Custom, Excise & Service Tax Tribunal
M/S.D.S.Metal (P) Ltd vs Cc Chennai on 6 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/443/2005
[Arising out of Order-in-Appeal No.C.Cus.454/2005 dated 11.7.2005 passed by the Commissioner of Customs (Appeals), Chennai]
For approval and signature:
Honble Mr. P.G.CHACKO, Member (Judicial)
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 the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s.D.S.Metal (P) Ltd.
Appellant/s
Versus
CC Chennai
Respondent/s
Appearance :
Shri M.Masilamani, Advocate Shri B.L.Meena, SDR For the Appellant/s For the Respondent/s CORAM:
Mr. P.G. Chacko, Member (Judicial) Date of hearing : 6.2.2008 Date of decision : 6.2.2008 Final Order No.____________ The appellants had filed a Bill of Entry on 14.5.02 for clearance of 150 MTs of goods declared as Non-alloy Steel Melting Scrap valued at US$ 18300 CIF. The National Metallurgical Laboratory (NML) examined the goods as required by the department and they reported that 50-60% of the cargo could be considered as scrap suitable for melting and that the remaining material consisting of box spanner components could be considered as second grade re-usable spanner components and could not be considered as melting scrap. The importer, who found the NML report to be unacceptable, themselves sought opinion from a Chartered Engineer, who certified the goods to be Non-alloy Steel Melting Scrap. In the wake of the divergents of opinion, the department sent a sample of the material to the Indian Institute of Technology (IIT), Chennai, after releasing the goods provisionally to the importer as per their request on execution of bond. The IIT reported that 85% of the material consisted of rusted components and could be considered as Non-alloy Melting Scrap and the remaining material could be considered as re-usable second grade spanner components. On the basis of this report, the original authority worked out a quantity of 22.5 MTs of the goods, as re-usable second grade spanner components and demanded duty of Rs.85,788/- on the said quantity from the assessee. The appeal filed by the assessee against the decision of the original authority was dismissed by the Commissioner (Appeals). That authority did not accept the End-use Certificate produced by the assessee in support of their claim for the benefit of the Customs Notification No.21/2002 dt. 1.3.2002 (Sl.No.200). The present appeal is directed against the appellate Commissioners order.
2. Heard both sides. It was submitted by ld.consultant for the appellants that it was not correct on the part of the lower authorities to have relied on the IITs report which was based on examination of only a sample of the imported material and not based on examination of the entire consignment. He also submitted that the End-use certificates issued by the Deputy Commissioner of Central Excise having jurisdiction over the appellants induction furnace certifying that the entire imported material covered by the Bill of Entry had been consumed in the furnace for the manufacture of MS ingots were rejected by the lower appellate authority without valid reason. Ld.SDR reiterated the findings of the lower appellate authority.
3. I have carefully considered the submissions. The imported material was provisionally released to the assessee on execution of a bond wherein the assessee bound themselves to accept any demand of duty based on IITs test report. The original authority finalized the assessment on the basis of IITs report. Subsequently, before the Commissioner (Appeals), the party produced End-use certificates issued by the Deputy Commissioner of Central Excise. These certificates indicated that the entire imported material covered by the Bill of Entry had been consumed for melting in the induction furnace of the appellants. This would prima facie indicate that 15% of the material which was certified by the IIT to be re-usable components was also melted in the furnace. The relevant condition for the benefit of Notification No.21/02 was that the importer should produce a certificate issued by the Deputy Commissioner of Central Excise or the Asst.Commissioner of Central Excise, as the case may be, in whose jurisdiction, the imported goods had been used, that the goods had been so used vide condition No.20 attached to Sl.No.200 [Melting scrap of iron and steel (other than stainless steel or heat resisting steel), for use in, or supply to, a unit for the purpose of melting] of the Table annexed to the Notification. Obviously, it was in their bid to establish compliance with the above condition that the appellants produced the End-use certificates. However, it appears from these certificates that these were issued in terms of Customs Notification No.17/01 dt. 1.3.01, which was superseded by Customs Notification No.21/02 ibid. The entry at Sl.No.181 in Notification No.17/01 is similar to the entry at Sl.No.200 in Notification No.21/02. Condition No.18 attached to Sl.No.181 of Notification No.17/01 is also pari materia to condition No.20 attached to Sl.No.200 of Notification No.21/02. Probably, the Deputy Commissioner of Central Excise might have overlooked the fact that Notification No.17/01-Cus. had been superseded by Notification No.21/02-Cus.
4. In the aforesaid facts and circumstances, I am of the view that the original authority should adjudicate the case afresh after giving the assessee a reasonable opportunity of producing fresh End-use certificates issued in terms of Notification No.21/02-Cus. If such certificates certifying that the entire imported material covered by the relevant Bill of Entry had been melted in the assessees induction furnace for manufacture of MS ingots are produced and if they are in terms of the correct Notification, the adjudicating authority shall accept the documents as evidence of compliance with the relevant condition of the Notification and, accordingly, the benefit of concessional rate of duty shall be extended to the assessee. For this purpose, the orders of the lower authorities are set aside and this appeal is allowed by way of remand. It goes without saying that the assessee shall also be given a reasonable opportunity of being heard.
(Operative part of the order was pronounced in open court on 6.2.2008) (P.G.CHACKO) MEMBER (J) gs 1 2