Order date – 29 September 2022

Facts – 

• The Appellant, Rukminirama Steel Rollings 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, Ajman.
• 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.
• Commissioner held the goods imported valued at ₹ 77,77,300, liable for confiscation under section 111(d) of Customs Act, 1962 but offered to be redeemed under section 125 of Customs Act, 1962 on payment of fine of ₹ 7,70,000 besides imposing penalty of ₹ 1,00,000 under section 112 of Customs Act, 1962 on the appellant.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the impugned goods falls under the tariff item 7208 2510 or 7204 4900 of First Schedule to Customs Tariff Act, 1975?

Order – 

• The Tribunal on scrutinising heading 7208 of First Schedule to Customs Tariff Act, 1975, within which the impugned order has placed the goods imported by the appellant, it was observed that the description has been sub-classified at the eight digit level for one item and, for all other items, as seven enumerations ‘in coils’ and four enumerations for those ‘not in coils’, at six digit level and the adopted item lies with the first of these but, nonetheless, comprising ‘flat-rolled products’ ‘hot rolled’ in ‘coils’ without any explanation for concluding that the plates were presented as coils.
• Clearly, the classification adopted in the impugned order does not relate to the description of the product as imported and presented.
• The Tribunal held that 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.
• Appeal allowed.