1995 (3) TMI 217 - AT - Customs

Tribunal affirms Acrylic waste classification, upholds valuation, and reduces penalties for misdeclaration

GANDHARV TRADING & INVESTMENT PVT. LTD. Versus CC., MADRAS

GANDHARV TRADING & INVESTMENT PVT. LTD. Versus CC., MADRAS - 1995 (78) E.L.T. 276 (Tribunal) Issues: Classification of Acrylic waste/Synthetic waste for countervailing duty, validity of confiscation and penalty imposed by the Department, assessment of redemption fine and penalty.Classification for Countervailing Duty:The main issue in the appeals was whether Acrylic waste/Synthetic waste should be classified under Tariff Item 18-IV or T.I. 68 of the Central Excise Tariff Act for countervailing duty. The appellants argued that the items were wrongly classified by the Department as Acrylic Fibre instead of waste. They presented test reports showing the items were a mixture of fibers and strands, not pure fiber. The appellants cited various legal precedents to support their contention, including CEGAT and Supreme Court judgments. The Tribunal, after considering the submissions, held that the items should be classified under Item 18 (iv) for countervailing duty based on the non-cellulosic nature of the waste.Valuation and Confiscation:Regarding valuation, the Department had discarded the invoice value, but the Tribunal found no justification for doing so as there was no evidence of lower prices. The Tribunal upheld the invoice value in all cases. However, the Department was deemed justified in ordering confiscation and imposing penalties due to misdeclaration of goods under the Customs Act. The Tribunal acknowledged the need to reduce the quantum of redemption fine and penalty, lowering the redemption fine to 5% of the C.I.F. value and reducing the penalties significantly in each case based on the circumstances.Remand for Reconsideration:The Department argued for remanding the issue of classification and penalty for reconsideration by the Assistant Collector, citing a High Court directive in a similar case. The appellants countered by referencing a case where the majority opinion held that Synthetic waste should be classified under Item 68. However, the Tribunal, after careful consideration of the arguments and legal precedents, maintained its decision to classify the waste under Item 18 (iv) and reduce the redemption fine and penalties based on the specific circumstances of each case.In conclusion, the Tribunal disposed of all appeals by affirming the classification of the waste for countervailing duty, accepting the invoice value, justifying the confiscation and penalties, and reducing the redemption fine and penalties in consideration of the facts and circumstances of each case.