TaxTMI 
TaxTMI 
2025 (4) TMI 1414
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....ssessed classifying the same under Customs Tariff Heading (CTH) 7204 49 00; Department, on examination of the goods, proposed to enhance the value of the goods from 400 USD per metric ton to 500 USD per metric ton based on the alleged contemporary imports of the identical goods allegedly taken from Directorate of Valuation Website; the customs duty was already paid by the Appellant; Revenue also alleged that the imported goods prima facie did not appear to be scarp of silicon steel; An independent Chartered Engineer appointed by Department, certified that the imported goods were obtained from the old and used rejected/damaged transformers and cannot be reused directly in the present situation and therefore, the imported goods are Silicon Steel Scrap; even the shed officer on re-examination of the goods found that the goods are of varied length and some of the sheets were found to be curved, zig-zagged or even generally de-shaped, rusted and sides of the sheets were also found to be crushed and cramped; the Appellant sought permission for mutilation of scrap, which was rejected. 2.1. A show cause notice dated 21.01.2015, was issued, seeking to reclassify the goods under CTH 7225 ....
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.... purposes, they are to be treated as scrap under CTH 7204; silicon steel strips dismantled from transformers are scrap and not defective goods; expert opinion given by the CE regarding the classification issue is admissible evidence and even assuming, without admitting, that the classification under CTH 7204 is correct, it will not automatically follow that they will be classifiable under CTH 7225 as Silicon Steel Strips. He relies on the following cases: • Naveen lmpex Ghaziabad 2018 (1) TMI 1468 - CESTAT ALLAHABAD • Sujana Steel Ltd, Hyderabad 2000 (115) ELT 539 (Tri.) • Patiala Castings (P) Ltd 2003 (156) ELT 458 (P & H) • Sunshine Artifacts, 2012 (280) ELT 156 (Tri. Bom.) • M/s. Ansun System Consulting (P) Ltd 2005 (179) ELT 511 (Tri. -Del.) • Kishore Kr. Agarwal 2010 (252) ELT 138 (Tri. Kol.) • SPS Metal Cast & Oils Ltd 2004 (163) ELT 265(Tri. Kol) • Shree Ram Urban Infrastructures Ltd 2009 (246) ELT 718 • Malu Electrodes Pvt Ltd 2018 (364) ELT 1023 (Tri.-Mum) • Hinduja Foundries Ltd 2013 (288) ELT 571 (Tri - Chennai) • LML Ltd 1997 (94....
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....y valued at 650$ PMT; sole basis for rejection of the declared value of the disputed goods is the alleged mis-declaration of the goods; however, as per above submissions, the appellant correctly classified the impugned goods, the very basis for rejection of declared value of the goods is not present. He submits that the transaction value in the present case is not liable to be rejected as it is in consonance with the contract; each transaction has to be assessed independently; Section 14 of the Customs Act clearly states that value should be the price actually paid or payable; the price actually paid has been declared, and therefore, rejection of the same, and re-determination is completely unwarranted and bad in law; Rule 3(2) of the Valuation Rules indicates that the Department is bound to accept the transaction value at all times except when the circumstances mentioned in the proviso to Rule 3(2) exist as held in M/s Sanjivani Non-Ferrous Trading Pvt. Ltd., 2018 (12) TMI 738 (SC) and Eicher Tractors Ltd. 2000 (122) ELT 321 (SC); the onus is on the Department to prove that goods have been undervalued as held in Prodelin India (P) Ltd., 2006 (202) ELT 13 (SC). He submits that thou....
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....side; in view of the Ministry of Steel letter F. No. 1(8)/2012-TVV dated 20.02.2014, goods are in the nature of Scrap and not second-hand/defective/old and used CRGO Sheets and therefore not covered by the Board Instruction; no BIS Certification is required for the goods. He relies specifically on M/s. Ansun System Consulting (P) Ltd. (supra); Kishore Kr Agarwal (supra) and SPS Metal Cast & Oil Ltd. (supra) wherein, it was held that the materials obtained from dismantled transformers cannot be treated as defective CRGO sheets; consequently, the import restrictions as per Quality Control Order and the Amendment Order would not apply to the impugned goods. Learned counsel submits that as per Para 2.17 of the FTP 2009-14, authorisation is needed if the goods imported are in the nature of "Second Hand Goods other than Capital Goods" and not in case of scrap generated out of used goods. 9. Learned counsel submits that the provisions of Section 111(d) are not attracted in this case as there has been no violation of the Customs Act, Tariff Act, FTP, ITC(HS) or any other law in force; It is thus, Section 111(m) is also not attracted as the imported goods do correspond in value or any ot....
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....lants is classifiable under CTH 72044900 as declared by the appellants are under CTH 72251900 as arrived at by the impugned order and as to whether the appellants require import authorization from DGFT in terms of Para 2.17. (ii) the Revenue was correct in re-determining the value of impugned goods from 400$ PMT to 650$ PMT. (iii) the impugned goods are rendered liable for confiscation and the appellant are rendered liable for penalty. 13. We find that the appellants imported steel scraps (silicon) and filed a bill of entry at a declared classification under CTH 72044900 and value of 400 $ PMT; on first examination, Revenue proposed classification under CTH 72251900 and value at 500 $ PMT. A Chartered Engineer was appointed to ascertain the condition and classification of goods. The Chartered Engineer vide Certificate, dated 15.09.2014, while indicating that the price could be 500$ PMT, commented on the condition of the cargo as follows: • Once the transformers outlive their specified life w.r.t their working conditions, their cores made up of silicon steel strips become weak to produce the desired results of power transmission or when they got dam....
