ii) whether rejection of the declared description and value, and the consequent confiscation, redemption fine and penalty, were sustainable.

Issue (i): whether the importer was entitled to mutilation of the imported goods and clearance of the goods as scrap under the customs law.

Analysis: The goods were imported as heavy metal scrap under the shipping documents and supported by a pre-shipment inspection certificate issued by a DGFT-registered agency. The objection arose only after examination by Customs, and there was no material to show that the importer had knowledge that the goods contained assorted-sized panels or serviceable material. In such circumstances, the request for mutilation could not be denied merely because it was made after detection by the department. The statutory request was therefore governed by the entitlement to seek mutilation of goods that were sought to be cleared as scrap.

Conclusion: The importer was entitled to mutilation and clearance of the goods as scrap, and the denial of mutilation was unsustainable.

Issue (ii): whether rejection of the declared description and value, and the consequent confiscation, redemption fine and penalty, were sustainable.

Analysis: The documents on record consistently described the consignment as heavy melting steel scrap, and the technical certificate from the approved agency supported that description. The department did not establish any deliberate misdeclaration or any reliable basis to discard the declared value and revalue the goods under the customs valuation framework. Once the goods were treated as scrap and were directed to be mutilated under supervision, the foundation for confiscation and the imposition of redemption fine and penalty did not survive.

Conclusion: Rejection of the declared description and value was not justified, and the confiscation, redemption fine and penalty were liable to be set aside.

Final Conclusion: The goods were held to be heavy melting steel scrap, to be mutilated under customs supervision and cleared as scrap on appropriate duty, with the adverse adjudication set aside in consequence.

Ratio Decidendi: Where imported goods are supported by contemporaneous commercial documents and a recognised pre-shipment inspection certificate showing them to be scrap, Customs cannot reject the declared description and value or deny mutilation absent cogent evidence of misdeclaration or contrary technical proof.

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