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2018 (5) TMI 519
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....8 72099000 721123 72119090 (a) 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 se....
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....he conditions mentioned in Para 1 hereinabove. Aggrieved 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 Metallu....
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....an be ascertained from National Institute of Secondary Steel (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 wher....
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....ame falls under the category of Heavy Melting Scrap. The 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 no....
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....the assessment of HMS Scrap mixed with re-rollable/ Serviceable 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 refer....
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....y. Admittedly, no market enquiry has been conducted but report has been obtained 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 ....
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....The appeals disposed of in the above terms. (Order pronounced in the court on) Ashok Jindal Member (Judicial) 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 De....
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....e than 600 mm (Sec. & def) 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 materi....
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..../06/2017 issued by NISST. The said clarification dated 22/06/2017 1 find that the same refers to the clarification issued by NISST on 24/03/2017 and also reaffirming their findings that the goods in question were melting scrap as opined by them in report dated 14/03/2017. Therefore, I do not find that the contents of said clarification dated 22/06/2017 issued by NISST are having any developments after the said order dated 12/04/2017 has been passed. Further the said report dated 18/04/2017 has also been dealt with in para 24 of said order dated 12/04/2017 and consequence to be followed on receipt of said report dated 18/04/2017 have been ordered in the said paragraph. Therefore, I do not find that any purpose would be served by remanding the matter back to the original authority as opined by Member (Technical). I therefore, do not agree with Member (Technical). I further find that the terms and conditions of para 10 passed by Member (Judicial) are well reasoned and therefore, I support the order passed by the Member (Judicial). The matter is referred back to Division Bench with this opinion. (Anil G. Shakkarwar) Member (Technical) MAJORITY ORDER In view of the majority ....
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....esent consignment all the goods are in mix sizes above 600mm & below 600 mm. According to visual examination no coils were found as per above definitions of strips. Hence material contained no strips but remnants, No visiral Conte K. VARUN CHANDOK Chartered Engineer (M-133225-1) The Institution of Fanina are fami Вали Superintendent (SIB) Customs Commissioinerate 0.1 ICD, GRFL. Sahnawal, 1.UDHIANA 641G пондер ме Document 2 ON CHANDOK & ASSOCIATES ague Nai Urban Estate ugri Phase-li, 1410 3 (INDIA) Telefax 0161-2813702 45-2778 e-mail [email protected] Er. Varun Chanc B... MIE Er. R.P. Topkhanew Metallurgical Engin Chartered Engineer 1-133228-1 The insillution at Engineers (India), Ka Approved Valuer: F-12641 Institution of Valuers, Demi -4- physical defects on goods were noted. According to above standards, definitions, visual examination etc. these goods do not fall under criteria laid by Ministry of Steel (MOS) for second & defective products. Other characteristics Tor identification criteria for considering goods defective, report from NISST, Man....
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....aterial is not covered in ISRI busheling. As this opinion is second spin on it requires exhaustive & detailed study of material which takes time. Though we have given all definitions of serviceable prime products sold in market as per acceptable specification/standards such as BIS, MOS etc. for consideration of authorities. S: The commercia marketability of the goods exceeding sizes 2 feet by 5 feat. if Teuno during segregation depends upon its marke: demand and type of end use. Though it is not authentic to say that these goods are purposely serviceable, but his may be material so din market subjected to market requirements & waste. oning industry. To tur tents of the opinion do not release the buyer or seller from their connectal opligations This opiniun is issued for the goods as produced in cardition for examination and is given in good faith without accepting any lega and nancial ability. This is our personal opinion for the goods shown to us taking into consideration the physical examination in absence of any test report. with the similar goons available ine matin gathered from dealers or some trade and t....