2011 (8) TMI 932 - AT - Customs

Mis-declaration - Classification - appellants have contended that these codes like seal, score, gray are different names by ISRI and if the goods are not, seal they would fall under any other grade. Inasmuch as, all the grades are freely importable and attract the same rate of duty, no intention can be attributed to the appellant to mis-declare the goods as seal grade - They have also contended that at the very opinion that zinc dross is not of seal grade chemical examiner has not given any reasons as to why the same does not have the characteristics of seal grade - Chemical examiner s report does not give any reason as to why zinc dross in question cannot be considered to be of seal grade. Secondly, it does not give further opinion has to under which category or grade the sample would fall - Decided in favor of the assessee

Summary

Issues:
Classification of imported Zinc Dross under the Customs Tariff Act, 1995 as per ISRI "Seal" Grade. Adjudication of mis-declaration and imposition of penalties by lower authorities.

Analysis:
The appellant, engaged in manufacturing Zinc Ingots, Brass Ingots, Copper Cathode, imported 64.600 MT of Zinc Dross declared under ISRI "Seal" Grade. The Chemical Examiner's report indicated 92.2% Zinc content, meeting import criteria. The Assistant Commissioner initially favored the appellant, but the Commissioner (Appeals) remanded the case due to procedural reasons. In the subsequent proceedings, the Additional Commissioner upheld the violation, confiscated goods, and imposed penalties, which were affirmed by the Commissioner (Appeals).

Upon review, the Tribunal found that the Zinc Dross, with over 92% Zinc content, did not fall under restricted categories. The appellant argued that ISRI's various grade names did not affect importability or duty rates, thus no mis-declaration occurred. They challenged the Chemical Examiner's report for lacking reasoning on grade classification and denying retesting requests. The Tribunal noted that Zinc Dross, with high Zinc content, was not restricted, and mis-declaration charges lacked justification. The Tribunal highlighted the absence of a correct classification finding by the Commissioner (Appeals) and ruled in favor of the appellant due to the lack of mis-declaration evidence.

In conclusion, the Tribunal set aside the lower authorities' decision, allowing the appeal and providing consequential relief to the appellants. The judgment emphasized the importance of accurate classification based on content percentages and critiqued the lack of reasoning in the Chemical Examiner's report regarding grade classification. The ruling underscored the necessity of justifiable grounds for penalizing mis-declaration and the significance of proper classification in customs matters.