Customs, Excise and Gold Tribunal - Calcutta
V.M. Metals vs Commissioner Of Customs (Port), ... on 7 February, 2002
Equivalent citations: 2002(143)ELT68(TRI-KOLKATA)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by M/s. V.M. Metals is whether along with Copper Scrap Birch they had also imported electronic/electrical components in the disguise of scrap and whether they have under valued the value of scrap imported by them.
2. Shri P.K. Das along with Shri O.P. Choudhury, learned Advocate submitted that the Appellants are engaged in the business of Scrap of various metals; that they imported a consignment of Copper Scrap Birch weighing 20.05 M.T. in 1998; that the Adjudicating Authority under the impugned order has held that out of the total consignment of 20.05 M.T., 11.5 M.T. were electronic/electrical components valued at Rs. 21,25,853.23 and remaining quantity was undervalued and enhanced the value from U.S. $ 1250 to U.S. $ 1348; that they are not in any way concerned with the trading or manufacturing of any electronic/electrical goods; that they had not placed any order for supply of any electronic components and the entire goods imported by them were nothing but scrap in the form of factory rejects. He, further, submitted that as per Note 8 of Section XV of the Customs Act wastage and scrap means "Metal waste and scrap from the manufacture or mechanical working of metals and metal goods definitely not usable because of breakage, cutting up, wear or other reasons"; that as per the examination report dated 21-9-98 mentioned on the reverse side of the Bill of Entry the goods were cut length and variable sizes, colour and dimensions; that it is thus evident from the examination report read with Note 8 to Section XV that the goods imported by them were waste and scrap; that the report dated 2-11-99 received from Electronic Regional Test Laboratory it appears that 23 samples of coil and 4 samples of short wires were sent for test report; that 23 samples were having variation of wide range of value of inductance from 1.4 to 570 and the remaining 4 samples did not show definite value of inductance; that report also indicated that the samples may be used as inductor and jumper wire provided they satisfy design requirement. The learned Advocate further submitted that the goods in question cannot be used as such because of lack of design requirement; that the goods having variation of vide range of value of inductance cannot be treated as electronic/electrical components; that the report says "may be used as inductor and jumper" which is vague and misleading. Reliance was placed on the decision in the case of Swadeshi Polytech Ltd. v. CCE, Meerut - 1999 (109) E.L.T. 998. He also relied upon the decision in the case of Goods Agro Chemicals v. Asstt. Collector of Customs -1987 (32) E.L.T. 565 (Kerala) wherein it was held that taxability postulates the unerring element of certainty and taxing events can never be left in doubt. He also mentioned that they had submitted a pre-shipment inspection report of Marine Cargo Inspection Services according to which most of the copper wires were in short length and were burnt to remove outer insulation; some of the wires about 25% brittle due to the burning; a small ratio of materials about 6 to 7 percent were heavily oxidized; these were rejected materials and are to be considered as copper scrap birch only; that this report was prepared on the basis of Institute of Scrap Recycling Industries (ISRI). Scrap specification Circular 1998 which provides that copper scrap birch shall consist of copper content minimum 94% that in the present matter the imported material contained average percentage 99.4 per cent. Finally the learned Advocate submitted that they had requested for mutilation as early as July, 1998 which may be allowed.
3. Countering the arguments Shri D.K. Bhowmik, learned D.R., submitted that according to America Heritage Dictionary, Inductance means "Circuit element, typically a conducting coil, in which electromotive force is generated by induction"; that according to the said Dictionary Jumper means, "A wire used temporarily to complete or bypass a electric circuit"; that the test report given by ERTL is definite and specific as it gives the inductance value of the 23 samples in specific term and also opines that 4 samples look like jumper wire; that word "May be" means that these are usable as inductors and jumper, that there is no uncertainty in the test report at all. He also mentioned that the value of the scrap was enhanced on the basis of earlier import effected by the Appellants themselves.
4. We have considered the submissions of both the sides. As far as enhancement of the value of copper scrap birch is concerned it is mentioned in the impugned order that in earlier cases of import of copper scrap birch supplied by the same supplier the Appellants had accepted the value determination @ US $ 1348.30 per M.T. As the valuation has been resorted on the basis of earlier import effected by the appellants themselves, we do not find any infirmity in the enhancement of the value. The samples were tested by Electronic Regional Test Laboratory (East) of Department of Electronics, Government of India. After conducting the test they have opined that 23 pieces were in coil form and 4 pieces in short wire; that laboratory has given induction value of 23 pieces and opined these may be used as inductor and 4 samples, according to the Laboratory, look like jumper wire which do not show definite value of inductance. The Appellants have not produced any material technical or otherwise to negate the test report given by the laboratory. They have only submitted a pre-shipment inspection report by M/s. Marine Cargo Inspection Services. They had checked the material for quality and quantity and not from the angle whether these were electronic/electrical components. We agree with the findings of the Commissioner in the impugned order that since there was no indication of end product it was natural that expert would not be in a position to certify that these coils or short wire could be used as it is and obviously it has to be cut to a specific size and dimension depending on the specification of the end product in which these are meant to be used. We, therefore, agree with the findings of the Commissioner in the Adjudication Order that the goods were misdeclared and are liable for confiscation. However, considering all the facts and circumstances of the case we are of the view that if redemption fine is reduced to Rs. 2.5 lakhs the end of justice will be met. We also reduce the penalty to Rs. 50,000/- The appeal is disposed of in above terms.