TaxTMI 
TaxTMI 
2018 (2) TMI 961
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....Products confirming to grade designation CRI, CE2, CR3, CR4, CR5 18^th December, 2016 (b) For products other Than (a) above 18^th March, 2016 Accordingly, the seized goods mentioned in Table 1 above i.e. CR sheets/strips/slits width less/more than 600mm, coated/ plated sheets/strips/slits which were serviceable and HMS are released on the following conditions under Section 110A of the Customs Act, 1962:- (i) The goods shall be assessed to duty provisionally on the basis of the declared invoice value, purely for the purpose of provisional release of goods only, without any prejudice to the right of the department to issue the show cause notice on any aspect including valuation. (ii) The goods mentioned in Table-1 excluding coated/ plated sheets/strips/slits and HMS shall be mutilated so as to render them scrap in such a manner so that they cannot be used as such except for melting in accordance with definition of scrap in Section Note 8(a) of the Customs Tariff and subject to Para 24 of the order. (iii) The importer shall furnish a bond equal to the seizure value i.e. 27,26,429/- of the seized goods to bind himself to pay in case of demand the ....
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.... from the said orders, the appellant is before us. 4. Ld. Counsel for the appellant submits that the appellant has declared the grade of the scrap as ISRI 207 which reads as under:- "207 : Busheling Clean steel scrap, maximum size 2 feet by 5 feet, including new factory busheling, (for example, sheet clippings, stampings, etc.). May not include, old auto body and fender stock. Free of metal coated, limed, vitreous enameled, and electrical sheet containing over 0.5 percent silicon." He further submitted that for the purpose of classification of the material as scrap, the Id. Commissioner has issued Standing Order No.02/Cus/2013 dated 30.05.2013 as guidelines wherein vide sub-clause (i), it is mandatory that the importer shall at the time of filing of Bill of Entry declare the ISRI grade of the scrap. The appellant has complied with the said directions as laid-down in the standing order. As per the internationally accepted code of ferrous scrap (ISRI), however, the said goods were detained, wherein examination was conducted with the help of the Chartered Engineer Shri Anil Soni. Shri Anil Soni, who is not the Metallurgical Engineer, vide report dated 17.02.2017 in respect....
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....teel (NISST), Mandi Gobindgarh. It is his submission that despite the directions of the Chartered Engineer to obtain the market opinion, no market enquiry was conducted. However, the request of the appellant for getting the goods examined by NISST Mandi Gobindgarh was accepted and after physical examination of the material, vide his report dated 14.03.2017 NISST confirmed that the material imported by the appellant is scrap as per ISRI 207, particularly Busheling Scrap. The said report has been given after considering all the factors of secondary steel, ISRI specification and explanation as per Chapter XV 8(a) of the Customs Tariff. It is his submission that the said institute (NISST) is BIS recognised laboratory. He further submits that despite the fact that the goods were examined by a Government Laboratory under the Ministry of Steels and duly approved by BIS, the goods were not released and the order directing provisional release was passed with the condition of mutilation of the same in order to render them scrap. The said orders were passed only after the intervention of the Hon'ble High Court in CWP No.4879 of 2017 wherein the Hon'ble High Court directed the criteria of muti....
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.... recommendation of the said chartered engineer for obtaining the market opinion has not been accepted. He further submits that adjudicating authority has erred in relying on Para 3 of the Import control order 2012 as the same is applicable only on importation of sheets/coils in standard length. The material imported by the appellant being scrap in the form of end sheet cuttings and waste of sheets, the same cannot be held to be covered under the said Import Control order of 2012. Therefore, the condition of mutilation cannot be imposed on the appellant for the purpose of release of the goods. He further submits that Chartered Engineer in its reports as well as the NISST vide its report dated 14.03.2017 have specifically held that the material imported by the appellant comprises of different sizes as per the ISRI grade. He submits that once the goods fall under the specification as laid down under ISRI, the question of reclassifying the same under the Chapter Heading of Sheets cannot be accepted, more-so scrap is always generated out of the prime, used and other material, which is waste and discard of prime material and does not have a specific name. He further submits that on the o....
