Custom, Excise & Service Tax Tribunal
Seema Intermet Pvt. Ltd vs Commissioner Of Customs (I), Nhava ... on 10 March, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/1168/06-Mum (Arising out of Order-in-Original No. S/26-Misc-205/2006 Gr.IV // S/10-Adj.-457/2006 Gr.IV dated 20.7.2006 passed by Commissioner of Customs (Import), Nhava Sheva) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Seema Intermet Pvt. Ltd. Appellant Vs. Commissioner of Customs (I), Nhava Sheva Respondent Appearance: Shri Anil Balani, Advocate, for appellant Shri S.J. Sahu, Assistant Commissioner (AR), for respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 20.2.2017 Date of Decision: 10.3.2017 ORDER NO Per: M.V. Ravindran
This appeal is directed against order-in-original No. S/26-Misc-205/2006 Gr.IV // S/10-Adj.-457/2006 Gr.IV dated 20.7.2006.
2. The issue that falls for consideration is appellant herein imported a consignment of zinc dross shelf and filed a bill of entry. Lower authorities examined the consignment and the goods were found to be in slab form, each slab weighing more than 500 kgs. (approximately), holding that as per ISRI zinc dross shelf, the scrap should be poured in moulds or in small moulds weighing not more than 75 pounds and zinc shall be minimum 85%, a sample was drawn and sent for analysis. Deputy Chief Chemist, on analysis, reported that the zinc content of sample is 89.9%. Arriving at a conclusion that since the slab is weighing more than 500 kgs., it does not conform to ISRI condition in respect of weight, the goods were seized and they were released provisionally. It is the contention of the lower authorities that the goods appear to be classifiable under CTH 79020090 and are restricted for import and the appellant having not produced any import licence, the goods are liable for confiscation. Adjudicating authority, after following due process of law, accepted the fact that the zinc content of the consignment is in accordance with the requirement of ITC (HS) classification 79020010, but the weight being 500 kgs. per slab, they cannot be classified under 79020010, classified the goods classification under ITC (HS) 79020090, the adjudicating authority held that the goods are liable for confiscation, confiscated the same under Section 111(d) of the Customs Act, 1962 with an option to redeem the same on payment of redemption fine of Rs.2,00,000/- and also imposed penalty of Rs.25,000/-.
3. Learned counsel draws our attention to the findings and submits that the ITC (HS) classification of 79020010 clearly covers their case and the ISRI definition of zinc dross shall also be applicable to them. He relies on the decision of the Tribunal in the case of Varun Aluminium Industries Ltd. vs. CC, Nhava Sheva 2002 (141) ELT 238 and Hiren Aluminium Ltd. vs. CC, Nhava Sheva 2003 (158) ELT 237, for the proposition that ISRI specifications are merely guidelines and variations to specifications permissible subject to agreement between buyer and seller. Learned counsel also brings to our notice the judgment of this Tribunal in the case of Rose Zinc Ltd. vs. CC, Jaipur 2011 (274) ELT 417 on an identical issue and submits that the said decision covers the issue in hand.
4. Learned departmental representative reiterates the findings of the lower authority and also relies upon the decision of the Honble High Court of Madras in the case of CC, Chennai-I vs. Bansal Industries 2007 (207) ELT 346 (Mad.), for the proposition that confiscation and penalty are correct as they are in the matter of breach of civil obligation. It is his submission that the importer-appellant always was in the knowledge that the goods imported by them would merit classification under 79020090.
5. On consideration of the submissions made by both sides and perusal of records, we find that the lower authority has erred in law in coming to conclusion that the classification of the goods imported would fall under 79020090.
6. We find that the ITC (HS) classification specifically talks about import of zinc scrap and ISRI code under 79020010 wherein in respect of the goods imported, the description reads as under:-
Prime zinc die casts covered by ISRI Code word Shelf (85% zinc) free from corrosion or oxidation.
