ORDER
V.K. Ashtana, Member (T)
1. In this appeal against Order-in-Original No. 100/98 dt. 2.6.1998, the Ld. Commissioner of Customs has held most of the impugned goods has not qualified as the bushelling scrap and therefore has confiscated the same, imposed fine of Rs. 2 lakhs and penalty of Rs. 50,000 and has held that duty is to be collected as applicable steel sheets as distinct from bushelling scrap.
2. Heard Shri S. Murugappan, Ld. Advocate who submitted that the quantity involved is 124.740 MTs out of total quantity of 169.540 MTs imported under Bill of Entry No. 3808 dt. 21.1.1998 contained in 8 containers for which importers had declared the value of Singapore Dollars 240/MT and had claimed assessment under Customs Notification No. 203/92 on the basis of Advance Licence for melting scrap. He submits that the examination was conducted twice wherebv 44.8 MTs were held to be edge cuttings and therefore scrap. The remaining items concerned of scrap in the form of sheets in the following sizes in inches:
13/10, 11/6, 16/19, 15/8, 9/7, 13/8. Most of the sheets also contains holes in the corners. He submits that the order impugned does not treat these as scraps by invoking Note 8(a) of Section XV and also increases the ti ansaction value to US $250/MT citing contemporaneous import of mild steel defective sheets under Bill of Entry No. 1312 dt 7.1.1998. The notification claimed has been denied as it has been held that these are not scrap.
3. Ld. Advocate submits that definition contained in Note 8(a) to Section XV is as follows:-
(a) Waste and scrap; Metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons.
4. A plain reading thereof shows that the issue is to be decided basically whether these are definitely not usable as such because of the various reasons enumerated thereunder. He submits that such a decision should be objective. To be so, it should be based on technical considerations. He submits that one such consideration could be with respect to the internationally accepted practice as contained in this scrap specifications circular of 1990 issued by the Institute of Scrap Recycling Industries, Inc., Washington, D.C. He takes us to Items 207 & 207(a) which concerns bushelling scrap and submits that normally the size should not exceed to 12 inches but the said standard also lays down that any deviations are permitted by mutually agreement between the buyer and the seller. Ld. Advocate submits that in some of the cases the items imported are even less than 12 inches as far as both length and breath are concerned. In other cases, it is only marginally higher in one of the two aspects. He further submits that Bureau of Indian Standards has also prescribed the goods for classification of processed ferrous scrap and vide IS 2549 : 1994. He takes us to the item 5.1 which deals with heavy melting scrap and more particularly item 5.18 which deals with bushelling scrap. He submits that most of their items imported would qualify under the said standards. He submits that neither of these have been clearly considered in the order impugned. He further submits that the current practice of the same Custom House is that a technical opinion with regard to such bushelling scrap is invited from the National Metallurgical Laboratory, Madras and normally the same is relied upon by the Custom House. He submits that such a request was also made before the Customs authorities at the original stage. The same was not considered. He submits that therefore because of lack of consideration of these standards as well as lack of consultations of National Metallurgical Laboratory, Madras for hearing technical opinion has resulted in denial of justice in the matter.
5. Ld. DR submits that the appellants have sought to import the goods under advance licence which carries the condition that the scrap to be imported therein should conform to the definition thereof under Section 15 of the Customs Tariff Act. She submits that visual examination thereof shows that dimensions are large enough and the items are in regular sheets form and therefore it canncjt be said that they are not capable of being used as such for other purposes than melting scrap. In this connection, she cites the decision of the Tribunal in the case of Bajaj Auto Ltd. as in 1995 (75) ELT 382 (T) wherein it has been held that their technical literature etc are not relevant when definition of words and expressions are clearly laid down in the statute. The Hon’ble Tribunal held that since the so-called waste and scrap was usable as sheet therefore it did not satisfy the definition under Section XV of Central Excise Tariff Act which is pari materia to the Customs Tariff Act.
6. At this point, Ld. Advocate counters that the facts in this decision are different from the facts of the present case. Firstly, the items imported are of much smaller dimensions than those of considered by the Tribunal in the case of Bajaj Auto Ltd. (supra). Secondly, in the case of Bajaj Auto Ltd., the goods were cleared for sale in the open market for home consumption. There was also evidence of actual end-use therein for the purposes other than melting scrap. As against this, the present items imported are of smaller dimensions, have been ordered for imported as bushelling scrap, and are there is no evidence that they are going to be used for any other purpose than the melting scrap. He further submits that the order impugned is highly presumptuous and objective and does not give a clear finding as to why these can definitely be used as sheets. This is evident from a plain reading of the following sentence as contained in para-13 of the order impugned which is reproduced below:
It is true that small holes are punched in the 4 corners of the sheets. There is every likelihood that these sheets though in smaller forms and in different sizes can be put to use for some purpose other than re-melting.
7. We have carefully considered the rival submissions and records of the case. We find that the matter concerns application of the definition contained in Section XV of the Customs Tariff Act to the actual goods imported. This evaluation of facts and application of definition of ‘scrap’ thereof needs to be done in a clear and objective manner. A plain reading of the sentence from the order impugned as extracted above, we are of the considered opinion that such an objective consideration has not led to a totally clear findings in this regard in the order impugned as the words used are “likely”. We also find that when the current practice of the Custom House is to obtain technical opinion from the National Metallurgical Laboratory, Madras Centre in other similar consignments, it is not fair that the appellants’ request for obtaining such a technical expert opinion was not considered. We therefore feel that the order impugned needs to be set aside and the matter remanded to the original authority for reconsideration of the same including for reconsideration of the same including on the following grounds raise by Ld. Advocate:-
(a) The expert technical opinion from the National Metallurgical Laboratory, Madras Centre or any other approved Govt. technical expert should be obtained on the goods which are still within the customs custody.
(b) While considering the import of the definition contained in Section XV of the Customs Tariff Act, the ISRI specifications noted above should also be looked into as they are generally accepted as a relevant standard in international trade.
(c) The decision of the Tribunal in the case of Bajaj Auto Ltd. cited by Ld. DR and sought to be distinct by Ld. Advocate also needs to be considered in detail.
8. Appeals are accordingly allowed by way of remand with the above directions.
9. Since the goods are in customs custody, the original authority shall proceed with these de novo proceedings as expeditiously as possible after giving opportunity for personal hearing to appellants.