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....iceable Material. Relevant portion of the said Standing order is extracted below:- F.No. VIII-HQ/U/STEEL PIPES.2001/5848-60 DATED 30.05.2013 STANDING ORDER NO.02/CUS/2013 Sub : Assessment of HMS Scrap Mixed with Re Rollable/ Serviceable Material. In suppression of Standing Order No.2-Cus/2002 Dated 21.03.2002 issued in F. No.VII-48(106) T/VAL/Steel Pipes/2001, following practice is to be adopted with immediate effect for assessment of imported ferrous scrap. (i) An importer of ferrous scrap must declare, in the relevant Bill of Entry, the grade of scrap imported in terms of internationally accepted ISRI Code for ferrous scrap. (ii) The classification of ferrous scrap under various ISRI code shall be guided by ISRI Rules of "General Information" applicable to the ferrous scrap, subject to the condition that : (a) The "negligible amount" of metallic material referred to in Rule (b) of General Information shall be deemed to be upto 2% of the total weight of the imported consignment, and (b) a minor extent" of variation in size limitation applicable to any ISRI Code Grade, also referred to in Rule (b), shall mean a variation to 10%." A....
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....ined from NISST, Mandi Gobindgarh. As per the said report, it is concluded that the material in question is a type of melting scrap and cannot be termed as prime material or secondary defective input material for further commercial productions. The same has been recognised by BIS vide their letter dated 28.10.2016. The report is extracted as under:- The Revenue, on the other hand, has relied on the letter issued by NISST dated 24.03.2017 to say that, in case somebody ventures into waste utilization other than re-melting, we cannot comment on those. In fact, the NISST has given a categorical finding that such type of scrap material cannot be utilised further manufacturing in any manufacturing process but the Revenue has relied that this waste may be utilised other than re-melting, therefore, they ordered for mutilation of the same. There may be chances that after mutilation also some pieces of scrap can be re-used or used other than re-melting. It is not the tenor of the Standing Instruction dated 13.05.2013. It is required to be seen with a broader perspective whether the goods can be re-used or not. As the Chartered Engineer Shri Varun Chandok with the Metallurgical Engineer ha....
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....t on) PER: DEVENDER SINGH 10. After going through the draft order of learned Brother Member (J), I record a separate order. 11. I find that the appellant imported Heavy Melting Scrap (HMS), which on verification was found to be contain M.S. Sheet, cutting, strips/slit (Cr) mix coated/plated width less than 600 mm, M.S. Sheet, cutting, strips/slit width more than 600 mm but of serviceable nature. It is pertinent to mention that the appellant in his statement dated 10.2.2017 recorded under Section 108 of the Customs Act, 1962 has admitted that certain CR strips/sheet/slit covered under Bill of Entry No.8155288 dated 11.1.2017 having width more than 600 mm can be used as such other than melting scrap. The impugned goods were examined by empanelled Chartered Engineers, who certified that only 50% approximately was melting scrap. Summaries of these reports are tabulated below: (i) For B/E 8155288 dill. 1.2017, the summary of the reports given by the empanelled Chartered Engineers are tabulated below. Sr.No. Name of Chartered Engineer Sh. Date Report Description of goods actually found Appx. Quantity MT 1 Rajesh John 02.02.17 ....
