Case Law Details
Rajdev Inter Trade Private Limited Vs C.C.-Mundra (CESTAT Ahmedabad)
In the case of Rajdev Inter Trade Pvt. Ltd. versus C.C.-Mundra, a pivotal issue arises regarding the classification of remelted zinc for customs duty purposes. The appellant contests the classification under CTH 7901 20 90, arguing for CTH 7901 12 00 instead.
The crux of the matter revolves around the classification of “remelted zinc.” The appellant imports this material from Australia and declares it under CTH 7901 12 00, paying a 5% basic customs duty. However, the department argues that due to the zinc content, it should be classified as “zinc alloys” under CTH 7901 20 90, attracting a higher duty of 7.5%.
The appellant challenges this reclassification, citing procedural lapses by the department and presenting case laws to support their stance. They argue against the reliance on test reports and emphasize the absence of proper sampling procedures.
Upon careful examination, the CESTAT Ahmedabad upholds the department’s classification. The tribunal notes discrepancies in the zinc content declared by the appellant, which doesn’t align with the requirements of Chapter 79. Despite the appellant’s arguments, the tribunal finds no fault in the department’s reliance on test reports for classification.
The tribunal dismisses the appeals, affirming the legality of the impugned orders. It concludes that the classification by the department stands valid and requires no intervention.
The ruling by CESTAT Ahmedabad in the case of Rajdev Inter Trade Pvt. Ltd. versus C.C.-Mundra underscores the importance of accurate classification for customs duty purposes. Despite the appellant’s contentions, the tribunal upholds the classification of remelted zinc as zinc alloy, imposing a 7.5% customs duty.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The Appellant M/s Rajdev Intertrade Pvt. Ltd is a private limited company engaged in the manufacture of Zinc Oxide. A product called remelted zinc is used for the said purposes. The Appellant imports the said remelted zinc from Australia. The Appellant has effected the said imports by classifying Remelted zinc under CTH 7901 12 00 of the First Schedule to the Customs Tariff Act, 1975 and paid Basic Customs Duty at the rate of 5%. A show cause notice dated 25.10.2019 was issued to the Appellant alleging that based on the content of zinc in the disputed goods, the goods should be classifiable as “zinc alloys” under CTH 7901 20 90 wherein customs duty leviable is at 7.5% and not under the heading which has been preferred by the Appellant that is as “Zinc not alloyed” under CTH 7901 12 00. The Department has confirmed the demand of differential duty amounting to Rs. 3,74,518 under section 28(1) of the Customs Act, 1962. The Learned Commissioner (Appeals) vide order in appeal No. MUN/CUSTM/000/APP/151 – 21-22 dated 15.09.2021 has upheld the findings of the lower authorities. Hence, the present Appeal.
2. Shri Hardik Modh, Learned Counsel appearing on behalf of the Appellant has made submissions as regards the test report relied on by the Ld. Commissioner (Appeals). He submits that the Ld. Commissioner (Appeals) has relied on the test reports of the sample drawn through metal gun and classified the disputed goods under CTH 7901 20 90 whereas they should have considered taking samples from the said consignment for testing that the substantive procedure was not followed by the department for which he has relied on the following judgments:-
- Hindustan Ferodo Ltd. v CCE 1997 (89) ELT 16 (SC)
- Madhu Wool Spinning mills v UOI 1983 (14) ELT 2200 (Bom)
- Arya Abhushan Bhandar v UOI 2002 (143) ELT 25 (SC)
- Puma Ayurvedic Herbal Pvt. Ltd v CCE Ex. 2006 (196) ELT 3 (SC)
- Nanya Exports v Commissioner of Customs, Chennai 2006 (197) ELT 154 SC
2.2 Without prejudice to aforesaid he also submits that the levy of penalty under section 117 vide OIO and OIA is beyond the Show Cause Notice when the proposed penalty under the same is under section 114(a) of the Customs Act, 1962.
3. Shri A.R. Kanani, Learned Superintendent (AR) appearing on behalf of Revenue has reiterated findings of the impugned order.
4. We have carefully considered the submissions made by both the sides and perused the records. We find that the main issue to be decided in the present case is with regards to classification of “remelted zinc” that whether it will be covered under CTH 7901 20 90 as claimed by the Department or under CTH 7901 12 00 as claimed by the Appellant. In order to determine the classification the said chapter headings and note to Chapter 79 is reproduced below:
Furthermore, we note that the Appellant vide Bill of Entry 3940705 dated 09.11.2017 and 4542175 dated 25.12.2017 have admittedly declared zinc at 95.85 % and 95.75% respectively which clearly does not correspond to the requirement as envisaged under note (b) of Chapter 79. As regards the submissions made by the Appellant in respect of reliance placed by the adjudicating authority on the test reports, we are of the view that in the absence of test reports reliance would have been placed on the description of the goods made by the Appellants which too does not correspond to the requirements of the said chapter. Either way the claims of Appellant find no merit. We observe that there was no foul in the department’s reliance on the test reports in furtherance of ascertaining the classification of the goods in dispute. Therefore, the adjudicating authority was not wrong in reclassifying the disputed goods under CTH 7901 20 90. The classification of the goods by the Department is proper and needs no interference. The judgments cited by the Appellant in support of their claims are based on facts and circumstances entirely different from that in the present case therefore cannot be relied upon.
5. In view of the findings and discussions above, we are of the view that the impugned orders are just and legal which does not require any interference. Accordingly, the impugned orders are upheld. The appeals are dismissed.
(Pronounced in the open court on 26.02.2024)
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