1. M/s. Premier Brass & Metal Works Pvt. Ltd., Seksaria Chambers, (3rd floor), 139, Nagindas Master Road, (Medows Street), Fort, Bombay-23 has filed an appeal being aggrieved from the order passed by the Collector of Customs, Bombay. Briefly, the facts of the case are that M/s.
Premier Brass & Metal Works Pvt. Ltd. had imported two consignments said to contain Brass Ash/Dross. Two Bills of Entry were filed. Vide Bill of Entry No. 1957/176 for 36 drums weighing 19596 kgs./43202 pounds having CIF value of 2,08, 579/-. These goods had arrived per S.S. IBN ABDOUM. Vide Bill of Entry No. 2065/111 for a consignment of 74 drums and had declared that the same was containing 40735 kgs. of Brass Dross/Ash. This consignment has arrived per S.S. AFAFAT and the declared CIF value was Rs. 5,60,574/-. Both the consignments were examined and the representative samples were sent for testing to Dy.
C,C, Bombay. In the Custom House Laboratory report in Bill of Entry No.1957/176 the content percent of copper compound was found to be 61.4% and in Bill of Entry No. 2065/111 the percentage of copper compound was found to be 56.6%. The importers were not satisfied with these reports so they requested again for retest and the samples were sent to CRCL, New Delhi and the Chief Chemist in his letter C.No. 33-Cus/85 dated 11th September, 1985 reported that in case of sample drawn for Bill of Entry No. 1957/176 average of total metal content was found to be 95.83% by weight and in case of sample drawn for goods covered by Bill of Entry No. 2065/111 average of total metal content was found to be 93.52% by weight. It was further reported that in cases of goods covered by both the Bill of Entries although there was presence of a little oxide, on the whole each sample was almost entirely metallic in nature and each contained some scrap pieces and, therefore, the samples did not possess the characteristic of dross and each sample could be considered as Brass Waste/Scrap and as such what was imported was Brass Waste/Scrap and an attempt was made to clear it in the guise of Brass Dross. Rate of duty leviable on Brass Dross was 40% + 30% (forty percent plus thirty percent) and on Brass Waste/Scrap it was 85% + 40% + CVD Rs. 3300/- per MT. The Revenue authorities are of the view that the goods were liable for confiscation under Section lll(m) of the Customs Act, 1962. It was also found by the Adjudicating authority that Bill of Entry No. 1957/176 and LC No. 181/10/84 dated 3rd October, 1984 were invoiced at US $ 0.40 per pound CIF Bombay whereas goods covered by Bill of Entry No. 2065/111 were invoiced at US $ 0.50 CIF, Bombay.
Both the imports were contemporaneous and supplied by the same supplier to the same importer and the composition was almost the same and the price of both the consignments should be US $ 0.50/pound CIF, Bombay.
Thus it appears that there was mis-declaration of the value of goods in respect of Bill of Entry No. 1957/176 with an intention to evade customs duty and as such the goods were liable for confiscation under Section lll(m) of the Customs Act, 1962. The appellants had waived the issue of show cause notice. The appellants vide their letter dated 22nd July, 1985 disputed the finding of analytical test report given by the Customs House Laboratory and requested to forward the samples for test to CRCL, New Delhi. The appellants had also contended that the samples were not properly drawn and they should be allowed to re-draw the samples. In their presence the adjudicating authority had rejected their request. The Collector of Customs had ordered the confiscation of the goods under Section lll(m) of the Customs Act, 1962 but had given an option to redeem the same in respect of Bill of Entry No. 1957/176 on a payment of fine of Rs.1,00,000/- and Bill of Entry No. 2065/111 on payment of redemption fine of Rs. 2,80,000/-. He had also imposed a penalty of Rs.10,000/- and 25,000/- respectively and had further ordered that the goods for both the Bill of Entries were to be assessed as Brass Scrap/Waste and had further ordered that the value of the goods in respect of Bill of Entry 1957/176 should be enhanced to US $ 0.50 per pound. Being aggrieved from the aforesaid order the appellants has come in appeal before the Tribunal.
2. Shri V. Lakshmikumaran, the learned Advocate has appeared on behalf of the appellant. He has reiterated the contention made in the appeal.