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.... 15.75 MS sheet cutting/strips/slits (CR) mixed coated/plated width more than 600 mm (Sec. & def) 72 HMS of MS sheet curtns 72.00 12. Opinion of NISST was obtained on recommendation of Shri Varun Chandok, one of the Chartered Engineers. I find that the report of NISST dated 24.3.2017 was not categorical that the material in question cannot be utilized other than by re-melting. Subsequent clarification dated 22.6.2017, which was obtained by the importer after passing of the order of the Commissioner (Appeals), merely mentions that the material cannot be used as such for any standard manufacturing and fabrication process. However, clarification dated 22.6.2017 has not been examined by the adjudicating authority and the first appellate authority as it was obtained by importer subsequently. The NISST has not tested the goods for carbon content of the impugned material. 131 I find that the goods were also tested for carbon content as per the directions of the adjudicating authority in his order dt.12.4.2017. On testing of the goods at the Research and Development in Bicycles and Sewing Machines (RDBSM) laboratory, Ludhiana, the material in que....
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.... figures denoting length (mm) wath (mm) x thickness (mm) of the plates by Sheets shall be designated as ISSH followed by figures denoting length (mm width (mm) x thickness (mm) of the sheet. Coby enclosed as Annex 3 along with sizes). Definitions as per Glossary of MOS; PLATE Thick for finished product of width: +500mm & Thickness: (+)5mm whic ore supplied in cut/straight length. Plates are normally produced/supplied in a hat rolled condition with or without specific heat treatments. SHEET: Thin flat finished steel products, Width: +500MM, Thickness: (-) 5mm, Supplied in cut/straight length. Sheets are produced/supplied in hot rolled/col rolled/cooted condition and accordingly, known as Hot Rolled (HR) Sheets or Cu Rolled (CR) Sheets or Coated Sheets. STRIPS Hot/cold/coated Flot rolled products, supplied in regularly wound coils o super imposed loyers. Accordingly, known as HR Strips or CR Strips or Coated Strips Depending upon width, strips are sub-classified as wide strip or narrow strip as under: WIDE STRIPS Strips of widths #00mm & above. Also known as Coils in India and Wide Coils in Europe etc. Accordingly, the terms HR Co....
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....y standard industrial use due to non-standard shape because of tting etc However even then we could not rule out any possible use of this terial as this material is available in market but with scerp dealers and not win some goods dealer. For exact reuse and extent of usage an independent market enquiry can be conducted at your end from similar trade dealers/Further to certain reuse an opinion from NISST, Mandi Gobindgarh can also be fol. Contd...1/ Chartered Engineer (M-133228-1) SANDOK The Institution of Engineers (India) 8. Gokhete Rood RPS Toplemany sught CRP Topkhawn! Balong Superintendent (SHB) Customs Commissionerate ICD, GRFL. Sahnawal, LUDHIANA 79 Document 3 JN CHANDOK & ASSOCIATES menu Uber Estate Dugi sell MAY "G 0161-2819702 45-7 man varunze/@yahoo. cofr Br. Varun Chan D. MIE Er. R.P. Topkhanew Metallurgical Engi Chartered Engineer -133228-1 The institutior of Engineers (india), X Approved Valuer F-12041 Institution of Valuers, Gelni gnment was exarained in presence of Silb officials. Since the consignment produced is in mix condition, undersigned are unable to opine neither f....
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....al in question was of m tega hages & es, it appears to be rein its of sheets such as ang cutting ar impings etc It apparently does not fall in the category of any of th spe fied stendord finished good material like sheet or striper or secondar defected pieces of these standard products as per Ministry of steel, tho definitions of flot procusts are as given below (Copy of document enclosed) PLATE Thick les prishes proof with a Thuckness. Som which gre traigne engch, totes are only produce soppen mest rowe condition with or without erge heat treatments SHEET Tn pat ained steel produers Wire FM Thickness (13 autores leegth sheets are pro und edgy known as Hot Hold Autow/CR) Sees or cod NIT STRIPS HO/coated flot produ mever Accordingly, known as Me Stras av CR Strips outed Stows Deendayo strips are sub-classified as wide stify or narrow strip as under WIDE STRIPS Strips of width sove & above aise irown Case and wide Europe acedingly the terme MF Coils/Wide Calls or C Case Co common pred NA STRIPS Sins of widths less thon 600e As the inspected matena does not tal in any of the above category the ....