Gravitas India Limited Vs C.C.-Mundra (CESTAT Ahmedabad)
Summary: The CESTAT Ahmedabad considered whether lead-bearing material imported by Gravitas India Limited and declared as “lead concentrate” under CTI 26070000 could be classified by Revenue as “lead waste and scrap” under CTI 78020090. The dispute arose from denial of the concessional Basic Customs Duty rate of 2.5% available under Sr. No. 117 of Notification No. 12/2012-Cus. Revenue relied substantially on laboratory reports, load-port documents, Pre-Shipment Inspection Certificates, weighment slips and the appellant’s manufacturing activities to contend that the imported material was derived from used lead-acid batteries. The appellant maintained that the goods were lead concentrate, were traded as such and were substantially sold to Hindustan Zinc Ltd. The Tribunal examined the successive test reports, including reports of JNCH, Navashiva and CRCL, New Delhi. While the CRCL reports found that the samples primarily contained lead oxide and lead sulphate and did not possess the characteristics of lead concentrate, the Tribunal noted that they also did not report the samples as “lead scrap”.
Significantly, the Tribunal found that Chapter 78 covers lead in metallic/primary form, whereas the samples contained practically no metallic lead. Lead oxide and sulphates were specifically covered under Chapter 28. Consequently, even assuming that the material was not classifiable as lead concentrate, Revenue’s proposed classification under CTI 78020090 could not be sustained. The Tribunal therefore set aside the impugned order classifying the goods under Chapter 78 and allowed both appeals.
Issue Before the Tribunal
The principal dispute was the classification of imported lead-bearing material. The appellants had declared the goods as lead concentrate under CTI 26070000 and claimed the concessional rate under Sr. No. 117 of Notification No. 12/2012-Cus., which prescribed a 2.5% BCD rate for goods falling under headings 2601 to 2617. Revenue considered the goods to be lead waste and scrap under CTI 78020090, attracting a higher rate of duty.
