Full Judgment
2. The relevant facts leading to the passing of the order are that the appellant sought the clearance of the goods as "scrap" and declared a value of about Rs. 22 lakhs. This worked out to a unit value of US $ 1030 MT. The declaration of value and description was based on invoice issued by the supplier, namely M/s. Universal Impex Corporation, UAE.3. Examination of the goods by the Customs showed that the goods were not scrap but were serviceable brass tubes, etc. The relevant extract from the examination report is reproduced below :- "Inspected lot opened and examined all. Checked description and found that goods are consisting of 22 MT of Brass Tubes of long length and serviceable in nature. But not new one and 8 MT round of the goods are brass slabs like. Therefore, the goods cannot be treated as scrap. There is no live arms/ammunition/other metal found. Examined the goods under DC/Docks supervision and approval on hard copy. Bill of entry forwarded to GR for necessary action at their end." 4. Thus, the examination of the goods revealed that the goods were not "scrap" as declared; but were serviceable goods. This finding based on the physical examination of the goods was confirmed by the fact that the goods were of Russian origin, they had been purchased by M/s. Eltik Ltd. and transported to Germany. Subsequently, the appellant's supplier, shipped the goods to Mumbai and in the Certificate of Origin issued by the Chamber of Commerce and Industries, Russia, the impugned goods were described as brass tubes and brass bushes. The classification indicated in the Country of Origin certificate was also for tubes and articles and not of scrap. It was also found that the inspection certificate issued by M/s. SGS Germany also treated the goods as brass tube and brass bushes and not scrap. The impugned order relied on these materials for reaching the conclusion that the goods had actually been mis-declared with regard to description and value making them liable to confiscation under Sections 111(d) and (m) of Customs Act, 1962. Having rejected the declaration, the impugned order proceeded to fix the assessable value at the rate of US $ 1700 MT for tubes and US $ 1600 MT for bushes and to confiscate the goods etc.
5. We have perused the records and have considered the submissions made by the learned Counsel for the appellants and the learned SDR for the Revenue. The contention of the appellant is that the goods had been purchased by him only as scrap and the price declaration was the transaction value. It is submitted that in terms of Rule 4 of the Customs Valuation Rules, the goods have to be assessed to duty at the transaction value. With regard to the description of the goods, the submission is that scrap consists of goods which were earlier used in various capacities and upon losing those commercial identities, they could be treated only as scrap. As against this, the learned DR has pointed out that the entire evidence points only in the direction that the goods in question were actually brass tubes and brass bushes and the invoice and contract had been issued by the appellant's supplier at Dubai only to facilitate the clearance of goods on payment of lesser duty. He has pointed out that since the goods were originally shipped from Russia as brass tubes and brass bushes and inspection in Germany had confirmed them to be so, there was nothing to indicate that during shipment from Antwerp to Mumbai, the goods became scrap. The learned DR also pointed out that it is well settled that once goods are found to mis-declared, the value declared has to be rejected, and value of goods determined under Valuation Rules [Unitop Office Automation v. CC Delhi - 2001 (135) E.L.T. 1368]. The learned DR submitted that no interference with the impugned order was called for since the findings in the impugned order were well supported by documentary evidence.
6. We are unable to accept the contention raised by the appellant. It is not in dispute that the goods were transported as manufactured goods when they were originally sent from Russia to Germany. There is nothing on record to show how those goods became scrap on their shipment from Antwerp to Mumbai. The Country of Origin certificate issued from Russia where the goods originated, the examination report in Germany (transit) and the examination report of Indian Customs are all unanimous that the goods are serviceable tubes and bushes. In these circumstances, we find no reason to disagree with the findings in the impugned order that the description of the goods was mis-declared. Once the nature of the goods has been mis-declared, it follows that the value declared also cannot be accepted. Therefore, the order cannot be faulted for re-fixing the assessable value in accordance with the provisions of Customs Valuation Rules. The appellants also have not shown any material that the revision of value made by the customs authorities is not correct. We find that the enhancement of value is only by 60-70% which is a reasonable difference between the value of original material and scrap.
We do not find any reason to interfere with the valuation also. The enhanced value of goods comes to about Rs. 33 lakhs. The redemption fine imposed is only Rs. 6.5 lakhs and penalty is only Rs. 65,000/-.
Keeping the nature of the offence involved and the differential value, the fine and penalty are quite low.
7. In the light of what is stated above, we find no reason to interfere with the impugned order. It is accordingly confirmed and the appeal is rejected.