Custom, Excise & Service Tax Tribunal
M/S. Bil Power Ltd., Mumbai vs Versu on 3 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Customs Appeal Nos.: 425-426/2005
(Arising out of the Order-in-Original Nos. KOL/CUS/PORT/8/2005 dated-15/09/2004 and KOL/CUS/PORT/9/2005 dated-11/02/2005 passed by the Commissioner of Customs (Port), Kolkata)
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
SHRI P.K. CHOUDHARY, HONBLE JUDICIAL MEMBER
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1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not ?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
M/s. BIL Power Ltd., Mumbai
APPELLANT(S)
VERSU
Commr. of Customs (Port), Kolkata
RESPONDENT(S)
APPEARANCE
Sri S.K. Mehta, Advocate
FOR APPELLANT(S)
Sri K.C. Jena, A.D.C. (A.R.)
FOR THE RESPONDENT(S)
CORAM:
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
SHRI P.K. CHOUDHARY, HONBLE JUDICIAL MEMBER
DATE OF HEARING & DECISION: 03/08/2016
FINAL ORDER NO: FO/A/75769-70/16
Per SHRI H.K. THAKUR
Present appeals have been filed by the appellant against order in original Nos. KOL/CUS/PORT/8/2005 dated-15/09/2004 and KOL/CUS/PORT/9/2005 dated-11/02/2005 both passed by Commr. of Customs, Kolkata as Adjudicating authority.
2. Shri S.K. Mehta (Advocate) appearing on behalf of the appellant argued that issue involved in both these appeals is the same and can be taken up together for disposal. It is appellants case that Silicon Electrical Steel Strip Scrap, obtained from dismantled old and used Transformers was imported by the appellant under several Bills of entry filed at a unit price of US $270 MT (CIF) to US $275mt (CIF). That the same was claimed as scrap but Adjudicating authority while deciding the issue has considered the imported goods as Silicon Electrical Steel (Cold Rolled Grain Oriented) strips (CRGO) classifiable under 72261100 and loaded the price to US $410 PMT CIF. That import was considered to be of old and used goods restricted under import policy and Confiscation of imported goods and imposition of Redemption fine was ordered under Section 111 (d), 111 (m) and Section 125 of the Customs Act, 1962.
2.1 Learned Advocate argued that as per their submissions before the Adjudicating authority the imported goods were claimed as scrap material for which no import licensing restrictions apply.
2.2 So far as enhancement of value of imported scrap it was argued by the Learned Advocate that the relied upon Bills of Entry, in para 13 of the show cause notice dated 30/9/2003 are for CRGO Steel Strips of irregular shapes and sizes and are not for material obtained from dismantling of old and used transformers. That even the country of origin is different and accordingly value has been loaded arbitrarily.
2.3 That the test got done from Superintendence Company of India Pvt. Ltd. is not a substitute for getting the test done through Chief Chemist of the authorised Central Laboratory.
2.4 That this issue of scrap with respect to other imports have been decided by CESTAT in the following cases in favour of importers which have been accepted by the department:-
(i) Kishore Kr. Agarwal Vs. C.C. (port), Kolkata [2010 (252) ELT 138 (Tri.-Kolkata)]
(ii) Ansun System Consulting Pvt. Ltd. Vs. C.C., Kolkata [2005 (179) ELT 511 (Tri.-Delhi]
3. Shri K.C. Jena (ADC), A.R. appearing on behalf of the appellant stated that classification of the imported goods claimed under Customs Tariff Heading (CTH) 722611 and not as scrap which was claimed by the other importers in the relied upon case laws. It was also his case that imported goods are Defective (old and used) Silicon Electrical Steel (Cold Rolled Grain Oriented) Strips, as decided by the Adjudicating authority and value has been correctly enhanced imposing redemption fine and penalty. Learned A.R. strongly defended the order passed by the Adjudicating authority.
4. Heard both sides and perused the case records. The issues involved in the present proceedings are the following:
(i) Whether the classification of the imported goods be considered as scrap or the same should be considered as old and used CRGO strips inviting confiscation or redemption?
(ii) Whether the assessable value was correctly enhanced by the Adjudicating authority?
4.1 So far point at para 4 (i) above is concerned appellant throughout the proceedings before the Adjudicating authority have agitated their imported goods to be scrap obtained from old and used transformers. A report from Superintendence Company of India Pvt. Ltd. confirmed the material to be CRGO sheets obtained from dismantling of old and used transformers. Similar test/report of the same agency was relied upon by the importers in the cases relied upon by the appellant. It was held in the relied upon case laws that similar goods obtained by dismantling of old and used transformers will be considered as scrap and not as old and used CRGO sheets requiring a licence. Observations made in para-4 of the case law- Kishore Kr. Agarwal Vs. C.C. (Port), Kolkata (supra), passed by this bench on identical facts, are very relevant and are reproduced below:
4.?We have carefully considered the submissions from both the sides. The value of the consignments has been enhanced adopting the, value applicable to defective CRGO sheets based on DOV data. The enhancement of value based on DOV data of comparable goods is no doubt an accepted method for customs valuation when the declared value of the goods are not acceptable for valid reasons. However, in the present case the basic dispute is whether or not the goods imported by the Appellant can be considered as defective CRGO sheets as held by the Commissioner. We find that it is not disputed that these consignments have emanated by dismantling of old used transformers which are scrap. As already held by the Tribunal, in the case of M/s. Ansun System Consulting Pvt.
Ltd. (cited supra), the materials obtained from dismantled transformers cannot be treated as defective CRGO sheets. Therefore, we do not find any misdeclaration of description by the Appellant in respect of the present consignments. Having held so, the question of applying higher value based on DOV data applicable to defective CRGO sheets also does not arise. Since we are accepting that there is no misdeclaration of description of the goods, the question of requirement of licence as applicable for import of defective CRGO sheets also does not arise. In view of the above we are unable to uphold the order of the Commissioner in enhancing the value, in confiscating the goods for want of requisite licence and in imposing penalty. 4.2 The above relied upon case laws have been accepted by the Department as nothing contrary to the claim of the appellant has been brought on record. On the issue of enhancement of value, with respect to point at para 4(ii) above, there is no evidence on record that bills of entries relied upon by the Revenue were for materials obtained from old and used transformers and whether the goods in those cases were also obtained from the same country as in the present proceedings. Other factors like nature of contract with the seller, quantum of goods imported etc. are also relevant while applying DOV data to establish contemporariness of imports. There is no iota of evidence that appellant has repatriated any excess money to the foreign supplier over and above the invoice value. Under the existing factual matrix it cannot be held that relied upon documents of imports were of contemporary nature. Accordingly enhancement of assessable value ordered by the Adjudicating authority is not sustainable and needs to be set aside.
5. In view of the above observations and the settled proposition of law, appeals filed by the Appellant are allowed with consequential relief, if any.
(Operative part of the order already pronounced in the court)
Sd/- Sd/- 8/8/16
(P.K. CHOUDHARY) (H.K. THAKUR)
JUDICIAL MEMBER TECHNICAL MEMBER
k.b/-
Customs Appeal Nos.: 425-426/2005
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