TaxTMI 
TaxTMI 
2026 (8) TMI 809
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....ier M/s Wadi Al Arab Metal Trading Company, Sharjah, United Arab Emirates, the appellant had filed the Bill of Entry (B/E) No. 2946504 dated 05.05.2013 by classifying the goods under Customs Tariff Item (CTI) 7404 0022 and declared the value of goods as Rs.62,27,262/-. The imported goods were subjected to examination on 'Second Check' basis by the customs department at the port of import. During such examination by the Customs Officers posted at the Docks examination, in the presence of Container Scanning Division (CSD) supervision, it was found that the imported goods actually contain 25% Brass Scrap "Pallu' i.e., 6.61 MTs and 75% secondary defective brass pipes i.e., 19.82 MTs measuring approximately 14 feet of identical size brass pipes which are serviceable in nature. 2.3 Since the description of the goods was mis-declared by the appellant importer, the transaction value was rejected under Rule 12 and the department proposed for re-determination of value of goods on the basis of contemporary value and LME prices under Rule 5 of the Customs Valuation Rules, 2007. It was also proposed to confiscate the goods under Section 111(m) of the Customs Act, 1962 and for imposition of p....
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....ture. Since, this is contrary to the report given by independent chartered engineer, and as per ISRI specification of red brass scrap for which they placed order, no piece is to measure more than 12', they pleaded that there was no mis-declaration on the part of the appellant. 3.3 Learned Counsel further pleaded that since there is no contemporaneous price of similar or identical goods provided by the authorities below and no evidence of any flow back of additional consideration established, the enhancement of value by the department under Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is not sustainable. Learned Counsel in support the above plea, relied upon the judgement of the Hon'ble Supreme Court in the case of S.S. Impex Vs. Commissioner of Customs (Port), Kolkata - 2012 (286) E.L.T. 401 (Tri. - Kolkata). 4. Learned Authorised Representative (AR) reiterated the findings made by the Commissioner of Customs (Appeals) in the impugned order. 5. We have heard both the learned Counsel appearing for the appellant and the learned Authorized Representative of the Department and perused the case records and the synopsis given in the form....
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....m 7404 0022 and revising the classification of 75% secondary defective brass pipes at tariff item 7411 2100 arriving at differential duty liable to be paid as Rs.5,25,460/-. (iv) the appellants, had subsequently paid the differential duty along with fine and penalty, for clearance of the imported goods. 8.2 In terms of the legal provisions under the Customs Act, 1962, determination of the duty liability of imported goods including inter alia in arriving at the appropriate valuation of such imported goods are carried out in accordance with the provisions of Section 14 ibid and Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 framed thereunder. These are extracted for convenience of reference and given below: Section 12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. Section 14. Valuation of goods for purposes of assessment. - (1) For the purp....
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....ported goods; (e) "similar goods" means imported goods - (i) which although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality, reputation and the existence of trade mark; (ii) produced in the country in which the goods being valued were produced; and (iii) produced by the same person who produced the goods being valued, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods; (f) "transaction value" means the value determined in accordance with Rule 4 of these rules. Rule 3. Determination of the method of valuation - For the purpose of these rules, - (i) the value of imported goods shall....
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.... duty payable on the imported goods on the basis of examination of goods which found that there was mis-declaration to the extent of 75% of the goods. Accordingly, the proper officer revised the classification of such goods and rejected the declared transaction value and based on the contemporaneous price of identical goods, had demanded the differential duty of customs in terms of CVR of 2007. 9.2 In terms of the 'The Institute of Scrap Recycling Industries (ISRI)' prescribed Guidelines for Nonferrous Scrap: NF-2023 relied upon by the appellant importer, the composition of 'Ebony' red brass is as follows: It shall consist of red brass scrap, valves, machinery bearings and other machinery parts, including miscellaneous castings made of copper, tin, zinc, and/or lead. Shall be free of semi-red brass castings (78% to 81% copper); railroad car boxes and other similar high-lead alloys; cocks and faucets; closed water .01% Iron .05% meters; gates; pot pieces; ingots and burned brass; aluminum, silicon, and manganese bronzes; iron and non-metallics. No piece to measure more than 12 over any one part or weigh over 100 lbs. However, heavier pieces of any size, length and weight....
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.... as to include a particular size or length of brass tubes alone under the coverage of the phrase 'brass scrap'. Furthermore, there is apparent contradiction in the assessment of the length of the brass tubes by the examining officers of the department and the report given by the chartered engineer. Therefore, part of the imported consignment being as per declaration and rest of the same categorized as other than 'brass scrap' by the department for the reason that it is being serviceable in nature and of uniform size of higher length, in our considered view, does not enable the imported goods as mis-declared for the purpose of Section 111(m) ibid and for imposition of penalty on the appellant importer. 9.4 Further, the original authority had not discussed about revision in classification of the imported goods arising on account of 75% secondary defective brass pipes i.e., 19.82 MTs measuring approximately around 14 feet of identical size found to be serviceable in nature, and are not as per declaration made out by the appellant importer as 'brass scrap'. Further, both the authorities below have also not discussed about the grounds on which they had categorized the action of the a....