TaxTMI 
TaxTMI 
2011 (3) TMI 832
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....mporters requested for delivery of 80% of the goods and remaining 20% of the goods to be bonded at Customs Warehouse at CWC Kalamboli. 75% of the goods were allowed clearance provisionally on payment of duty at the declared value on execution of Test cum PD Bond. 4. Two representative samples drawn from the remaining 25% of the goods were sent for test to the National Metallurgical Laboratory, Chennai. 5. Subsequently, Show Cause Notice was issued to the importers as to why the differential duty of Rs. 22,52,221/- and interest should not be demanded. The matter was adjudicated by the impugned order, and aggrieved by the said order, the importers have preferred this appeal. 6. Shri Amol Ket, Asst. Commissioner, Gr.IV and Shri S.S. Upadhyay, A.O.,Gr. IV, appeared for PH on behalf of Revenue. Shri Girish Jain, Director, M/s. Prabhat Steel Traders Pvt. Ltd., Shri Haresh Menon, CHA and Shri Sujay N. Kantawala, Advocate, appeared for PH on behalf of the Appellants. They have reiterated their arguments and submissions. The advocates for the Appellants have also submitted written brief, and voluminous technical literature and case laws. 7. It is observed that the bo....
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....40 2. 5850 x 1590 x 70 3. 5950 x 1040 x 70 Most of the plates were rusted and pitted. A few plates were found with wide variation in thickness along the length. Many of plates were found with irregular ends. Some of the plates were found to be leading or tailing ends with curves. Some of the plates were found with bends/edge damages etc. Magnitude of surface defects - Significant. Plates of different dimensions were found. Most of the plates were found with irregular end cutting. Gas cutting marks were observed on the end. Three to four pieces of slabs were found in the examined consignment with thickness in the range of 80 mm. On the basis of the above the test report concluded that the goods were secondary/defective/rejected steel plates. 11. The National Metallurgical Laboratory, Chennai, also furnished a Chemical Analysis test report vide NML/MC/02/062/08-09 (Report No. 20062) dtd. 25-5-2009 of the two samples drawn, as follows : "Sample ID %C %Si %Mn %P %S %Cr %Ni %Mo CH-062(a) 0.01 0.01 0.19 0.001 0.004 0.02 0.02 <0.01 CH-062(b) 0.13 0.23 0.95 0.004 0.003 0.65 1.46 0.61 CH-062(a) can be classified as non-alloy Steel and CH....
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....ther, held that only 47.117 MT of imported goods were found as non-alloy Steel Slabs secondary/defective and therefore allowed clearance of the same on payment of appropriate duty. 16. The Adjudicating Authority rejected the transaction value since the remaining 979.349 MT of the imported goods were held to be secondary/defective alloy and non alloy Steel Plates as against declared description of non-alloy Steel Slabs secondary/defective. He re-determined the value of the imported goods at the rate of Euro 423.75 PMT C&F and ordered for recovery of differential duty of Rs. 22,52,521/-. 17. The Adjudicating Authority held that 979.349 MT of the goods is misdeclared w.r.t. their description and value and therefore confiscated the same with the option of Redemption Fine of Rs. 2 crores and imposed Penalty of Rs. 15 lakhs on the importer. 18. The Appellants here, have contended that the Customs Officers and National Metallurgical Laboratory, Chennai, appear to be of the view that Slabs should necessarily be above 80 mm. They submitted that the Examining Officer has mentioned in the examination report that "Slab is semi-finished goods having thickness 180 mm or more" a....
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....er in the examination report on the Bill of Entry. As per National Metallurgical Laboratory, 80 mm thickness pieces have been classified as Slabs. However, Appellants have convincingly established that there are slim Slabs, as slim as 35 mm thickness. Ispat Industries are also manufacturing Slabs of 55 mm thickness within India. 21. It is observed that it is not really very significant whether the impugned goods are Slabs or Plates. The allegation of the Department in the Show Cause Notice was that the impugned goods were Plates which required valid licence for importation. However, the Adjudicating Authority has rightly held that the impugned goods, even if Plates are freely importable. Therefore there is no licence violation, whether the impugned goods are Slabs or Plates. The significance therefore lies on whether the goods are "misdeclared" as Plates and if so, whether they are liable for confiscation on the ground of misdeclaration. The evidences to establish that the impugned goods are Plates is not convincing. On the contrary, the evidences indicate that the impugned goods to be Slabs only. The misdeclaration in description, if any, also does not appear to be grave. Th....
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....me material cannot be taken as a basis for second/defective material. [METEC Asia Pvt. Ltd. case [2001(127) E.L.T. 169 (Tri-Mum.), Palco Metals Limited case, [2009 (234) E.L.T. 472 (Tri-Ahm.)], GKN Sinter Metals Ltd. case [2008 (232) E.L.T. 692 (Tri-Mum.)]. The case laws in the cases of Nexus Translam Industries case [2005 (182) E.L.T. 510 (Tri. - Chennai)], Permanent Magnet Limited case [2006 (200) E.L.T. 611 (Tri. - Mumbai)], Eicher Tractor Limited case [2000 (122) E.L.T. 321 (S.C.)], National Lamination Industries case [2006 (206) E.L.T. 515 (Tri. - Mumbai)], Prodelin India Pvt. Ltd. case [2006 (202) E.L.T. 13 (S.C.)] etc. are also pertinent. 24. The Hon'ble Supreme Court in Prodelin India Pvt. Ltd. case, 2006 (202) E.L.T. 13 (S.C.), has held that onus to prove that declared price did not reflect true transaction value is always on department. Department is bound to accept the transaction value, entered between two parties, in absence of any evidence that identical or similar goods are imported by other importers at higher price. The Hon'ble Supreme Court in Eicher Tractors Pvt. Ltd. case, 2000 (122) E.L.T. 321 (S.C.), held that the value can be redetermined only when and ....
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....portioning of the test result of one piece to the entire import consignment. They also contested confiscation of the goods on such flimsy grounds and imposition of huge Redemption Fine and Penalty. The arguments of the Appellants are pertinent and have a bearing on confiscation of the goods as well as on the quantum of redemption fine and penalty. From the facts and circumstances of the instant case, it appears that though the confiscation of alloy steel may be technically legal, the quantum of Redemption Fine and Penalty in the impugned Order-in-Original is too harsh. 27. It is observed that the Department's case is that the description of the goods have been misdeclared and therefore the transaction value is rejected and the assessable value redetermined resulting in a liability of differential duty of Rs. 22, 52,221/-. The Adjudicating Authority has held that there is no restriction on the import of the goods and therefore the goods are not liable for confiscation on the said ground. However, the Adjudicating Authority has confiscated the goods on the ground of misdeclaration w.r.t. description (and consequential value) and imposed huge redemption fine and penalty, which i....