ANTARTIC INDUSTRIES LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE issue involved in this appeal filed by M/s. Antartic Industries Ltd. is whether the goods imported by them were melting scrap or these were classifiable as old, used, rusted pipes.

(2.) ARGUING on behalf of the Appellants the ld. Counsel submitted that the Appellants are manufacturing M.S. Ingots in induction furnace for which imported scraps is the main inputs. They had imported waste, heavy melting steel scrap and accordingly filed the Bill of Entry. On examination, the goods were found to contain 80% old, used and rusted pipes of different sizes and it was also observed that the ends of the pipes were not finished. The rest of the 20% scraps was bent and crushed in nature. The Commissioner of Customs, Kandia, after offering personal hearing to the CHA and the representatives of the importers, confiscated the goods with option to redeem the same on payment of fine Rs. 5 lakhs, holding that there was misdeclaration as goods were declared as scrap whereas they have been found out to be serviceable pipes for which licence is required under Para 24 of the Exim Policy.

(3.) ARGUING on behalf of the appellants, the ld. Advocate submitted that the importer was actual user and as soon as he came to know, after examination of the goods, that these contained old, used and rusted pipes of different sizes, they requested for the mutilation of the same. Section 24 of the Customs Act 1962, empowered Customs Department to order the mutilation of the imported materials. If it cannot be used for more than one purpose according to Section 24, the rate of duty will be applicable in the condition of mutilated goods. He also submitted that the matter was taken up with CBEC by the Chamber of Commerce and Industries, Punjab and the Board vide letter No. F. 446/9/95 -Cus., dated 16th June, 1995 informed the Chamber that whenever serviceable goods are noticed, they are ordered to be mutilated to such extent to become steel scraps, and the benefit under notification is extended and the consignments are assessed as steel scrap. Ld. Advocate referred to earlier adjudication Order No. 57/97 passed by the then Collector of Customs, Kandla in which, in a similar situation, the goods were allowed to be redeemed on fine with the condition that the goods were mutilated and importer produced a certificate from jurisdictional excise authorities about the actual use in electric arc/induction furnace within six months of the clearance. He further submitted that in similar circumstance their goods also must be released without confiscation and without enhancing the value. He also relied upon the decision in the case of Tata Iron and Steel Co. Ltd. v. C.C.E. - 1995 (75) E.L.T. 3 (S.C.) in which it was observed that there are different grades of melting scraps viz. heavy, medium and light. He further observed that the technology has changed and in view of the development in the Iron and Steel Industry, the size factor could not always be the main criterion for the classification of Steel scraps. The ld. Counsel also placed reliance on the decision in the case of Amarson Woollen Mills v. C.C., Bombay -1992 (61) E.L.T. 756 and in the matter of Panchamal Steel Ltd. v. C.C.E. -1993 (68) E.L.T. 436 (T). Finally it was submitted that the benefit of doubt which is evident from the fact that no penalty was imposed by the adjudicating authority on the importer, should be given to the appellants.