2016 (1) TMI 473 - AT - Customs

Import of rutile welding grade - benefit of Notification No. 4/2006-CE for the purpose of CVD - Held that - Notification No. 4/2006-CE inter-alia unconditionally exempts ores falling under chapter heading 2601 to 2617. - It is seen that nowhere in the lower adjudicating authorities orders it is brought out that the goods imported were concentrates. If the goods were not concentrates and were classified under 2614, they had to be ore . Chapter Note-2 of Chapter 26 clearly states that it is not necessary that for the goods to be classified as ores they have to be necessarily intended for metallurgical purposes. From this it axiomatically follows that there was no basis for the lower authorities to deny the benefit of Notification No. 4/2006-CE when they have themselves classified the impugned goods under 2614 and at no stage even hinted that the goods were concentrates . - Decided in favor of assessee.

Summary

Issues:
- Benefit of Notification No. 4/2006-CE for levy of CVD on imported rutile welding grade
- Classification of impugned goods as "ore" under Chapter Note-2 of Chapter 26 of Customs Tariff
- Denial of exemption under Notification No. 4/2006-CE by lower adjudicating authorities
- Interpretation of Chapter Note-2 of Chapter 26 regarding classification of goods as "ores"
- Consideration of goods under sub-heading 26140031 and relevance to the exemption notification

Analysis:
The appeal was filed against an order denying the benefit of Notification No. 4/2006-CE for rutile welding grade imports, upholding a Customs duty demand and imposing a penalty. The lower authorities concluded that the impugned goods did not qualify as "ore" under Chapter Note-2 of Chapter 26, thus ineligible for the exemption. The appellant argued that the goods were correctly classified under heading 26.14 of the Customs Tariff and should be considered as "ore" for the exemption purpose.

The dispute centered around the interpretation of Chapter Note-2 of Chapter 26, which defines "ores" as minerals used in the metallurgical industry for specific extractions. The Notification No. 4/2006-CE exempts ores falling under specific chapters unconditionally. The appellate tribunal noted that the impugned goods were not shown to have undergone processes abnormal to the metallurgical industry. Customs authorities classified the goods under sub-heading 26140031, which covers titanium ores and concentrates, indicating the goods were "ores" and not concentrates.

The tribunal emphasized that the lower authorities failed to establish that the imported goods were concentrates, as required for denial of the exemption. Chapter Note-2 clarifies that goods need not be intended for metallurgical purposes to be classified as ores. Since the impugned goods were classified under 2614 and not hinted to be concentrates, the denial of the Notification No. 4/2006-CE benefit was deemed unjustified. Consequently, the tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant.