1. The present appeals are against the Order-in-Appeal No. 256 to 257(SM)CUS/JPR/2017 dated 15.11.2017.
2. The appellant imported certain goods and filed two Bills of Entry declaring the import of 'Alloy Steel Melting Scrap' falling under Tariff item 72042990 of the Customs Tariff. The Customs authorities opened and examined all the ten containers covered under the two Bills of Entries and found that seven containers were stuffed with the declared item but in respect of three containers the goods were found to be 'Grinding Media Balls' which appear to be new and unused and in perfect safe and size. Out of the total goods imported such goods were separated and proposed for classification as 'grinding media balls' under Customs Tariff item 73259100/7326 1100 which attracted the higher rate of duty.
3. The Customs Department proceeded to investigate a case of alleged mis-declaration. Three samples were drawn of the goods said to be 'Grinding Media Bills' and the opinion of following experts were taken by Customs.
(i) Sh. P.C. Sanghi, Chartered Engineer
(ii) Sh. Virendra Kumar Gupta, Production Manager M/s. Vaibhav Meta Cast Pvt. Ltd.,
(iii) Sh. B.K. Sharma, Associate General Manager M/s. Hindustan Zinc Limited
The experts opined that the samples were of 'Grinding Media Balls'- new and unused.
4. Examination of the samples by Chemical Examiner, CRCL, Government of India resulted in the opinion that the fact whether such goods were used or not cannot be ascertained by chemical test. Sample of the goods sent to National Test House, Government of India begot the opinion that the grinding balls imported were not as per IS Standard in terms of hardness and chemical composition.
5. Opinion of Shri I.P.S. Arora, Chemical Engineer was also obtained at the instance of the appellant who stated that the grinding media balls were found with deep cuts and varying dimensions.
6. In the above scenario, show cause notice dated 08.05.2014 was issued by the Customs Department which resulted in the Order-in-Original dated 10.11.2014 in which the charge of mis-declaration was upheld; the 'Grinding Media Balls' were ordered for reclassification and differential duty was charged. Imported offending goods were ordered for confiscation and allowed for redemption. Penalties were also imposed on the appellant as well as Sh. R.N. Sharma, Managing Director.
7. When the issue was challenged by the appellant before the Commissioner (Appeals) he set aside the order of the Original Authority vide his order dated 18.02.2015, against which Revenue filed an appeal before this Tribunal, which was decided by this Tribunal vide Final Order No. 51995/2017 dated 28.02.2017 in which the issue was remanded to the Commissioner (Appeals) for denovo decision after allowing the cross examination of the experts on whose reports Revenue was relying. The present impugned order was passed by the Commissioner (Appeals) in the denovo proceedings in which the Order-in-Original was restored. Aggrieved by the impugned order, the present appeals have been filed.
8. With the above background, we heard Ms. Nupur Maheshwari, ld. Advocate for the appellant and Sh. Rakesh Kumar, ld. AR representing Revenue.
9. The arguments advanced on behalf of the appellant are summarised below:
(i) The imported consignment was accompanied by Pre-Inspection Report by an agency at the port of origin in which it stands certified that the imported goods are alloy steel melting scrap. Since the inspecting agency is approved by the DGFT, such certificate is to be accepted.
(ii) The report issued by the CRCL has stated that the fact whether the imported goods were new or old cannot be ascertained by chemical analysis but the test report from National Test House, which is a Government agency, has opined that the samples tested were of grinding balls but which did not satisfy the IS standards.
(iii) The certificate issued by the Chartered Engineer Sh. I.P.S. Arora has categorically stated that the grinding balls were found with deep cuts indicating that such goods were old and hence scrap.
In view of the above evidences in support of the appellant, the charge of mis-declaration cannot be sustained.
(iv) The appellant has also requested for allowing clearance of the goods after mutilation. This will ensure that the goods cannot be utilised for any purpose other than as scrap for melting but such request has been denied by the Department.
10. Ld. AR appearing for the Revenue justified the impugned order. He argues that the Commissioner (Appeals) has revised his order after allowing cross-examination of the various experts. He also argued that the expert Sh. IPS Arora who has examined the goods at the instance of the appellant has also retracted his original statement and his cross-examination has confirmed that the samples were new and unused grinding balls.
