TaxTMI 
TaxTMI 
2026 (3) TMI 445
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.... the officers of Shed on 13.08.2013 it was found that all 8x20 containers contained old and used defective pipes having different length and diameter; weight was marginally high at 215.970 MT. The services of Shri Varun Chandok, a chartered Engineer, were commissioned to inspect the cargo. Vide his report, dated 19.08.2013, the chartered Engineer opined that: * The goods comprised mainly of Old & Used pipe cuttings having thickness of approx. 6mm and diameter of approx. 3", 4" and of varying lengths approx. 14 feet to 17 feet. * The said pipes have been dismantled from a place of working and flame cut in assorted lengths. * The said pipes are usually discarded for certain safety measures and are unfit for original use. * The said pipes are below standard lengths and the marketability depends upon market requirements. 2.1. On completion of examination of the consignment in question, it appeared to the Revenue that the consignments contained old and used pipes, re-rollable material and Heavy Melting Scrap (HMS); import of old and used pipes is prohibited as per Para 2.17 of Foreign Trade Policy and thus, part of the material i.e. old and used pi....
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.... and thus, rendered definitely not usable for its original purpose; department has erred by prioritizing a visual inspection over a statutory expert certificate; pre-Inspection Certificate cannot be brushed aside unless the Department provides technical proof that the flame-cut segments could be refurbished. 4. Learned Counsel submits that the Appellant declared the goods exactly as described in the commercial invoice and the Pre-Inspection Certificate; a difference in interpretation regarding the "degree of wear" or "method of cutting" does not constitute a fraudulent mis-declaration; Appellant's willingness to mutilate the goods, as per Section 24 of the Customs Act, 1962, proves a lack of mens rea. He submits that department arbitrarily rejected the transaction value of US$ 360 PMT without following the Customs Valuation Rules; department did not produce any evidence of contemporaneous imports of similar "old and used pipes" at a higher value; the price paid was a fair market price for melting scrap; enhancement of value, on a subjective reclassification as "pipes", which are non-functional, is a violation of the "Transaction Value" and Rule 3 of the Customs Valuation Rules. ....
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....hat * Chapter Note 8(a) of Chapter 72 defines waste and scrap as "metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting up, wear or other reasons; the Appellant failed to discharge the burden to show that the imported goods are scrap; mere assertion that the intent was to melt the goods is irrelevant; test is 'usability', not 'actual use'; when a heading contains both an eo nomine component and a use component, both criteria must be satisfied. * the Appellant declared the goods as per ISRI Code 200-204 but the goods found-pipes of 14-17 feet length, 6mm thickness, 3"-4" diameter-do not conform to the dimensional specifications of ISRI 200-204, which prescribe maximum size of 60"x24" or 36"x18" for charging box size. * Old & Used Pipes are 'second hand goods' and not 'Second Hand Capital Goods'; appellant's submission on Para 2.33 has no application. * redemption fine imposed is not excessive or disproportionate being less than 10% of the value of goods. * Penalty under Section 112(a) is imposable for improper importation. Mens rea is not a pr....
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....ch were imported are "Used Rails" in the guise of "Heavy Material Scrap", the appellant got the said goods examined and it was found that imported goods were in fact Rails and not Heavy Material Scrap as declared by the respondents. On that basis Order-in-Original dated 12-1-2010 was passed by classifying the goods under CTH 7302 and benefit of the aforesaid Notification No. 21/2002-Cus. (Sl. No. 200) was accordingly denied to the respondents. In this Order-in-Original apart from levying the customs duty, fine as well as penalty was also imposed. 4. Aggrieved by the Order-in-Original, the respondents filed appeals before the CESTAT. Vide impugned order dated 11-2-2014, the Tribunal allowed the appeals holding that the goods would be classified under CTH 7204 as these were in fact "Heavy Melting Scrap" and not "Rails". 5. Mr. Ranjit Kumar, Solicitor General, appearing for the appellant has drawn our attention to letter dated 9-12-2009 which was written by the respondents themselves after the goods were examined by the appellant and found to be Rails. In this letter the respondents had requested to condone the misdeclaration of the cut Rails as HMS Scrap and even st....
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....s also no denial to the fact that the aluminium shelves imported cannot be used as any other aluminium structures for any other purpose. 11. From the general rule of interpretation, as discussed above, it is clear that the goods have to be classified to the more appropriate category instead of being covered under the generic category. Chapter 76 is generic to all aluminium structures but chapter 84 is specific for any machine/device of any metal which is used for agriculture purpose. There can be no denial that growing mushroom is an agricultural or horticultural activity and the product imported is crucial and specific for the said activity that the product is specifically designed part of mushroom growing apparatus. 12. No doubt, the goods under Chapter 84 have first to be a machine or mechanical appliance. For the purpose, we foremost look into the dictionary meaning of these words. 13. As per Oxford dictionary machine is a piece of equipment with moving parts that is designed to do a particular job by the use of power (any kind). Similar is the definition in the Cambridge dictionary. The dictionary meaning of mechanical device is that it is an instrum....
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....hallenge is hereby set aside and the appeal is hereby allowed. 12. We find that in the impugned case, the appellants themselves have represented before Member, Customs, CBEC that they do not want any show cause notice and want to clear the goods as per the contentions of the Department. We find that the appellants have accepted the re-classification and re-valuation arrived by the Department. The appellants have also paid the entire duty, penalty and redemption fine and got the goods released. There is nothing on record to show that they have made any protest in this regard. Therefore, we are of the considered opinion that it is not open to the appellants to agitate the matter again after voluntarily accepting the stand of the Department. We find strength from the decision of Hon'ble Supreme Court in a recent case of Amad Noormamad Bakali in Civil Appeal No. 1000 of 2012, pronounced on 23.02.2026. In the instant case, we find that there was no allegation of any coercion, threat or inducement in the acceptance of the liabilities by the appellant. There is nothing on record to show that the appellant has either lodged a protest or retracted his statement of version. Duty along wit....