HIREN ALUMINIUM LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) In these 2 appeals, filed by M/s. Hiren Aluminium Ltd. and M/s. Pankaj Extrusions Ltd., the common issue involved is whether aluminium scrap imported by them is liable for confiscation under the provisions of Customs Act.

(2.) Shri C. Hari Shanker, learned Advocate, submitted that both the appellants imported aluminium scrap of used Beverage cans (UBC) Taldork as per ISRI specifications; that the Commissioner, under the impugned Orders, have confiscated the goods with an option to redeem the same on payment of redemption fine and imposed penalty holding that the goods do not conform to the specifications for Taldork grade. The learned Advocate, further, submitted that ISRI specifications are framed basically for avoiding the dispute between the buyers and sellers and are merely the guidelines; that this has been clarified in preface to the ISRI specification which states that "specification of scrap materials are subject to negotiation between buyer and seller. Specifications vary according to the requirements of individual consumers"; that ISRI specifications are not on the same footing as ISI, BS, and DIN wherein specifications are self -defined and are not variable depending upon the requirement of buyer and seller; that Mr. Ross Bartley, Environmental and Technical Director, Bureau of International Recycling, in his letter, dated 27 -2 -2001 has mentioned that "these scrap densities are respectively achieved by shredding or...briquetting the UBCs; such mechanical processing does not in any way change the composition of the metal scrap or indeed its fitness for recycling as furnace feedstock. The actual density of any such shipment of scrap metal does not preclude the later mechanical processing such as balling, shredding, shearing or briquetting to increase or decrease the density to suit further handling of the scrap metal". He finally submitted that the Appellate Tribunal in the case of Varun Aluminium Industries Ltd. v. C.C., Nava Sheva - Final Order Nos. 18 -19/2002 -B, dated 15 -1 -2002 [2002 (141) E.L.T. 238 (Tri -Del.)] has held that ISRI code is basically for the guidance of the traders and different type of scraps are mentioned only for the purpose of trade and variation at the option of the buyer and seller is permitted; that the decision in Varun Aluminium case squarely covers both the present matters.

(3.) Countering the arguments Shri D.N. Chaudhary, learned SDR, submitted that according to the Import Policy, import is allowed only of densified/briquetted aluminium used Beverage cans scrap covered by ISRI code Taldon/Taldork; that once the specifications have been provided in ISRI code they have to be followed otherwise the very purpose of giving the specifications will be lost. He also mentioned that in Varun Aluminium the consignment was having more density than the prescribed in ISRI code and there was mutual agreement between the buyer and the seller; that in the case of Hiren Aluminium Ltd. the briquette density was less than the minimum specification of 50 Pounds per cubic fit; that in the case of Pankaj Extrusion Ltd. briquette are in the form of small cylinders and length 3.5 inches and diameter of 4.5 inches which is much below the variable minimum length of 8 inches; that accordingly the decision in the case of Varun Aluminium is not applicable. In reply the learned Advocate submitted that in the case of Pankaj Extrusion the export contract between foreign supplier and Pankaj Extrusion was in respect of Briquetted Aluminium UBC scrap. Taldork and the specification given under the clause 'Tacking' specifically refers to the variation/addition from the standard ISRI specification. It is also mentioned that the supplier confirms that these deviations/additions from the standard specification covered by ISRI word "Taldork" shall govern this contract. He, therefore, submitted that in view of the preface to ISRI code and also the fact that it is mentioned in the specification for Taldork grade that "items not covered in the specification, including moisture, and any variations in the specification are subject to special arrangement between buyer and seller", the impugned goods are not liable for confiscation.