7. Appellant declared the goods imported by them under this category. It is the finding of the adjudicating authority that the ISRI Code Shelf is not applicable in this case. It is necessary to reproduce the ISRI definition of zinc dross shelf which reads as under:-
Zinc dross shelf shall consist of metal skimmed from the top of pot of molten zinc die cast metal. Must be unsweated, unfluxed, shiny, smooth, metallic and free from corrosion or oxidation. Should be poured in moulds or in small moulds weighing not over 75 pounds each. Zinc shall be minimum 85%. It is not the case of the Revenue that the zinc content in the goods imported by the appellant is less than 85%. To that extent, the adjudicating authority concedes the factual position. The only point picked up by the adjudicating authority to hold that the goods are liable for confiscation, is that the weight of the slab imported by the appellant is 500 kgs. It can be seen from the above reproduced ISRI definition of zinc dross shelf that the zinc scrap can be poured in moulds or in small moulds weighing 75 kgs each. This definition would clearly indicate that an importer can import zinc dross shelf poured in moulds, as the said definition itself indicates that it should be poured in moulds, the goods imported are nothing but ingots poured in moulds. On this factual matrix, we find that the appellant has made out a case.
8. At the same time, we find identical issue came up before the Bench of the Tribunal in the case of Rose Zinc Ltd. (supra). We reproduce the relevant paragraphs:-
2. As per facts on record, the appellant who is engaged in the manufacture of Zinc Ingots, Brass Ingots, Copper Cathode and Ingots etc imported consignment of 64.600 MT of Zinc Dross and filed a bill of entry dated 6.11.2003. The goods were declared as Zinc Dross as per ISRI Seal Grade falling under Chapter sub heading No. 7902.0010 of the Customs Tariff Act, 1995 having assessable value of Rs. 17,81,216/-. The Zinc Dross containing minimum 90% Zinc free of skimming is importable without any restriction in terms of Exim Policy 2002-2007. To determine the zinc content, representative samples were drawn from the imported consignment and sent to CRCL New Delhi.
6. We have seen the test report of the Chemical Examiner. The same shows the presence of zinc to the extent of 92% by weight i.e. more than 90% in which case it cannot be held to be falling under the restricted category. The lower authorities had relied upon the said report to the extent that zinc dross is not under the grade seal. However, the appellants have contended that these codes like sea, score, gray are different names by ISRI and if the goods are not, seal they would fall under any other grade. In as much as, all the grades are freely importable and attract the same rate of duty, no intention can be attributed to the appellant to mis-declare the goods as seal grade. They have also contended that at the very opinion that zinc dross is not of seal grade, the chemical examiner has not given any reasons as to why the same does not have the characteristics of seal grade. He has also not given any opinion as to under which category the zinc dross falls. As such, they have strongly contended that the chemical examiner report is in-complete and un-reliable. It is also seen that the appellants have made a request for retest of the samples which does not stand accepted by the lower authority.
7. We note that admittedly zinc dross are covered by Entry 7902. 0010. It is only the items which are other than zinc dross and which are other items mentioned in 7902.0010 would fall under the residuary item others would be restricted item. Even as per the chemical examiner report, zinc dross has more than 92% of zinc content. That is the only criteria to be seen for the purpose of the items being covered under the restricted category. In as much, the zinc contents were admittedly more than 92%, we find no reason to hold that the goods would be under the restricted item. Similarly we do not find any justifiable reason for upholding the charges of mis-declaration of the goods on account of grade of the same. First of all the chemical examiners report does not give any reason as to why zinc dross in question cannot be considered to be of seal grade. Secondly, it does not give further opinion has to under which category or grade the sample would fall. We note that the appellant request for retest does not get approved by the lower authority. In any case, we note that whether the zinc dross in question is of seal grade or any other grade, the same is classifiable under heading 7902.0000. Even the Commissioner (Appeals) while rejecting the above classification claimed by the importer, has not given any finding on the correct classification of the product. We do not find any mis-declaration on the part of the assessee. For the above reasons, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
9. It can be seen that the above reproduced judgment of the Tribunal clearly covers the issue in favour of the assessee. Accordingly, we hold that the classification of the goods imported would fall under category of 79020010 and there is no violation nor there is misdeclaration in order to hold that the goods are liable for confiscation under Section 111(d) of the Customs Act, 1962.
10. In view of the foregoing, we set aside the confiscation as ordered by the adjudicating authority and also set aside the penalty imposed. The appeal is allowed and the impugned order is set aside.
(Pronounced in Court on 10.3.2017) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) tvu 1 8 C/1168/06