He has pleaded that the appellants had imported Brass Ash/Dross and not Brass Metal/Scrap. He has made a prayer before the Bench for the drawing of the fresh samples as the original samples were not taken properly. Shri Lakshmikumaran, the learned Advocate pleaded that in the present matter classification as well as valuation was involved in the 1st consignment the declared value is US $ 0.40 per pound and the second consignment the value is declared is US $ 0.50 per pound and in the first Bill of Entry the value has been enhanced to 0.50 and in the second consignment the value has been accepted vide Bill of Entry No.1957/176 dated 12th December, 1984 and the Bill of Entry No. 2065/111 dated 3rd January, 1985. At this stage Shri C.V. Durghayya, the learned JDR raised a preliminary objection that in the appeal memo no valuation plea has been taken. Shri Lakshmikumaran, the learned Advocate has argued that the revenue has assessed the same under Chapter 74.01/72 as Brass Scrap whereas the appellants claim is under Heading 26.02/04 as Brass Dross. He has referred to the paras 2, 3 and 4 of the Statement of Facts. He has pleaded that the remnant sample did not represent the true sample. To this Shri Durghayya, the learned JDR categorically stated that the samples were sent on the request of the appellant. Shrf Lakshmikumaran, the learned Advocate argued that the description under Heading 2602/04 is slag ash and residues containing metal or metallic compounds. He has also referred to Explanatory Note 2603 of BTN. He has further referred to 74.01/02 BTN and has pleaded that the goods have to under go melting process and correct classification should be under Heading 26.02/04. If the goods have to undergo imported mechanical process then the same will fall under Heading 74.01/02. Shri Lakshmikumaran has argued that the trade parlance have to be looked into. In support of his argument he has referred to a judgment of the Supreme Court in the case of Collector of Customs, Bombay v. Swastic Woollen (P) Ltd. reported in 1988 (37) ELT 474 (SC). He has also referred to internal page 3 of the order in original where there is an observation that where the similar goods imported from the same suppliers against various letters of credits opened on or around the same time, the goods on second chemical test by CRCL were found to be as per declaration i.e. Brass Ash/Brass Dross. He has pleaded that the samples were not drawn properly. Shri Lakshmikumaran, the learned Advocate has pleaded that the whole consignment has to be seen and the fresh sample has to be taken and the report of the chemist should be received a committee may also be made for the inspection of the goods.
He has also referred to the observation of the AC/Docks twice he had written that the goods are Dross. He has further argued that if at all there is any Brass Scrap the Brass Scrap and Ash have to be assessed separately. In support of his argument he has referred to Mc-Graw-Hill Dictionary of Scientific and Technical Terms, Forth Edition. He has pleaded for the acceptance of the appeal.
3. Shri C.V. Durghayya, the learned JDR who has appeared on behalf of the respondent has argued that the issue to be decided is whether the goods imported are Brass Dross/Ash or Waste/Scrap. Shri Durghayya, the learned JDR stated that no reliance should be placed on the opinion of the A.C. Docks as he is not a technical expert. Samples were not drawn in the presence of the importers and the samples are the true representative samples. Shri Durghayya has referred to appellant's letter dated 19/22-7-1985. He has laid special emphasis on the wording of that letter "we request you to please send our goods to Chief Chemist, New Delhi for re-test and to prove the fact that they are Brass Dross". Shri Durghayya has pleaded that the samples were sent on the request of the appellant for re-test. He has also referred to another letter dated 22nd April, 1985. Shri Durghayya, the learned JDR has relied on the report of the Chief Chemist dated 11th September, 1985. He has pleaded that the technical literature does not help the appellant in any way. There is no definition of scrap. He has pleaded that the judgment of the Supreme Court in the case of Swastic Woollen (P) Ltd. reported in 1989 (39) ELT 474 (SC) does not help the appellant as the facts are different and trade parlance has been discussed in a different context. Shri Durghayya, the learned JDR has opposed the appellants prayer for taking the fresh sample at this stage and there is no necessity of referring to form any committee and interpretative rule 3 of the Customs Tariff Act is not applicable here. He has pleaded for the dismissal of the appeal.
4. Shri V. Lakshmikumaran, the learned Advocate again pleaded that the Assistant Collector is a quasi-judicial authority he cannot abdicate his functions. He has referred to para No. 4 of the Supreme Court judgment and stated that trade parlance has full relevance and further argued that there is no attempt by the revenue authorities for ascertaining whether it is Brass Scrap/Waste or Brass Dross. He has pleaded that the report of the Chief Chemist is not correct. He has pleaded for the acceptance of the appeal.
