Customs, Excise and Gold Tribunal - Delhi
Star Wire (India) Ltd. vs Commissioner Of Customs, Icd on 13 August, 2002
Equivalent citations: 2003(86)ECC263, 2002ECR964(TRI.-DELHI), 2003(151)ELT307(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. M/s. Star Wire (India) Ltd. have filed this appeal being aggrieved by the impugned order passed by the learned Commissioner of Customs. Learned Commissioner in the impugned order held -
"The above said categorical remark of the Chemical Examiner in the absence of remnant sample, ought to be accepted. The logical inference would be that the iron content was less than 4% as otherwise the Chemical Examiner would not have made the above said categorical remark. I am, therefore, inclined to hold that the goods in question were correctly classifiable under sub-heading 8111.00 and the duty was leviable @ of 35% basic + 10% (SC) + 16% CVD + 4% SAD (effective rate 67.086%)."
On the question of lack of jurisdiction, learned Commissioner observed -
"However the fact remains that in the instant case, the goods were provisionally assessed subject to test bond. Hence the limitation under Section 28(1) of the Customs Act was not applicable."
2. The facts of the case in brief are that the appellant importer imported a consignment of 10 mts. of Nitrided Low Carbon Ferro Manganese and claimed its classification under Chapter sub-heading 7202.19. The Departmental Authorities allowed clearance of the goods after the importer executed a provisional duty bond subject to receipt of test report on the sample taken out for test and sent to Central Revenue Control Laboratory. On receipt of the test report it was found that the sample was found to contain 95.10% by weight of manganese and 0.06% by weight of carbon. The Chemical Examiner who tested the sample also opined that the goods were other than ferro manganese. Accordingly the authorities below held that the goods were classifiable under Chapter heading 81.11 and confirmed the demand for differential duty. Hence the appeal before the Tribunal.
3. We have heard Shri K.L. Handa, learned Consultant for the appellant(s) and Smt. Nita Lal Butalia, learned SDR for Revenue. It was submitted for the appellant that show cause notice was ab initio void inasmuch as though there was an allegation of suppression of misdeclaration with intent to evade payment of duty, however, it was issued by the Deputy Commissioner. He submitted that thus the show cause notice was without jurisdiction and since it was without jurisdiction the appeal of the appellant must be accepted by setting aside the show cause notice. As against this, the contention of the Revenue was that the goods were released provisionally on execution of a provisional duty bond. Since the assessment was provisional it was to be finalised by the proper officer and that the proper officer for the purpose is Assistant Commissioner/Deputy Commissioner and thus there is no lack of competence in the issue of Show-cause Notice. Further the cause was to be shown to the Commissioner concerned which was permitted under the law. It was therefore, submitted by the learned DR that Show-cause Notice was correct.
4. On merits the Consultant for the appellants submitted that for classifying as ferro manganese alloy the material was supposed to contain 4% or more to be of iron and 30 or more per cent of manganese. It was submitted for the appellants that test results show that the material contained 95.1% by weight of manganese and 0.06% by weight of carbon. He submitted that no percentage of iron has been indicated and therefore, the natural presumption should be that percentage of iron was 4% or more. It was contended by the Consultant for the appellants that a request for re-test was made which could not be complied with as no remnant sample was available. At this stage when the Bench asked the Consultant whether a request was made for cross-examination of the chemical examiner who tested the sample, the reply of the Consultant was that it was not done. On the other hand, the Revenue contended that the goods were declared as Nitrided Low Carbon Ferro Manganese. It was submitted that in addition to Manganese and carbon the sample would have contained Nitrided also. It was submitted that chemically, the percentage of nitrided will be anything more than 2% and therefore, even on percentage basis if at all, any iron was present it would be less than 4%. It was contended by the learned SDR that in addition to this the categorical finding of the chemical examiner was that the goods are other than ferro manganese. It was submitted for Revenue that this clearly shows that goods were not ferro manganese classifiable under Chapter sub-heading 7202.19 but were actually classifiable under Chapter heading 81.11.
5. In support of his contention about classification learned Consultant for the appellants referred to Note 1(c) of Chapter 72 and submitted that product was classifiable under Chapter sub-heading 7202.19 whereas the learned SDR for Revenue submitted that the product was classifiable under Chapter heading 81.11 in terms of Note 5(a) and 5(b) of Section 15.
6. On careful consideration of the submissions made by both the sides we note that the product was described as Nitrided Low Carbon meaning thereby that it was not ferro manganese alone but it was Nitrided and therefore, while ascertaining the percentage of iron present in the imported product we have to take into consideration the weight of nitrogen and oxygen that were generated in the testing of the sample. This percentage could be anything between 2% and higher and if this percentage is read along with percentage ascertained by the Chemical Examiner in the test report the total will be 97% thus leaving no scope for the presence of iron to the extent of 4%. Further we note that there is a categorical opinion of the Chemical Examiner that the sample sent for testing was other than ferro manganese. The opinion of the expert (Chemical Examiner) is that the goods are other than ferro manganese. Even if the contention of the learned Consultant is taken into consideration then the percentage of iron present in the sample cannot be 4% or more.
7. We have also perused the contention of both the sides on the Chapter Notes and Section Notes. Looking to all the facts we hold that the product shall be classifiable under Chapter heading 81.11.
8. On the question of jurisdiction in issue of show-cause notice, we note that no doubt misdeclaration and suppression of facts are alleged. But we note simultaneously that the goods were provisionally assessed. In any case the assessment was to be finalised. There was no question of extension or applicability of longer period in the present case. Provisional assessment can be finalised by the Assistant Commissioner/Deputy Commissioner by issue of Show-cause Notice. We find no violation of any law or we do not see any lack of jurisdiction. Thus on this point also we don't find any case in favour of the importer. Thus we hold that there was no lack of jurisdiction in the instant case. In the circumstances, appeal of the importer is rejected.