2008(07)LCX0123

In the Customs, Excise & Service Tax Appellate Tribunal, Mumbai

Ms. Jyoti Balasundaram, Vice President and Shri A.K. Srivastava, Member (Technical)

Vora Industries & Anr.

Versus

Commissioner of Customs (Import), Nhava Sheva

Final Order Nos. A/435-436/WZB,/2008-CI/CSTB dt. 28.7.2008 certified on 8.8.2008 in Appeal Nos. C/457-45 8/2008

Advocated By -

Shri Z.B. Nagarkar, Adv. for Appellants
Shri B.K. Singh, JCDR for Respondent

Per Jyoti Balasundaram:

Vide the impugned order the Commissioner of Customs has rejected the value of Rs. 13,11,538/- declared by the appellants herein in respect of consignment described as "Tin Free Steel sheets secondary defective" imported under Bill of Entry dated 02.01.2007; ordered re-classification of the goods as "Tin plated/coated steel sheets" under Customs Tariff Heading 72101290 rejecting the claim of the appellants for classification under CTH 72105000 which covers steel sheets "plated or coated with chromium oxides or with chromium and chromium oxides"; loaded the value of the goods to Rs. 43,24,688/-; ordered confiscation of the goods imported with option to redeem them on payment of fine of Rs. 3 lakhs; ordered recovery of differential duty of Rs. 3,73,555/- under the proviso to Section 28 (1) of the Customs Act, 1962 and imposed penalty of Rs. 3 lakhs and Rs. 2 lakhs under the provisions of Section 112 (a) of the Act on the importer and on Shri Kamal Jhunjhunwala respectively.


2. We have heard both sides.


3. We find that the goods were tested by the Dy. Chief Chemist, Mumbai and reported to be "made of steel (magnetic) coated with tin on both sides". Remnant samples were also tested by National Metallurgical Laboratory, Chennai as requested by the appellants and vide the report dated 22.11.2007 as amended by the report dated 18.12.2007 the NML, Chennai also confirmed that the goods are coated with tin, but have stated that based on the tin coating weight the goods cannot be classified as tin coated steel as per IS 1993:1993 specifications. The importers got the samples tested from two different private agencies, namely, Shriram Institute for Industrial Research and The Tinplate Company India Limited wherein it was certified that there is a chromium oxide in coating material as against the tin coated material found by the Dy. Chief Chemist. The test was conducted by the private institutions without the samples having been duly authenticated by the department before testing and hence these two reports cannot be relied upon. The Customs Tariff Act, 1975 read with Chapter Notes and Explanatory Notes do not specify any particular percentage of tin required as coating in order to treat the goods as tin plated/coated plates or sheets for the purpose of classification. Therefore, though the said goods may not confirm to the IS standards the same are still classifiable as tin coated steel for the purpose of classification and assessment under Customs Tariff Act, 1975. As regards the claim of the importers that the goods were defective in nature, the visual examination thereof shows that the steel sheets were of even coating and smooth surface and were in proper and uniform packaging. Hence they are to be treated as of prime quality.


4. On the issue of valuation, we find that the imported goods have been compared with contemporaneous import of plain electrolytic tin plate coils. The contention of the importers that they are not comparable requires to be rejected for the reason that the plain electrolytic tin plate coils fall for classification under 712101210 which covers flat rolled products of iron or non-alloy steel clad, coated/plated with tin of a thickness of less than 0.5 mm and of OTS/MR Type and the goods under import are also flat rolled products of non-alloy steel found to be coated with tin of a thickness of less than 0.5mm but other than OTS/MR Type. Therefore, the enhancement of the value of the goods also calls for no interference. In view of these findings penalty on Vora Industries is warranted.


5. Shri Kamal Jhunjhunwala, of M/s. Evergreen Drums and Cans Pvt. Ltd., had assisted Mr. Nitin Vora, proprietor of Vora Industries in perpetuating the scheme of duty evasion by providing Vora Industries with import documents containing mis-declaration of the description and value of the imported goods. He had himself negotiated with the supplier/ exporter for supply of the goods and had also signed high sea sale agreement with the importer for sale of goods declared as "tin free steel sheets defective secondary" which was actually found to be "tin coated steel sheets". He has, therefore, been rightly held to be liable for penal action.


6. We, therefore, uphold the impugned order in so far as it relates to classification, valuation and confiscation. However, having regard to the totality of the facts and circumstances we reduce the penalty on M/s. Vora Industries to Rs. 1,50,000/- and on Kamal Jhunjhunwala to Rs. 1,00,000/-.


7. The appeals are thus partly allowed as above.

Pronounced in Court.

Equivalent 2008 (088) RLT 0412 (CESTAT-Mum.)

Equivalent 2009 (233) ELT 0354 (Tri. - Mumbai)