1991 (11) TMI 141 - AT - Customs

Tribunal rejects appeal on Ferrous Melting scrap classification under Customs Tariff Heading

PANCHMAHAL STEEL LIMITED Versus COLLECTOR OF CUSTOMS

The Tribunal dismissed the appeal regarding the classification of imported Ferrous Melting scrap under Customs Tariff Heading 73.03/05. The decision was ... Remission of duty Issues:1. Classification of imported Ferrous Melting scrap under Customs Tariff Heading 73.03/05.2. Discrepancy in quantity of imported scrap as per draft survey report and end-use certificate.3. Consideration of weighment facilities and actual weight for determining imported quantity.4. Interpretation of Section 23 of the Customs Act for remission of duty on lost or destroyed goods.Analysis:1. The appeal involved the classification of Ferrous Melting scrap imported for use in an electric furnace under Customs Tariff Heading 73.03/05. The rate of duty was nil subject to conditions specified in Notifications No. 151/Cus., dated 15-7-1977 and No. 107/79 dated 10-5-1979. The dispute arose regarding the correct classification and duty payable based on the quantity used in the electric arc furnace.2. A discrepancy was noted between the quantity of scrap mentioned in the draft survey report and the end-use certificate. The party contended that the entire quantity received had been utilized in their electric arc furnace for manufacturing steel ingots. However, the Assistant Collector and the Collector (Appeals) relied on the draft survey report to confirm a demand for the deficit quantity of scrap. The party sought to challenge this decision based on previous orders favoring a different approach.3. The argument revolved around the availability of weighment facilities in the port and the reliability of the draft survey report in determining the actual imported quantity. The party emphasized the need for actual weighment by independent surveyors or government agencies due to the approximate nature of the draft survey weight. The Department, on the other hand, stressed the requirement for establishing loss or destruction prior to clearance for claiming remission of duty under Section 23 of the Customs Act.4. Section 23 of the Customs Act was analyzed concerning the remission of duty on lost or destroyed goods. The Tribunal considered the lack of weighment facilities at certain ports and the challenges faced by traders in arranging weighment under Customs supervision. The decision highlighted the acceptance of weighment reports by recognized surveyors as proof of actual quantity in cases of shortages, emphasizing the need for evidence prior to clearance for remission.5. Ultimately, the Tribunal dismissed the appeal, upholding the decision based on the draft survey report and the absence of weighment evidence by recognized agencies or surveyors either at the port or post-clearance. The delay in filing the certificate by the Iron & Steel Control Authorities and the lack of specific information in the certificate further weakened the party's argument. The Tribunal concluded that there was no justification to remand the matter for further consideration based on the evidence presented.This detailed analysis of the judgment addresses the key issues surrounding the classification of imported scrap, discrepancies in quantity, the relevance of weighment facilities, and the interpretation of Section 23 of the Customs Act for duty remission.