The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai reclassifies used Mild Steel Plates as ‘waste and scrap’ attracting 15% duty under against tariff item 7204 4900 in First Scheduled to Customs Tariff Act, 1975.
The controversy in this appeal of M/s Rukuminirama Steel Rolling Pvt Ltd, a manufacturer of mild steel (MS) ingots and by products thereto from mild steel (MS) scrap, pig iron and heavy melting scrap (HMS), is the determination of the appropriate rate of duty on ‘used mild steel (MS) plates’ imported upon procurement of these after demolition of six ‘petrochemical tanks’ in the United Kingdom by M/s GK Middle East FZC. Customs authorities chose to classify the impugned goods against tariff item 7208 2510 of First Schedule to Customs Tariff Act, 1975 corresponding to products in prime condition instead of the declaration against tariff item 7204 4900 corresponding to ‘waste and scrap’ in First Scheduled to Customs Tariff Act, 1975.
The Counsel for the appellant, submitted that in section XV of First Schedule to Customs Tariff Act, 1975 would, save for controverting of their declaration by customs authorities on submission of their explanation of the origin of the impugned goods, mandate application of the rate of duty corresponding to tariff item 7204 4900 of First Schedule to Customs Tariff Act, 1975 and, particularly, eligibility for exemption afforded by notification no. 21/2002-Cus as claimed in the bills of entry.
The Counsel for the Revenue, relying upon the report on examination of the goods, insisted that ‘plates’ of ‘a thickness of 4.75 mm or more:’ within sub-heading 7208 25 of First Schedule to Customs Tariff Act, 1975, as held by the adjudicating authority, should prevail as more specific description of the form in which the goods were presented for import.
A Division Bench consisting of Justice Dilip Gupta, President and CJ Mathew, Technical Member held that “Not only is the revised classification inappropriate but there is also no reason for the classification sought for in the bills of entry to be substituted in view of its appropriateness; the impugned goods have industrial significance only as ‘waste and scrap’ which is the feedstock for melting in furnaces. Consequently, the eligibility for the benefit of the exemption notification as well as not being subject to the restriction prescribed in the Foreign Trade Policy on the import of used goods is established.”
V M Doiphode, appeared for the appellant and Ramesh Kumar, Assistant Commissioner (AR) appeared for the respondent
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