2011 (5) TMI 403 - AT - Customs

Classification of goods - Restricted items - appellant imported Zinc Dross falling under Chapter sub heading No. 7902.0010 of the Customs Tariff Act, 1995 containing minimum 90% Zinc free of skimming is importable without any restriction in terms of Exim Policy 2002-2007 - Held that - admittedly zinc dross are covered by Entry 7902. 0010. - It is only the items which are other than zinc dross and which are other items mentioned in 7902.0010 would fall under the residuary item others would be restricted item. - chemical examiner s report does not give any reason as to why zinc dross in question cannot be considered to be of seal grade, it does not give further opionin has to under which category or grade the sample would fall, Even the Commissioner (Appeals) while rejecting the above classification claimed by the importer, has not given any finding on the correct classification of the product, order set aside, appeal allowed.

Issues:
1. Classification of imported goods as Zinc Dross under Chapter sub heading No. 7902.0010.
2. Allegation of mis-declaration of goods under the grade 'seal'.
3. Adjudication by lower authorities leading to confiscation and penalty imposition.
4. Appeal against the decision of Additional Commissioner upholding the violation and penalties.

Classification of imported goods as Zinc Dross under Chapter sub heading No. 7902.0010:
The appellant imported Zinc Dross but faced allegations of mis-declaration under the 'seal' grade. The Chemical Examiner's report confirmed the zinc content to be 92.2%, meeting the import criteria. The appellant argued that ISRI's different grades like seal, score, and gray do not affect importability or duty rates. The lower authorities upheld the violation, leading to confiscation and penalties. The Tribunal noted that zinc dross with over 92% zinc content falls under the unrestricted category, not 'others' with restrictions. The Chemical Examiner's report lacked reasoning on the grade classification and denied the appellant's retest request. The Tribunal found no mis-declaration, setting aside the impugned order.

Allegation of mis-declaration of goods under the grade 'seal':
The appellant contested the mis-declaration accusation regarding the 'seal' grade classification of the imported Zinc Dross. They argued that ISRI's various grade names do not impact importability or duty rates, as all grades are freely importable. The Chemical Examiner's report lacked justification for not considering the goods as 'seal' grade. The Tribunal found no basis for upholding the mis-declaration charges, emphasizing that the correct classification was not determined by the authorities. The appellant's request for retesting was denied, raising concerns about the reliability of the initial report.

Adjudication by lower authorities leading to confiscation and penalty imposition:
The Additional Commissioner upheld the violation, confiscating the goods for redemption and imposing a penalty. The Commissioner (Appeals) affirmed this decision, leading to the present appeal. The lower authorities relied on the Chemical Examiner's report, which the Tribunal found inconclusive and unreliable. The Tribunal highlighted the lack of reasoning in the report regarding grade classification and upheld the appellant's argument that all grades of zinc dross are freely importable without mis-declaration intentions. The decision to confiscate and penalize was overturned due to insufficient grounds for the allegations.

Appeal against the decision of Additional Commissioner upholding the violation and penalties:
The appellant's appeal challenged the decision of the Additional Commissioner, who upheld the violation and imposed penalties. The Tribunal reviewed the Chemical Examiner's report, emphasizing the importance of zinc content exceeding 92% for unrestricted import. The appellant's argument that grade names do not affect importability or duty rates was accepted, leading to the conclusion that no mis-declaration occurred. The Tribunal set aside the impugned order, providing consequential relief to the appellants based on the lack of evidence supporting the allegations.

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