1990 (12) TMI 249 - Commissioner - Customs

Customs Appeals Upheld for Steel Import Duty Refund Claims

The appeals by M/s. Panchmahal Steel Limited against the rejection of refund claims by the Assistant Collector of Customs, Bhavnagar, were upheld. The ... End-use certificate - Cancellation of End-Use Bond - Manifested weight based on draught survey versus actual weighment - Acceptance of weighment certificate by Port Authority - Reliance on independent surveyor weighmentManifested weight based on draught survey versus actual weighment - Acceptance of weighment certificate by Port Authority - Cancellation of End-Use Bond - Reliance on independent surveyor weighment - Whether the quantity to be accounted for in discharge of the End-Use Bond is the manifested quantity shown in the Bills of Entry (based on draught survey) or the actual quantity ascertained by subsequent weighment certified by an independent surveyor and accepted by port authorities - HELD THAT: - The Court examined the facts that the Bills of Entry recorded approximate weights derived from draught survey because no weigh-bridge existed at Bhavnagar port, whereas actual quantities were later determined by public weigh-bridge weighments supported by weighment slips certified by an independent surveyor and subsequently certified by the Port authorities. The Regional Iron & Steel Controller also certified that the material actually received was used in manufacture with electric arc furnace. There was no allegation or evidence of misappropriation or diversion of the differential quantity. The Assistant Collector's own earlier letter of 23-9-1983 had stated that physical weighments accepted by the Port Authority would be accepted for cancellation of End-Use Bonds. In these circumstances, and in the absence of an actual weighing facility at the port at the time of import, the proper basis for discharge of the End-Use Bond is the actual weighment as certified by the independent surveyor and accepted by the Port, not the approximate manifested quantity shown in the Bills of Entry. [Paras 9, 10, 12, 13, 14]The appellants are required to account only for the quantity of imported melting scrap actually received as per certified weighments; the orders rejecting refund claims are set aside and the appeals are allowed.Final Conclusion: The orders-in-original rejecting the refund claims are set aside and the appeals are allowed, holding that certified actual weighments accepted by the Port (and supported by the Regional Iron & Steel Controller's certificate) determine the quantity for cancellation of End-Use Bonds rather than the approximate manifested draught-survey weights. Issues:- Exemption from payment of basic import duty under Notification No. 151/77-Cus., dated 15-7-1977- Partial concession in respect of auxiliary duty under Notification No. 131/83-Cus., dated 13-5-1983- Discrepancy in actual weight of imported melting scrap and manifested quantity- Rejection of refund claims by Assistant Collector of Customs, BhavnagarAnalysis:The case involved three appeals by M/s. Panchmahal Steel Limited against the Order-in-original passed by the Assistant Collector of Customs, Bhavnagar, regarding the exemption from import duty for using imported melting scrap in the manufacture of steel products. The exemption required an 'end-use' certificate to be produced. The appellants received three consignments of melting scrap in bulk cargo through the Port of Bhavnagar, but the actual weight was found to be less than the manifested quantity based on weighment slips certified by an independent surveyor.The appellants argued that the manifested weight was approximate, based on draught survey, while the weight for which the 'end-use' certificate was furnished was based on actual weighment. They contended that there was no evidence of illegal disposal of the differential quantity and that the demands for duty were not proper. They also cited a letter from Bhavnagar Customs accepting weighment certificates by port authorities for cancellation of End Use Bond.During the hearing, it was highlighted that similar appeals had been allowed by Collector (Appeals), Ahmedabad. The main issue was whether the manifested weight or the actual weight should be considered for discharging the 'end-use' bond for claiming the exemption. The judgment referred to a letter from the Assistant Collector, Customs, Bhavnagar, accepting physical weighments for cancellation of End Use Bonds.The judgment concluded that since there was no weigh-bridge at Bhavnagar port initially, the actual weight supported by independent surveyor's weighment slips should be accepted. The Regional Iron & Steel Controller certified the material quantity received by the appellants, and there was no allegation of misappropriation. The port authorities accepted the surveyor's report, and in the absence of a weigh-bridge at the port, the actual weighment was deemed accurate. Thus, the refund claims were allowed, and the appeals were upheld.