COMMISSIONER OF CUSTOMS Vs. BALAJI STEEL ENTERPRISES

JUDGEMENT

(1.) THIS appeal filed by the department is against an order of the Commissioner of Customs granting the benefit of a Notification under the DEEC Scheme to the respondents in respect of two consignments of goods declared as "non -alloy steel melting scrap (other than stainless steel re -rollable)". The respondents had imported two consignments of such goods, weighing 84.515 MTs and 105.039 MTs, and filed two bills of entry for home consumption, one dated 31.10.1997 and the other dated 06.11.1997. The declared values of the goods were Rs. 4,98,449/ - and Rs. 5,98,384/ - respectively. Upon physical examination, the first consignment was found to be consisting of steel slates, strips in coils and sheets in coils, in various sizes and the second consignment was found to consist of 30% scrap and the balance serviceable materials in the form of steel slates, strips in coils and sheets in coils. The goods in the second consignment had been purchased by the respondents from M/s. Preeti Overseas Corporation at high seas. Statements were recorded from the respondents and the high sea sellers. A show -cause notice was issued to the respondents for confiscating the goods under Section 111(m) of the Customs Act and imposing penalty under Section 112 of the Act, apart from enhancing the assessable value of the goods to US 250 PMT for the purpose of recovery of duty. The proposals in the notice were contested. In adjudication of the show -cause notice, learned Commissioner accepted the importer's contention that neither of the consignments contained any material conforming to the definition of "Waste and Scrap" given under Note 8(a) to Section XV of the Customs Tariff Schedule and accordingly dropped the proposed action against them. Learned Commissioner ordered release of the goods to the respondents in terms of the declaration given in the bills of entry, subject to fulfilment of end -use condition stipulated in the Notification.

(2.) IN the present appeal of the department, the main ground of challenge against the Commissioner's order is that the examination report, said to be a very valuable evidence, was not taken into account by the Commissioner. It is the appellant's grievance that the retraction, by the importer, of their confessional statement was given credence by the adjudicating authority, regardless of the evidentiary value of the earlier statement and the examination report. The appellants also states that the Commissioner erred in relying on the Board's instructions dated April, 1991 relating to import of goods declared as 'metal scrap' under DEEC Scheme. Yet another grievance of the appellant is that learned Commissioner allowed clearance of the goods as such without ordering mutilation. It is stated that this action would not ensure that the goods after clearance was used for the purpose of melting in furnace. Learned SDR has reiterated these grounds of the appeal. There is no representation for the respondents today despite notice, nor any request of theirs for adjournment.

(3.) AFTER considering the grounds of the appeal, reiterated by learned SDR, we find that heavy reliance has been placed on the examination report. This report has not been produced by the appellant. Reliance has also been placed on the confessional statement of the importers. This statement has not been produced either. An attempt has been made to show that the Board's instructions were not applicable to the facts of the case. These instructions are also not forthcoming from the records filed by the appellant. In the circumstances, we are unable to give any credence to the grounds raised by the appellant. On the mutilation aspect, the appellant's grievance is that, without mutilation, the goods could be cleared and used as serviceable materials otherwise than for melting in furnace. We find that learned Commissioner has ordered release of the goods subject to end -use condition, which would mean that the goods should be melted in furnace and evidence thereof in the form of a certificate from the Central Excise Range Officer should be produced by the party. The Commissioner's order thus contains enough safeguards against misuse of the materials. It is also pertinent to note that the importer had not requested for mutilation of the goods at any stage of the proceeding. The show -cause notice also did not contain any proposal for such mutilation.