Directorate General of Valuation Central Board of Excise & Customs Government of India

Order Nos. A/1730-1731/2004-WZB/C-1,dated 19-10-2004 in...

Order Nos. A/1730-1731/2004-WZB/C-1,dated 19-10-2004 in Appeal Nos. C/260-261/2004-Mum

2005 (183) E.L.T.52 (Tri.-Mumbai)

IN THE CESTAT,WEST ZONAL BENCH, MUMBAI

S/Shri Krishna Kumar, Member (J) and Moheb Ali M.,Member(T)

DHIRUBHAI M. SHAH

Versus

COMMISSIONER OF CENTRAL EXCISE, RAJKOT

Order Nos. A/1730-1731/2004-WZB/C-1,dated 19-10-2004 in Appeal Nos. C/260-261/2004-Mum..

Valuation (Customs)-Scrap- plastic scrap misdeclared as rubber scrap removed from Free Trade Zone- When no evidence of domestic price of plastic scrap, which ordinarily otherwise should have been taken into account, brought out either party, the department has to arrive at valuation on basis of tangibledataavilable with it, though this ratio not application when circumstances not similar, or value determinable by any other means-Section 14 of customs Act, 1962.-Authorities adopted the value at which similar goods were imported. The appellants did not Produce any evidence before the lower authorities as to what according to them is the correct value.Plastic scrap is not a regular item of import nor is easily ascertainable particularly when the imports are restricted.We agree that while valuing the goods domestic price for similar goods should have been taken [para 10]..

REPRESENTED BY:Shri j. Arthur prem, Advocate, for the Appellant.

Shri K.K.Srivastava, SDR, for the Respondent.

( Order per: Moheb Ali M.,Member (T).-.M/SAmbica Scrap Recy-cling pvt Ltd and its Director are the appellants.

  1. The appellant had a factory in KFTZ (Now KASEZ) and were engaged in recycling of various types of ferrous/ Non- ferrous metal scrap. For this purpose, they imported various types of cable scrap, Aluminium, Copper, brass mild steel scrap etc and re-exported the processed final products. The scrap that generated out of this process consisted of outer casting of the cabled wire. The appellants sought permission to clear it from describing it as rubber scrap on payment of appropriate duty.Permission was granted.The appellants removed 12.500MTS of scrap it appeared that the goods were examined before clearance .The trucks that were used for removing the goods were intercepted outside KFTZ,samples of the material were drawn in the presence of panchas on 1-1-2000 and 4-1-2000 and sent for for analysis. The test resulted in the finding that the trucks were carrying plastic scrap but not rubber scrap as declared by the appellants. It may be said that the goodswere assessed as rubber scrap as per the declaration made by the appellants and duty of Rs. 14,581/- was paid before it was removed.Statement of various persons involved were recorded.On the basis of evidence a show cause notice was issued asking the appellants as to why-

(a)the goods in question should not be confiscated under Section 111(m) of the Customs Act read with Rule 173Q(1)(a)(b) &(d)of the Central Excise Rules,1944;

(b)the goods in question should not be classified under Custom Tariff heading 3915.90 as plastic scrap;

(c)the plastic scrap being restricted for import should not be confiscated under section 1d11(d)of the Customs Act,1962;

(d)the unit price of plastic scrap should not be taken as US$200 PMT and appropriate beduty not recovered under Section 28 of the Customs Act and under Section 11A of the Central Excise Act;

(e)the trucks used for carrying the said goods should not be confiscated under Section 115(2) of the Customs Act;

(f)why penalties under Section 112(a) and (b) and under Rule 173Q(1)(a) and (b) and (d) should not imposed.

  1. The case was adjudicated by the joint Commissioner.

He invoked the provisions of both Customs Act and Central Excise Act and the Rules made thereunder both to demand the differential duty, to impose penalties after classifying the goods under Customs Tariff.He also valued the goods in question to be US$ 200 PMT. In appeal, the Commissioner (Appeals) confirmed the order of the lower authority except that the reduced the penalty on the company from Rs.50,000/- to Rs.25,000/- Hence these appeals.

  1. Heard both sides..
  2. In regard to valuation, the authorities adopted the value at which similar goods were imported.The appellants did not produce any evidence before the lower authorities as to what according to them is the correct value. Plastic scrap is not a regular item of import nor is easily ascertainable particularly when the import are restricted. We agree that while valuing the goods domestic price for similar goods should have been taken.But no evidence has been brought out by either party as to what the domestic price is.In a situation of this type, value has to be arrived at on the basis of tangible data available with the Department. But we may caution that this ratio is not applicable when circumstances are not similar or when value can be determined by any other means.
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DHIRUBHAI M. SHAH Versus COMMISSIONER OF CENTRAL EXCISE, RAJKOT