Custom, Excise & Service Tax Tribunal
M/S Mittal Pigments Pvt Ltd vs Commissioner Of Customs, Kandla on 27 April, 2018
Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No. C/11622-11623/2013 (Arising out of OIO-KDL/COMMR/59/2012-13 dated 21/02/2013 passed by the Commissioner of Customs, Kandla) 1. M/s Mittal Pigments Pvt Ltd. 2. Shri Rameshkumar Aggarwal : Appellant (s) Vs Commissioner of Customs, Kandla : Respondent (s)
Represented by:
For Appellant (s) : Shri Deepak Kumar, Advocate For Respondent (s): Shri J. Nagori, AR CORAM :
Justice Dr. Satish Chandra, Hon'ble Member (Judicial) Mr. C. J. Methew, Honble Member (Technical) Date of Hearing: 25.04.2018 Date of Decision:27.04.2018 ORDER No. Per : Justice Dr. Satish Chandra Both the present appeals are filed against Order-in-original-KDL/COMMR/59/2012-13 dated 21/02/2013 passed by the Commissioner of Customs, Kandla.
2. The brief facts of the case are that the appellant is a private limited company and engaged in the manufacture of Lead Ingots, Lead Oxides, Lead Alloys etc., which attracts the central excise duty, the appellant procured the raw material indigenously as well as imported from various countries. They avail Cenvat credit of additional duty of Customs. The major raw material required to manufacture their finished goods are Lead Ore, Lead Concentrate, Lead Scrap, Lead Scrap as per ISRI, re-melted Lead Ingots etc. They have 03 Rotary Furnaces and 04 Refining pots in their factory. They procure imported Lead Ore, Lead Concentrate, Lead Scrap as per ISRI, re-melted Lead Ingots and Antimony Metals. The present dispute is pertaining to the four consignments of Lead Ore cleared by the appellant on payment of customs duty by availing exemption under Notification No. 12/2012-CE dated 17.03.2012. Bills of Entry dated 27.02.2012 & 04.09.2012 were not cleared by the customs authorities. The department has made out the case of mis-declaration and claimed that the seized goods are Lead concentrate. On the other hand, the appellant has claimed the same as Lead Ore. Finally, department had demanded the difference of duty along with the penalty. Penalty was also levied on the Director of the assessee company. Being aggrieved, the appellants have filed the present appeals.
3. With this background, we heard Shri Deepak Kumar, the representative of the appellants who submits that the present dispute relates to four consignments of Lead Ore, which Department claims to be as Lead Concentrate instead of Lead Ore, as claimed by the appellants. The effect of the change is that while Lead Ore is exempt from CV duty under Notification No. 04/2006-CE dated 01.03.2006 and Notification No. 12/2012-CE dated 17.03.2012. He mentioned that the Lead Concentrate is chargeable to CV duty @ 12% adv. The period of dispute in the present appeal is February 2012 to July 2012.
4. It is the submission of the Ld. Counsel that the Lead Ore is falling under Custom Tariff item 26070000 and entitled for the exemption as mentioned above. He has read out the definition of the Ores applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from mine. According the Ld. Counsel, in the impugned order, the only reason to hold that the product imported by the appellant is Lead Concentrate, the definition given in the Encyclopedia namely Wikipedia on the Ore processing of Lead. He submits that the Honble Supreme Court in the case of Ponds India Ltd. Vs. Commissioner of Trade Tax Lucknow 2008 (227) ELT 497 (S.C.) and BOC India Ltd. Vs. State of Jharkhand 2009 (237) ELT 0007 (S.C.), it was held that Wikipedia is not an authentic source and therefore cannot be accepted/relied upon.
5. It is the also submission of the Ld. Counsel that except the definition of the Wikipedia, there is no material available with the Department. In the instant case, no sample test report was obtained. Thus, the distinction made by the Department in the impugned order is not based on the sound reasoning. Lead Ore is a natural occurringmineral product in which percentage of Lead varies from 10% to 90%. To hold that since the percentage of Lead in the impugned consignments varies from 32.80% to 68.71%, therefore, it is not Lead Concentrate. Further, there is no condition in the aforesaid Notifications that only the Ore which have low metal content is covered in it and Ore with high metal content are not covered. In support of his arguments, he referred on the ratio laid down in the case of M/s Indian Hard Metals P Ltd. Vs. Union of India [1978 (2) ELT (J667) (S.C.)].
6 On the other hand, Shri J. Nagori the Ld. Authorized Representative for the Department had justified the impugned order. He submits that the mined lead ore contains Lead up to 10% only at the time of mining and for achieving the higher content of PB various processes are undertaken. The goods in question imported by the importer contained Lead content of 64.24% to 68.71%. The importer had themselves earlier imported consignments with Lead content ranging from 32.80% to 37.20% declaring the same as Lead Ore Concentrates. Similarly, the price declared by them for the consignments with Lead content of 64.24% to 68.71% was much higher than what was declared for consignments containing lead content of 32.80% to 37.20%. The HSN also recognizes that Ores are seldom marketed before preparation and that they are normally concentrated before sale etc. So, the imported goods are Lead Concentrates and not Lead Ore as mined.
7 He also submits that the Lead Ore imported by the appellants from overseas supplier was actually Lead Ore Concentrates has been categorically accepted by the Director of the Company. According to the Ld. Counsel that the importer had declared the consignments with less Pb content than the Pb contained in the impugned goods as Lead Ore Concentrates and paid the CVD thereon which indicates that they were aware that the impugned goods were Lead Ore Concentrates. Finally, he submits that the differential customs duty is corrected demanded by the authorities. For the purpose, he justified the impugned order.
8. We heard both the parties at length and gone through bulky material available on record from which it appears that the appellant is continuously importing the Lead Ore earlier, the Lead Ore was having the lead contents 32.80% to 37.20% and the Department has allowed. But this time, the fine ore was imported by the appellant which has contents upto 64.24% approximately. For this reason, the duty demand was raised by the department.
9. We agree with the submission of the Ld. Counsel for the appellants that the definition mentioned in the Wikipedia is not a reliable source as observed by the Honble Supreme Court (supra).
10. It may be mentioned that the Lead Ores are different types, namely, Galena, Cerussite, Anglesite. In Para 7.12 of the show cause notice, it is mentioned that the percentage of Lead in Galena Ore is 86.6%. The Honble Supreme Court of India in the case of M/s Indian Hard Metals P Ltd. Vs. Union of India [1978 (2) ELT (J667) (S.C.)] observed that the ore may contained 62% to 79% of Tungsten.
11. When it is so, then by following the decision of Honble Supreme CourtHoh (supra), we are of the view that in the Lead Ore contents varies from 37.20% to 68.71%. It may also be mentioned that in the iron ore also the process of washing has taken place and iron ore become the super quantity of iron ore, but, remains the iron ore.
12. In view of the discussion and by considering the peculiar facts and circumstances, we find no reason to sustain the impugned order, the same is hereby set-aside.
13. In the result, both the appeals filed by the appellants are allowed.
(Order pronounce in the court on 27.04.2018)
(C. J. Mathew) (Justice Dr. Satish Chandra) Member (Technical) President
G.Y.
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Appeal No. C/11622-11623/2013