5. We have heard both the sides and have gone through the facts and circumstances of the case. We have also perused the statement of facts, grounds of appeal and the relief claimed in the appeal. The appellant has not challenged valuation aspect at all anywhere. Shri Lakshmikumaran, the learned Advocate had argued on the valuation aspect and Shri Durghayya, the learned JDR had opposed the argument of the learned Advocate on the ground that it was not open to the appellant to argue on this point as this issue was not raised in the grounds of appeal and it was raised for the first time in the arguments before the Tribunal. The applicant has not filed any application seeking the permission of the Tribunal for amending its grounds of appeal.
Apparently, it is a fresh ground which has been taken before the Tribunal. The powers of the Tribunal that expressed in widest possible term are restricted to the subject-matter of the appeal by virtue of the word "thereon" used in the provisions. This view was expressed by the Hon'ble Supreme Court in the case of Hukumchand Mills Ltd. v.Commissioner of Income Tax reported in 1967 AIR (S.C.) 455. Hon'ble Gujarat High Court in the case of Commissioner of Income-tax, Gujarat v. Orient Prospecting Co. reported in (1983) 141 ITR 301, had also observed that if the new grounds seeks to a large scope of the appeal it cannot be terminated. There is no ground of appeal before us. Only an oral submission by Shri V. Lakshmikumaran, the learned Advocate on the valuation aspect. Accordingly, we do not find any justification in permitting the appellant to urge at this stage. Accordingly, we are not giving any finding on the valuation aspect. Now coming to the merits of the case we would like to observe that in the Bill of Entry the appellants had given the descriptions Brass Ash/Dross and in the invoice also the description was given Brass Ash/Dross with minimum metallic content of 85% as per our sales contract No. 182/11/84 dated 3rd November, 1984. We have also gone through the BTN Section V, heading 26.03 of BTN Page 188 of EN/AS20, May 1975. Shri Lakshmikumaran, the learned Advocate had placed heavy reliance on the same. We have to resort to BTN as a guide we have to strictly go to the tariff. There is no definition. Shri Lakshmikumaran's argument that waste is derived from the mechanical working metal of scrap which consists of iron out of broken out metal which excluded the second examination of the goods was done on the request of the appellant vide appellant's letter dated 19/22-7-1985 had requested for the examination. Para 2 from the said letter is reproduced below :- "The test report has been already received showing all the properties of Brass Dross and in amplification to the description, Dy. Chief Chemist says that this is Scrap/Waste; since we are not satisfied as the goods having the properties of Brass Dross (with Copper percentage 56.6%) and having different description other than mentioned in the documents. Under the circumstances, we request you to please send our Goods to Chief Chemist, New Delhi, for re-test and to prove the fact that they are Brass Dross." 6. Shri Lakshmikumaran, the learned Advocate during the course of arguments has made prayer for the re-testing of the samples and also appointing of a committee of the testing of the same. He has cited a decision of Tribunal in Misc. Order No. 206/87-B2. The facts and circumstances are different. Second examination from the Chief Chemist was done on the request of the appellants himself. We do not find any justification in accepting the prayer of the appellant for the third re-test at this stage. The prayer is rejected.
7. The Chief Chemist's letter dated 11th September, 1985 is reproduced below:- "Please refer to your letter F.No. SG.Misc.68/85A dated 20-8-1985 on the above subject.
The two remnant samples pertaining to B/E No. 1957/176 and 2065/111 of M/s. Premier Brass and Metal Works Pvt. Ltd., Bhopal, received vide R.P. No. 1689 and 1688 under cover of the above cited letter have been registered here under C.L.R. 59 and C.L.R. 60 dated 4-9-1985 respectively and analysed with the following results :- Each of the two samples is in the form of heterogeneous mixture consisting of (i) mainly small flattened metallic pieces of irregular shapes and sizes with greyish black as well as more or less clean yellowish and reddish surface. Some of the pieces can be identified as derived from scraps and wastes and (ii) metallic powdery material associated with small needle-like metallic particles with greyish black and shining metallic surface, together with some extraneous matter.
The two portions (i) and (ii) separated by sieving from each sample, have the following net weights and percentage compositions by weight :-Net weight...
428.0 gms.
295.0 gms.Copper ...
60.22 62.09Zinc ...
31.64 30.60Lead ...
