2006 (1) TMI 279 - AT - Central Excise

Summary

Issues:
Classification of imported zinc dust under customs tariff heading 79.03 for duty rate determination.

Analysis:
1. The dispute revolves around whether the imported zinc dust should be classified as zinc powder or under the category of "others" for duty rate determination under customs tariff heading 79.03. The relevant notification provided duty rates of 60% ad valorem for zinc powders and flakes and 40% ad valorem for others under heading 79.03. The appellants argued that zinc dust should be considered as "others" and not as powders.

2. The appellants based their argument on the Explanatory Note to HSN under the revised tariff heading 79.03, which clearly distinguishes between zinc dust and zinc powder. The Explanatory Note defines zinc dust as obtained by condensation of zinc vapor, while zinc powder is defined separately. The notes provide specific criteria for distinguishing between zinc powder and zinc dust, supporting the appellants' contention that zinc dust should not be considered under the expression "zinc powder."

3. The learned D.R. contended that the Explanatory Note for a later period under HSN cannot be applied retroactively. However, the Explanatory Note clearly differentiates between zinc dust and zinc powder, providing distinct definitions for each. Zinc powder is defined as per Note 8(b) to Section XV, while zinc dust is defined under sub-heading note 1(c) to Chapter 79. These definitions support the appellants' claim that zinc dust should be classified differently for duty rate determination.

4. The Tribunal analyzed the definitions of zinc powder and zinc dust provided in the Explanatory Note and concluded that these are two separate commercially known products. Despite the absence of these specific notes in the earlier tariff, they serve as a reasonable criterion for distinguishing between zinc powder and zinc dust. Therefore, the Tribunal upheld the appellants' argument that zinc dust cannot be considered as "zinc powder" under the relevant notification, and it should be classified under "others" for duty rate determination, entitling the appellants to a lower rate of duty.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants, providing them with consequential benefits based on the correct classification of imported zinc dust under customs tariff heading 79.03.