Document Fragment View

Matching Fragments

Original No.34533/2015 dated 23.01.2015 by the importer-assessee.

2. The admitted facts are that the importer-assessee, the appellant herein, is engaged in the business of manufacturing 'Nickel Cadmium Batteries' for which they had imported 'Nickel Hydroxide powder' from various countries. The said imported 'Nickel Hydroxide powder' is, admittedly, having different additives like Cobalt, Graphite, etc. It is the case of the appellant that they have been importing Hydroxide Powder from 2003 onwards by classifying the same under Chapter Heading 2825 4000 which corresponds to the entry description "Nickel Oxides and Hydroxides" on which they were paying applicable duties which was accepted by the Revenue without any dispute. With the introduction of Notification No.12/2012-Cus. dated 17.03.2012 which exempted goods under CTH 28254000 from payment of Customs duty, it appears that the appellant claimed BCD exemption under Sl.No.161 of the above Notification upon import of the "Nickel Hydroxide Type M5", which were imported vide 24 Bills of Entry. The Revenue, however, disagreeing with the claim of the importer for the benefit of Notification supra issued SCN dated 17.03.2014 and after hearing the appellant, passed Order-in- Original No.34533/2015 dated 23.01.2015 demanding the differential duty along with applicable interest and penalty. The case of the Revenue is that in terms of Chapter Note 1 only separate chemical elements and separate chemically defined compounds were classifiable under Chapter 28 and hence, mixtures which are not separate chemically defined compounds are not at all classifiable under CTH 28; when Chapter Notes specifically exclude a particular category of goods, Rule 3 (b) of General Rules of Interpretation (GRI) could not be invoked; the goods in question were not naturally occurring substances present in a crude state or a clearly defined chemical compound but is a heterogeneous mixture formulated for the specific use, which has a specific function; in terms of Rule 4 of GRI read with Chapter Notes to Chapter 28, the goods are appropriately classifiable under Chapter 38 and under the residual heading 3824.90. It was also the case of the Department that appellant has acted contrary to the provisions of Section 17 and Section 46 of the Customs Act, 1962 and had not given the correct description thereby claimed wrong notification benefits. Aggrieved by the above demand vide OIO supra, the present appeal has been filed before us.

ii. Whether the order of confiscation and imposition of redemption fine and penalty is justified or not in the facts and circumstances of this case?
This Bench had very elaborately considered the rival contentions in the context of the rival entries and, after detailed analysis, has held that the product "Nickel Hydroxide" is a separate chemically defined compound containing Cobalt Hydroxide, which is also a separate compound; also graphite an element/metal, which has been admitted that these were added to enhance the conductivity of Nickel Hydroxide Compound, which is meant to be used for manufacture of 'Nickel Cadmium Batteries'. The relevant observations are reproduced below for ease of reference: