Custom, Excise & Service Tax Tribunal
Sri Kishore Kr. Agarwal vs Commissioner Of Customs(Port), ... on 12 October, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.Cus.Ap.193/05
(Arising out of Order-in-Original No.Kol/Cus/Port/10/2005 dated 16.09.2004 passed by the Commissioner of Customs(Port), Kolkata.)
FOR APPROVAL AND SIGNATURE
HON'BLE SHRI S.S. KANG, VICE PRESIDENT
HON'BLE SHRI M. VEERAIYAN, TECHNICAL MEMBER
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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Sri Kishore Kr. Agarwal
Applicant (s)/Appellant (s)
Vs.
Commissioner of Customs(Port), Kolkata
Respondent (s)
Appearance:
Shri S.K. Mehta, Advocate for the Appellant (s) Shri J.A. Khan, Authorised Representative(SDR) for the Respondent (s) CORAM:
Hon'ble Shri S.S.Kang, Vice President Hon'ble Shri M. Veeraiyan, Technical Member Date of Hearing:- 12.10.2009 Date of Pronouncement :- 12.10.2009 ORDER NO............................................................................
Per Shri M. Veeraiyan.
1. This is an Appeal against the order of the Commissioner dated 16.09.2004. The Appellant imported consignments and declared them in the bills of entry as "Silicon Electrical Steel Strip Scrap (originated from dismantled old and used transformers)" and sought classification under Heading 7226.11; they declared total value of Rs.35,64,373/-(Rupees Thirty Five Lakhs Sixty Four Thousand Three Hundred and Seventy Three only). On the basis of investigation and relying on the report of Superintendence Company of India Pvt. Ltd.(a company authorized under EXIM Policy for the purpose of examination of cargo) the Commissioner held that what was imported by them was secondary/defective Silicon Electrical Steel (CRGO) Strips and consequently enhanced the value to Rs.86,97,308/-(Rupees Eighty Six Lakhs Ninety Seven Thousand Three Hundred and Eight only). He also held that licence was required for the import of the said second-hand goods. Accordingly, he ordered confiscation of the imported goods and allowed the same to be redeemed on payment of fine of Rs.13,00,000/-(Rupees Thirteen Lakhs only) and imposed penalty of Rs.3,25,000/-(Rupees Three Lakhs Twenty Five Thousand only) under Section 112(a) on the Appellant.
2. Learned Advocate submits that the material imported is retrieved from old and used transformers which are dismantled. Therefore the consignments imported are only scrap. The report of the Superintendence Company is not to be relied upon and the Department should have got the test conducted through the chemical examiner or the office of the Chief Chemist who are authorized for examining cargo for the customs purpose. The opinion of the expert that the cargo imported is not scrap and can be used for low grade transformers is not substantiated by any authentic technical literature. The description given by them is correct and that there is no violation of licencing provisions and., therefore, the confiscation and imposition of penalty are not warranted. Since there is no mis-declaration of description, the enhancement of value of imported goods by comparing to the value of defective and secondary CRGO sheets are not justified. He also relies on the decision of the Tribunal vide final Order No.1283/04-NB-A dated 04.11.2004 in respect of appeal filed by M/s.Ansun System Consulting Pvt. Ltd. wherein it has been held that the materials obtained from dismantled and old transformers have to be treated only as scrap and could not be considered as defective goods, and that defective goods are those which arise during the manufacture on account of not confirming to quality, standard etc..
3. Learned Departmental Representative (SDR) reiterates the findings of the Commissioner. He also submits that the contention of the Appellant that Superintendence Company is not authorized to test the imported consignment is not correct as they are specifically approved under EXIM Policy for testing of import-export consignments. The opinion of the said expert should be accepted and the order of the Commissioner should be upheld. He also submits that the goods should be treated as defective CRGO sheets and the valuation as per contemporaneous import price based on DOV data should be upheld.
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 mis-declaration 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 mis-declaration 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.
5. In view of the above, order of the Commissioner in so far as the same relate to the nine impugned consignments is set aside and Appeal is allowed with consequential relief as per law.
(Pronounced and dictated in the open court.) sd/ sd/ (S.S.KANG) (M. VEERAIYAN) VICE PRESIDENT TECHNICAL MEMBER sm 5 Appeal No.C.A.193/05