2.15 1.81Iron ...
0.58 0.81Tin & Silicious matter 0.42 1.65Total of metal estimated 95.01% 97.03%_________________________________________________________________________ Combining the portions (i) and (ii) in this case average of total metal content works out to be 95.83% by weight in the sample.C.L.R. 60 - B/E No. 2065/111Net weight...
328.0 gms.
277.0 gms.Copper ...
56.95 56.02Tin & silicious matter 3.04 2.55Total of metal estimated 95.35% 91.38%_________________________________________________________________________ Combining the portions (i) and (ii) in this case average of total metal content in the sample works out to be 93.52% by weight.
Extraneous matter would appear to account for the remainder in each of the portions (i) and (ii) of both the samples.
Although there is presence of a little oxide and sulphide impurities and extraneous matter in each case, on the whole each sample is almost entirely metallic in nature and each contains some scrap pieces. Therefore each of the two samples does not posses the characteristics of dross. Each sample can be considered as Brass Waste/Scrap.
Sealed remnant samples sumbering two are being returned to you separately by RPP." A simple perusal of the same shows that the content of the metal in small flat pieces and scrap is 95.01% and in the powdery material is 97.03% in respect of Bill of Entry No. 1957/176 and in respect of Bill of Entry No. 2065/111 small flat pieces and scrap metal content is 95.35% and in the powdery material content is 91.38%. The appellant has claimed the assessment under heading 26.02/04 relates to Slag, Ash and residues containing metals or metallic compounds. The Revenue has assessed the imported goods under Chapter 74.01/02 which relates to copper metal, unwrought copper (refined or not); copper waste and scrap. The Chief Chemist in his letter dated 11th September, 1985 has also observed that there is presence of a little oxide and sulphide impurities and extraneous matter in each case; on the whole each sample is almost entirely metallic in nature and each contains some scrap pieces and that each of the two samples does not posses the characteristics of dross and each sample can be considered as Brass Waste/Scrap. During the course of arguments Shri Lakshmikumaran, the learned Advocate had argued that the brass scrap/that metallic pieces as well as powder material should be assessed separately. We do not find any force in the same. The metal content is more than 91% with little presence of settle prevails oxide and sulphide. Shri Lakshmikumaran, the learned Advocate has referred to the judgment of the Supreme Court in the case of Collector of Customs, Bombay v.Swastic Woollen Pvt. Ltd. reported in 1988 (37) ELT 474 (SC) and laid special emphasis on para No. 4 of the said judgment where the Hon'ble Supreme Court had observed that where no statutory provided in the Customs Act or the Central Excise Act, the trade understanding, meaning thereby the understanding in the opinion of those who deal with the goods in question is the safest guide. As already discussed above the metal content is more than 91%. The Supreme Court judgment cited by the learned Advocate is not applicable in this case as the facts are different. Interpretative Rule 3A provides that most specific definition shall be preferred to headings providing a more general description. The metal content in the matters before us varies from 91.38% to 97.03%. Accordingly, we uphold the findings of the Collector and hold that the goods are to be assessed under Chapter 74.01/02. In the matter before us the goods are under detention. The goods were imported in December, 1984 and January, 1985. Now it is 1989. The appellant must have suffered a lot. The revenue while imposing fine and penalty has not given any basis as to the levy of the same. There is also no calculation of expected margin of profit by the appellants. The Tribunal in the case of Mudeeresware Mining Industries Co., Bangalore v. Collector of Customs, Bangalore - 1989 (39) ELT 630 (Tri.) in appeal No. C/3531/87-A, Order No. 197/88-A dated 9th March, 1988 had reduced the redemption fine from Rs. 50,000/- to Rs. 25,000/- on the ground that the machine on its importation had remained under detention.
Keeping in view the facts that the goods are under detention we reduce the fine in lieu of confiscation from Rs. 1,00,000/- to Rs. 50,000/- in respect of Bill of Entry No. 1957/176 and in respect of Bill of Entry No. 2065/111 from Rs. 2,80,000/- to Rs. 1,40,000/-. The Collector had imposed personal penalties in respect of Bill of Entry No. 1957/176 at Rs. 10,000/- and in respect of Bill of Entry No. 2065/111 at Rs. 25,000/-, and we hold that these are not excessive. Except for these modifications made above the appeals are otherwise rejected. The revenue authorities are directed to give consequential effect to this order.