Customs, Excise and Gold Tribunal - Delhi
Varun Aluminium Industries Ltd. vs Commissioner Of Cus., Nava Sheva on 15 January, 2002
Equivalent citations: 2002(80)ECC322, 2002(141)ELT238(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In these two appeals filed by M/s. Varun Aluminium Industries Ltd. the issue involved is whether Aluminium Scrap imported by them is liable for confiscation under the provisions of Customs Act.
2. Shri S.V. Kanetkar, Managing Director of the Appellant-Company, submitted that the appellants have been importing the Used Beverage Cans Aluminium Scrap for the past 7 to 8 years under O.G.L.; that they had imported two consignments from M/s. Crown Metals; that under the two impugned Orders the impugned goods have been confiscated on the ground that they do not fall either in TALDON or TALDORK grade of ISRI and their import is restricted requiring import licence for importing the same which the appellants did not have. He, further, submitted that ISRI Specification have been framed for basically avoiding the dispute between the buyer and the seller and are normal guidelines; that it has been clarified in the preface to ISRI Specification that "parties to a transaction may satisfy particular variation or addition to these specifications as are suited for their specific transaction and for their individual convenience. Any deviation from standard specification, however, should be mutually agreed to and so stipulated in writing by the parties to the transaction.......... The specification of Scrap materials are subject to negotiation between buyer and seller. Specification vary according to the requirement of individual consumer"; that these specifications are not on the same footing as ISI, BS and DIN wherein specifications are well defined and are not variable depending upon the requirement of buyer and seller; that Mr. Ross Hartley, Environmental and Technical Director, Bureau of International Recycling has clarified in his letter dated 2-5-2001 that the scrap densities are achieved by mechanically processing the aluminium UBCs in operations which do not change the composition of the metal scrap nor indeed its fitness for recycling as furnace feed stock. The actual density of any such shipment of scrap metal does not prevent later bailing, shredding, sharing or briquetting to increase or decrease the density to suit local scrap handling requirement. He, further, mentioned that according to Mr. Ross the density values recorded for TALCRED, TALDACK, TALDON and TALDORK are indicative of the United States Domestic Market requirements or perhaps derived from those, and would not be necessarily suited or relevant to all countries in the world; that these explanations clearly show that ISRI specifications are flexible in nature which could be varied by agreement between the buyer and the seller. He also mentioned that Mr. Thomas B. Mele, Chairman, Non-ferrous Specification Committee, ISRI has clarified in his letter dated 25-5-2001 that four specifications of Aluminium scrap "were written for specific types of processing equipment common here in U.S.A. The dimensions and densities were meant to mirror what was produced by this specific equipment and to guide machine manufacturer in their designs............ These guidelines are just that, Guidelines, and any variation is simply arranged between the buyer and the seller. He also put it on record that foreign supplier, Crown Metal, Bahrain, has mentioned in their letter dated 12-2-2001 that they were unable to supply Aluminium Scrap UBC having density 22 lbs per cubic foot as their machine did not produce so low density material. They requested the Appellants to accept their standard material and accordingly the Appellants accepted the same. He also submitted that even the Commissioner in the Adjudication Order has observed that the Appellants have a strong point "when they state that flattened aluminium scrap is in any case flattened aluminium scrap and nature of the goods does not change with the change in the density, the goods remaining Used Can Aluminium Scrap" . The learned Managing Director also showed us the samples of the Aluminium Scrap in question - one having the required density and the other with an increased density to bring home this point that both are nothing but Used Beverage Cans only. Finally he submitted that in an earlier decision in the case of Alex Cables Ltd. v. Commissioner of Customs, 2001 (132) E.L.T. 212, the learned Advocate appearing on behalf of the Appellants had conceded that the imported goods did not fall under the grades and their request was for setting aside the penalties imposed on them; that therefore, the said decision is not applicable to the present matter.
3. Countering the arguments Shri M.P. Singh, learned DR, submitted that in Alex Cables case the Tribunal had reached the conclusion that the goods did not satisfy the grades as mentioned in ISRI; that according to the Import Policy import is allowed only densified/briquetted aluminium used beverage can scrap covered by ISRI code word TALDON/TALDORK; that as admittedly the density in the impugned consignment was more than density prescribed in ISRI code the goods do not satisfy the condition specified in the Import Policy; that .accordingly import licence will be required; that if the density could be varied by mutual agreement there was no necessity to prescribe the minimum and maximum density in ISRI code; that the Adjudicating Authority has given his specific finding that the items not covered in the specifications are subject to special arrangement between buyer and seller does not appear to hold water because this applies only to those items which are not covered in specification provided in the write-up against code TALDON itself. He further submitted that if any variation in the specification are mutually agreed between the buyer and seller this should be ratified only then these could be acceptable. In reply the learned M.D. submitted that the ratification by ISRI will be called when there is a new product and not in the case of variations in specifications.
4. We have considered the submissions of both the sides. The facts which are not in dispute are that what was imported by the appellants was Used Beverage Can Aluminium Scrap which was to be used by the appellants in further manufacture of their product. The Revenue has confiscated the goods and imposed penalty on the ground that the density of the used beverage can was more than the density mentioned in ISRI code. On a perusal of the scrap specification Circular 2001 issued by the Institute of Scrap Recycling Industries (ISRI) we find force in the submissions of the Appellants that ISRI Code are meant to be guidelines and are intended to assist person in buying and selling their materials and products. The Preface to the Code clearly provides for variation or addition to the specifications subject to mutual agreement to suit the specific transaction and individual convenience. The appellants have shown that the density of the impugned goods was more not on account of change in the products imported but on account of inability of the machine employed by foreign supplier to produce so low density materials. As provided in the specification itself both, appellants and foreign supplier, mutually agreed to accept the used beverage can aluminium scrap with more density. Bureau of International Recycling has also clarified in their letter dated 2-5-2001 that scrap density do not change the composition of the metal scrap and the aluminium UBC remain the same material whether compressed to 12 lbs per cubic foot or 15 lbs per cubic foot nor does the density affect the environmental performance of the material as such, it retains the same composition. We also find substance in the submissions of the Appellants that the decision in the case of Alex Cables is not applicable to the facts of the present matter as therein the learned Advocate appearing for the Appellants had consented to the variation and the submissions made in the present matter were not raised before the said Bench. Further, we find that in the said matter there was no mutual agreement between the buyer and the seller as in spite of specific order placed by the appellants therein and the description being reported in the documents, the suppliers had sent the wrong goods. It has been held by the Tribunal in the case of Commissioner of Customs, Bombay v. Hindustan Petroleum Corporation Ltd., 2000 (121) E.L.T. 109 that "the decision which is the result of consent between parties does not settle a question of law, and therefore, is binding on no one other than the parties to the same". We also observe that the Adjudicating Authority himself, as also pointed out by the Appellants, as observed that flattened aluminium scrap is in any case flattened aluminium scrap and nature of the goods does not change with the change in the density, the goods remaining Used Can Alumininum Scrap. In view of these facts and circumstances we set aside both the impugned orders and allow both the appeals.