11. Ld. AR further argued that the new grinding balls were concealed within the consignment of melting scrap. This evidently substantiates the charge of mis-declaration. Further, keeping in view of the fact that the importer is also engaged in the manufacture of grinding balls, he argued that the impugned goods were new and meant to be sold in India.
12. We have heard both sides at length and carefully gone through the appeal record.
13. The allegation in the present case is that the appellant has declared the imported goods as 'Alloy Steel Melting Scrap'. But amidst the declared melting scrap, the examination by Customs Officers revealed that 'Grinding Media Balls' were found which were new and unused. Such balls can also be considered as scrap only if they were new and old.
14. The proceedings before the lower authorities have taken twists and turns with contrary opinions expressed by different experts. The opinion given by CRCL as well as National Test House has been of little help in deciding the controversy one way or other. The three experts whose opinion was taken by the Customs Department took the view that the impugned goods were 'Grinding Media Balls' which were new and unused. During the cross examination of these experts before the Commissioner (Appeals), they have stood by their opinion but the other expert Sh. I.P.S. Arora, Chartered Engineer who has originally given the opinion that there were deep cuts and were of varying dimensions retracted his original view during cross-examination.
15. It has been emphasised again and again before us on behalf of the appellant that the Pre-Inspection Certificate obtained at the load port has certified the goods as scrap. But we are of the view that for purposes of assessment of imported goods, the examination of goods at the port in India is more relevant. Hence, we are inclined to give more credence to the opinion of the experts obtained locally. The three experts commissioned by Customs has unanimously opined that the impugned goods were new 'Grinding Media Balls'. Sh. I.P.S. Arora, Chartered Engineer who has originally given a contrary opinion, has during cross-examination, retracted his original view. In the above scenario, we are of the view that the order passed by the lower authority, who has gone by the majority of the opinions, merits no interference. His views are quoted below with our approval.
"In light of the facts as mentioned above available on records as discussed in point No. (A) to (H) above I find that for classifying the goods under above heading there is no precondition of fulfillment of condition of specification as per IS standard. As well as in all the report of experts, every expert including National Test House, CRCL, independent expert, chartered engineer have accepted that goods in questions are Grinding Media Balls. As regards whether the imported grinding media balls are new or old one, in my opinion the same can be verified by visual inspection of all the three experts Sh. B.K. Sharma, Sh. P.C. Sanghi and Sh. V.K. Sanghi have opined that the goods imported were Grinding Media Balls. As regards National Test House reports it is provided that goods examined by them are grinding media balls having size as per packing slip and ball diameter within specified value, but not confirming to the IS specification in respect of hardness and chemical composition. Sh. Rakesh Saini, Scientist Incharge of National Test House in his statement has stated that as their test house is not technically equipped to test and make comments in respect of the condition of the Grinding Media Balls samples i.e. whether New or Old forwarded by appellant to their office. In the Customs Tariff Act, 1962, for classification of the goods under Chapter heading 7325 and 7326, there is no pre-condition of fulfillment of condition of IS specification, end use of the goods etc. In the panchnama dated 20.11.2013 it is also described that old and used grinding media balls which cannot be used as Grinding Media Balls already not included in the quality of seized goods. I therefore, uphold the findings of the
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Adjudicating Authority regarding classification of goods in question. 12. The appellant has declared the goods in their documents submitted to the department at the time of importation classified the same as Alloy Melting Scrap falling under Chapter 72042990 of the Customs Tariff Act, 1962. As discussed in the previous para it is clear that the classification of the goods i.e. Grinding Media Balls 53.240 MT falling under Chapter 7325 of the Customs Tariff Act, 1962 as determined by the department after investigation of the case. Therefore, after investigation, the fact of the mis-declaration of classification of goods in question was detected. Once, the mis-declaration of classification of goods was sustained, the value declared by the appellant would automatically required to be re-determined. Thus, the view taken by the Adjudicating Authority in the matter is correct, accordingly I uphold the same". 16. In view of the above discussions, we uphold the impugned order and reject the appeals.