1. This is a department's appeal filed against the decision of the Collector of Customs (Appeals), Mumbai made in Order No. 14/85 Rajkot, dated 19-12-1985 whereunder he allowed the appeal of the respondent holding that the bill of lading weighment is a case of guess work and weighment on the basis of out turn report given by Bhavnagar Port based on draught weight of the imported bulk cargo should be accepted and that benefit of Notification No. 151/77-Cus., dated 15-7-1977 as amended by Notification 35/82, dated 28-2-1982 he made available to the Respondent.
2. The facts of the case are that the respondent imported melting scrap of iron or steel at Bhavnagar Port. The IGM of the vessel showed that a quantity of 3299.500 MT per MV. AGORES. The quantity of the bill of entry was supported by certificate of inspection, certificate of weight, certificate of origin, invoice, bill of lading, certificate of sale by MSTC and quantities shown in IGM. The quantity was never disputed by the respondent. It is to be pointed out that melting scrap of iron or steel when imported into India is exempted under Notification 151/77 as amended by Notification 35/82 provided the same is in fact used in their electric arc furnace. The respondent has availed of the exemption by producing certificate given by Central Excise Authority and executing a bond regarding compliance of the conditions. The respondent cleared the goods and it is evidenced by the endorsement to the effect by the Port authorities. The respondent produced end use certificate given by Iron and Steel Control Authorities indicating shortage in the quantity i.e. about 32.74 MT. A demand was raised by the Assistant Collector. The Assistant Collector confirmed the demand against which appeal was filed before the Collector of Customs (Appeals), Mumbai. The Collector (Appeals), Mumbai has held that there could be no nexus between the draft weighment of the imported metal scrap and utilised melting scrap used in the electric arc furnace. Since at the time of melting of scrap from the ship on anchorage certain natural losses took place. Moreover, the draft weighment is only an appreciation and not actual weighment. He also relied on the practice available at Mumbai and Kandla, viz.
acceptance of out turn given by the port authorities. He also held that in Bhavnagar Port no weigh bridge has been installed and therefore the out turn given by the port authorities on the basis of the draft report should be accepted. Obviously he held that the weight could not have any nexus with the actual weighment of metal scrap which alone could be utilised by the importer's mini steel plant. He therefore held that the respondent was entitled to the benefit of notification. Hence the present appeal.
3. It is contended by the department that the respondent had not produced end use certificate in full quantity. Therefore the demand confirmed by the Assistant Collector is correct. It is argued by the department that the reasons advanced by the Collector (Appeals) that there could be no nexus obviously between the draft weighment of the imported metal scrap with that of the actual melting scrap utilised in the electric arc furnace since at the time melting scrap is discharged from the ship at the anchorage certain natural losses could have occurred and moreover draft weighment would always be approximate weighment and not actual weighment. The department also contends that the reliance of the practice available in Mumbai and Kandla Port is based only on hearse evidence. The department also relies on the provisions of Section 145 of the Customs Act, 1962 regarding the weightment of the goods to controvert the observations of the Collector (Appeals)'s contention regarding the weighment of the goods, viz.
application of the customs to make available facilities for weighment of the goods. It is also contended that the certificate issued by the Iron and Steel .Control Authority shows that total quantity was 3299.500 and total quantity received was only 3266.755 MT showing the deficit of 32 MT. Therefore, the conditions contained in the exemption Notification 151/77 had not been complied with. The respondent did not appear and we have gone through the papers.
4. In this case quantities of 4378.350 MT of melting scrap and 3299.500 MT melting scrap of iron and steel have been imported. It is seen from the certificate of Iron and Steel Controller that the quantities received were respectively 4364.095 and 3266.755. Both show as against the manifest quantity, the utilised quantity showed less. The Notification 151/77 dated 15-5-1977 states inter alia that if the melting scrap of iron or steel (other than stainless steel or heat resisting steel) etc., is used in the electric arc furnace then the rate of duty will be nil. Here the draught survey shows that they had cleared 4378.500 and 3299.500 MT-of the scrap. The actual end use certificate discloses a quantity of 4364.095 and 3266.755 showing a difference of 14.255 and 32.745 MT of quantities. The argument of the Collector (Appeals) is as indicated above however he failed to take note of the certificate given by the Ministry of Steel and Mines regarding end use. This shows that the actual quantity received was less than what it was claimed. This the Collector (Appeals) has failed to take note of. It is also to be stated that the Collector (Appeals) has sought to rely on the practice followed in Mumbai and Kandla Ports which in our view may not be relevant to the facts of this case. The observation of the Collector that the certificate given by Iron and Steel Controller was based on actual utilisation of such melting scrap and the weighment done in the factory has no nexus with the original weighment based on case work which in our view is not a correct one.
The words mentioned in the notification clearly says that the imported material must be for use in the electric arc furnace. We therefore feel that the reasoning adopted in the appellate order passed by the Collector (Appeals) is wrong.
5. We therefore allow the appeal of the department setting aside the Collector (Appeals)'s order.