HINDUJA FOUNDRIES LTD. Vs. COMMISSIONER OF CUS. (IMPORT)

JUDGEMENT

(1.) THE appellants are manufacturers of steel castings. They imported 5 consignments of steel scrap at Chennai Port during March 2009. For one consignment they filed Bill of Entry No. 983187 dated 31 -3 -2009 declaring the goods as "Foundry grade heavy melting scrap" claiming classification under Heading 72.04 and concessional rate of customs duty as provided at SI. No. 200 of Customs Notification No. 21/2002 -Cus. This exemption was applicable to "Melting scrap of iron or steel (other than stainless steel)" falling under sub -heading 72.04 of the Customs Tariff Act. On examination of the goods it was seen that the goods were cut pieces of rails. Revenue was of the view that such goods are classifiable under Customs Tariff Item 7302 10 90 in which case the exemption under Notification No. 21/2002 -Cus. at Sl. No. 200 was not available to the goods. Further goods falling under this Tariff Item was subject to import restrictions. Since Revenue felt that the goods were mis -declared for circumventing import policy and also for claiming exemption and hence the goods were liable to confiscation under Section 111(d) and 111(m) of the Customs Act, 1962 and proceedings were initiated for confiscating the goods and for denying the exemption claimed. On conclusion of the proceedings, the goods were confiscated under the provisions of Section 111(d) and 111(m) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and the appellant was allowed to redeem the goods on payment of a fine of Rs. 6 lakhs as per the provisions of Section 125 of the Customs Act, 1962. Further, a penalty of Rs. 3 lakhs was imposed on the appellant under Section 112(a) of the Customs Act, 1962. Aggrieved by the order of the Commissioner, the appellants have filed this appeal before this Tribunal.

(2.) THE counsel for the appellant submits that the consignment contained used rails of various lengths less than 2 mtrs. The position that these goods were used and worn out is not disputed by Revenue. It is also not disputed by the Revenue that these goods were not fit for use as rails and it is also not disputed that these goods could be used as heavy melting scrap. The appellants produced certificate from the Central Excise officers in -charge of their foundry showing that the goods were in fact used in their foundry for manufacture of castings.

(3.) THE learned counsel also points out that the adjudicating authority has relied on C.B.E. & C. Circular dated 17 -1 -2006 without actually mentioning it apparently because it has already been struck down by the Hon'ble High Court of Madras in Madras Steel Re -Rollers Association v. Union of India -, 2007 (217) E.L.T. 167 (Mad.) and Hon'ble High Court of Punjab & Haryana in Gurudev Overseas Ltd. v. C.B.E.. & C. - : 2008 (229) E.L.T. 195 (P & H).