Law: Income Tax Act, 1922

Section:

Customs Act 1969 (IV of 1969) - PCT heading 7204-4900 - Waste and scrap - Serviceable auto pens - Classification of imported goods - Question of fact - Petitioner imported waste and scrap of iron and steel - After arrival of goods at Karachi, petitioner Informed that 95% of the consignment consisted of serviceable auto parts and the same were liable to confiscation - Classification of waste and scrap Whether a question of fact - Held yes - Such articles which can be used for any other purpose - Whether could be called scrap - Held no - Word scrap meaning of. As would appear from the various dictionary meanings assigned to the word "scrap" the said word refers to waste material or used articles, The different meanings referred to above further Indicate that only such material which no longer can be used in the same form can be called scrap. Such material would also include metal from worn out machines, vehicles or automobiles. The only value left in such material must be for reprocessing purposes or for being used as an Ingredient in the making of steel. While judged from this angle, classification of auto-parts as scrap can sometimes pose a problem because, on the one hand such parts are recovered from automobiles which cannot be used again in their original form but on the other hand the parts recovered may retain some serviceability in them. The consensus, however, appears to be that only such articles which cannot be used for purpose other than waste and scrap can be classifiable as such. However, if such articles can be used for any other purpose the same, in our opinion, cannot be called scrap. In case of auto-pans, any element of serviceability still retained by them, in such circumstances, would be of no consequence unless they are found to be capable of use other than that as scrap; however, this is a pure question of fact which has to be determined by the Customs Authorities themselves. As the goods have already been examined, as pointed out earlier, further action by the Customs would depend upon their decision in the Light of this . We would however like to point out that such questions must be determined by the Customs Authorities as expeditiously…

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