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....p, wear and other reasons. The original authority finds that there is variation between the Chartered Engineer certificate and the re-examination report by customs officers; Chapter Head 72.04 excludes articles which can be used for their former purposes or can be adopted for other uses with or without repair or renovation. We find that it would be beneficial to have a look at the relevant statutory position on classification of impugned goods. 13.3. Entries related to CTH 7204 as per CTA,1975, are follows. Tariff Item Description of goods Unit Rate of duty 7204 Ferrous waste and scrap; re-melting scrap ingots of iron or steel 7204 10 00 - Waste and scrap of cast iron Kg 10% - Waste and scrap of alloy steel 7204 21 -- Of stainless steel 7204 21 10 --- Empty or discharged cartridges of all bores and sizes Kg 10% 7204 21 90 --- Other Kg 10% 7204 29 -- Other 10% ....
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....Notes indicate that the heading 72.04 excludes articles which with or without repair or renovation, can be re-used for their former purposes or can be adapted for other uses; it also excludes articles which can be refashioned into other goods without first being recovered as metal. In the impugned case, the imported goods were intended to be used for melting purposes only as is evident from the request of the appellant for mutilation before release. It has been held in Naveen lmpex v. Commissioner of Customs, Ghaziabad, 2018 (1) TMI 1468 - CESTAT Allahabad that 5. We have gone through the impugned orders as also the examination report. Admittedly the examination report has found the said goods to be defective iron plates of square or rectangular size with cut edges and of various thickness and lengths. In such a scenario the goods cannot be held to be prime or defective iron sheets and in the light of such variations in the sizes of the goods along with the fact that their edges were cut and worn out and the fact that they were in not serviceable for the purpose of sheets, it has to be held that the same are metal waste and scrap, which are admittedly not usable as such be....
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....issioner Customs, Amritsar that M/s. Datt Multi Metals Private Limited and M/s. Patiala Castings Pvt Ltd. filled Bills of Entry at CFS (PSWC) Ludhiana for clearance of containers of heavy melting scrap. However, on physical examination of the goods, old and used steel pipes of varying lengths from 10 to 18" (approximately having diameter 6" to 12" and thickness of about were found instead of melting scrap. It is understood that such pipes have varied applications in the processing industry viz. High-pressure application, chemical industry, Textile industry machine tools, manufacturing etc. and the goods under import can be used as such. Whereas the goods imported appear to be new material for re-melting purposes, in their industrial furnace, as a raw material for manufacturing of MS ingots and large portion of such consignments are still in serviceable condition. The Board has earlier examined the issue of clearance of Steel scrap which also contained serviceable material and issued instructions that if serviceable goods are noticed, they should be mutilated to such an extent to become steel scrap for availing the benefit of end use notification and the consignments are assessed as....
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.... cores of transformers. Therefore, this specific use of goods, for the same purposes which they were used earlier, is completely ruled out. The Appellate Authority has also not disputed this aspect of the CE report with regard to re-use of the goods as cores. Re-examination Report by shed officer indicates that the goods are of varied length and some of the sheets were found to be curved or even generally, de-shaped and rusted. We find that such steel (used to make the core of transformers) cannot be re-used in a transformer core or for any other purpose. We also find force in the argument of the appellant that expert opinion given by the CE regarding the classification issue is admissible evidence. It is also on record that an identical consignment imported by the Appellant was successfully cleared vide Bill of Entry No. 6162092 dated 18.07.2014 were sold for melting purposes only. Though, the principle of estoppel is not applicable in taxation matters, department cannot take a different stand in respect of the same appellant under identical set of facts. 18. We find that Appellate authority's apprehension regarding the possibility of reuse after processing, repair and re-use i....
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....tion 1(iii) of Rule 12, cannot be a reason itself to reject the transaction value. We find that in the absence of evidence like related party transaction, flow back of differential amount to the foreign exporter etc., to establish undervaluation of imports, transaction value has to be accepted as a rule. We find that Hon'ble Apex Court in the case of Aggarwal Industries Ltd.(supra), held as follows. 11. On a plain reading of Sections 14(1) and 14(1A), it is clear that the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in Section 14(1) of the Act. Section 14(1) is a deeming provision as it talks of deemed value of such goods. The determination of such price has to be in accordance with the relevant rules and subject to the provisions of Section 14(1) of the Act. Conjointly read, both Section 14(1) of the Act and Rule 4 of CVR, 1988 provide that in the absence of any of the special circumstances indicated in Section 14(1) of the Act and particularized in Rule 4(2) of CVR 1988, the price paid or payable by the importer to the vendor, in the ordinary course of international trade and commerce, shall be taken to be the transaction valu....
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.... Act, customs duty is chargeable on goods. According to Section 14(1), the assessment of duty is to be made on the value of the goods. The value may be fixed by the Central Government under Section 14(2). Where the value is not so fixed it has to be decided under Section 14(1). The value, according to Section 14(1), shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale, for delivery at the time and place and importation in the course of international trade. The word "ordinarily" implies the exclusion of special circumstances. This position is clarified by the last sentence in Section 14(1) which describes an "ordinary" sale as one where the seller or the buyer have no interest in the business of each other and price is the sole consideration for the sale or offer for sale. Therefore, when the above conditions regarding time, place and absence of special circumstances stand fulfilled, the price of imported goods shall be decided under Section 14(1A) read with the Rules framed thereunder. The said Rules are CVR, 1988. It was further held that in cases where the circumstances mentioned in Rules 4(2)(c) to (h) are not applicable, the Depart....