Mittal Pigments Pvt. Ltd. Vs Commissioner of Customs (CESTAT Ahmedabad)
Summary: The appeal was filed against order-in-original No. 17-18/2017-18 dated 16.02.2018 concerning the classification of imported waste and scrap of lead in powder form. The appellant had claimed classification of the imported goods as ‘Lead Concentrate’ under Heading 26070000, attracting duty at 2.5%, whereas the Department treated the goods as lead waste and scrap under Chapter Heading 78020090 and charged duty at 5%. The appellant submitted that the same item had been treated as ‘Concentrate’ by the Department in the past and future imports and relied upon various laboratory test reports, including reports which supported classification as lead concentrate.
Read SC Order in this case: Supreme Court Remands Mittal Pigments Customs Classification Matter to CESTAT
The Department, however, contended that 99% recovery was not possible in the case of lead concentrate and relied upon the appellant’s status as a secondary producer of Lead, pollution-control registrations and test reports describing the material as scrap of Lead Acid Battery. The Tribunal considered the rival submissions, the test reports and other material on record. It observed that the dispute concerned the imported item and that the appellant’s status as a primary or secondary producer was not relevant to classification of the imported goods. The Tribunal noted that, in the past and future, the same item had been treated by the Department as ‘Concentrate’. On consideration of the test reports and other material, the Tribunal held that the imported item fell under the classification of ‘Concentrate’ under Heading 26070000. It accordingly set aside the impugned order and allowed the appeal in favour of the appellant.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The present appeal is filed against order-in-original No. 17- 18/2017-18 dated 16.02.2018.
2. The brief facts of the case are that the appellant is a private limited company and engaged in importing of waste and scrap of lead in powder form. The appellant claimed in the bill of entry that it was ‘Lead Concentrate’ but the department considered the same as ‘waste’ and classify the same under Chapter Heading 78020090. The appellant after adducing the evidence, classified the same item under Heading 26070000, where the duty was 2.5%. The department charged the duty @ 5% and demanded the balance of duty. Being aggrieved, the appellant has filed the present appeal.
3. With this background, we heard Sh. Madhav Rao (Advocate) for the appellant and Sh. J. Nagori (A.R.) for the Respondent.
4. The Ld. Advocate for the appellant submits that in the past and future also the said item was classified as the ‘concentrate’ item and Department has accepted it, but at this time the same was treated by the Department as scrap. He has drawn our attention to para 7.1 of the impugned order where on the basis of the literature, it was mentioned that:
“the lead plates after breaking the battery are removed, separated from the oxides both manually and mechanically and lead scrap thus obtained is melted in simple “Mandir Type” Rotary Furnace to obtain lead. The First melt in trade parlance is called as ‘soft lead’ which contains about 99% of lead.”
The worldwide list of the companies producing Zinc and Lead/lead ore are accepting the same position.
5. At the strength of the written submission, the Ld. Counsel has submitted that there were the various test reports obtained in the various laboratories: Test report No. 502 dated 02.12.2014, Test report dated 13.12.2014, 02.03.2015, 29.04.2015 and all in favour of the appellant. He submits that finally, test report dated 02.30.2015 record that the sample is lead concentrate. Thus, there is conclusive report regarding the classification of the imported consignment, the department cannot rely upon the other non-conclusive test report to classify the consignment as waste.
6. On the other hand, Sh. J. Nagori, A.R. justify the impugned order and submits that 99% recovery is not possible in case of lead concentrate. Central Board of Pollution Control as well as State Environmental Control Board has given license to the appellant as a secondary producer of Lead, and not a primary producer of Lead. It is the submission of the Ld. AR that in the test reports, it is certified that it is a scrap of Lead Acid Battery and form 9 was submitted for hazardous goods.
7. In his rejoinder, the Ld. Counsel for the appellant has drawn our attention to the base metals and articles of the base wherein Section 8, the waste and scrap was defined. Accordingly, the metal waste and scrap from the manufacture or mechanical works of the metals and metal goods definitely not usable as such. He submits that the same is not applicable in his case as per process given by the Department.
8. We heard both the parties at length and on perusal of the record from which, it appears that the appellant had imported the Lead, the department wants to classify the same under heading 78020090 being a scrap. On the other hand, the assessee wants to classify the same under the heading 26070000 being a concentrate. Facts remains that in the past and future the said item was treated by the Department as ‘Concentrate’, only this time this treatment has been denied.
9. Regarding the Polution Certificates, it is evident that this is not a case of production, this is a case of import. Appellant may be engaged in primary or secondary production, we are not concerned, we are concerned with the impugned imported item only. So, the Certificate of Pollution will not have much relevance. By looking the test report and other material, we are of the view that the item falls under the classification of Heading ‘Concentrate’ under 26070000. Hence, in view of the above, we set aside the impugned order and allow the appeal in favour of the appellant.
(Dictated and pronounced in the open court)
