2017 (8) TMI 985 - AT - Customs

Benefit of N/N. 16/2000-Cus dated 01.03.2000 (Sl.No. 158) - Concessional Rate of Duty - The case of the department is that the appellant has imported re-melting Ingots and that these goods falling under 7204.50 is altogether different category of goods - whether the re-melting Ingots classifiable under CTH 7204.50 is eligible for the benefit of concessional rate of duty under N/N. 16/2000-Cus dated 01.03.2000? Held that - It is pertinent to mention that the Chapter Heading mentioned in the notification is only 7204 and does not expressly exclude 7204.50. Further, 7204 which is the main heading pertains to Ferrous waste and scrap; re-melting scrap ingots of iron or steel. Thus the main heading 7204 which is mentioned in the notification pertains to re-melting scrap ingots of iron or steel. Though the description of goods in the notification mentions only melting scrap of iron or steel, since the goods fall under the Chapter sub-heading 7204, which takes in re-melting scrap ingots, the appellants are eligible for the benefit of concessional rate of duty in terms of the notification. The appellants have produced end use certificate issued by the concerned Central Excise officer, which supports this contention that they have complied the condition. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of re-melting Ingots under CTH 7204.50 for concessional rate of duty under Notification No.16/2000-Cus.

Analysis:
The case involved a dispute over the classification of re-melting Ingots under CTH 7204.50 for the benefit of concessional duty under Notification No.16/2000-Cus. The appellants imported non-alloy steel re-melting Ingots and claimed a 5% customs duty benefit under Tariff sub-heading 7204, Sl.No. 158 of the notification. The Department contended that the concession was applicable only to melting scrap of Iron or Steel and not to re-melting Ingots. A Show Cause Notice was issued demanding differential duty along with interest. The original authority and Commissioner (Appeals) upheld the duty demand, leading to the appeal before the Tribunal.

The appellant argued that the re-melting scrap Ingots imported were meant for re-melting purposes, satisfying the conditions of the notification. They provided an end-use certificate confirming the utilization of the imported Ingots for melting within their factory. The appellant emphasized that re-melting scrap Ingots are distinct from regular ingots, being defective/rejected/scrap ingots intended for re-melting. The appellant's classification under CTH 7204.50 was undisputed, and the end-use certificate supported their claim for the concessional rate of duty.

The Department argued that re-melting scrap Ingots are different from melting scrap and fall under a separate category under CTH 7204.50. They contended that the appellant's goods did not fit the description of melting scrap of iron or steel under the notification. The Department highlighted the classification differences within Customs Tariff Heading 7204 to support their position that re-melting scrap Ingots were not eligible for the notification's benefit.

After considering the arguments and examining the relevant notification and Chapter headings, the Tribunal found in favor of the appellant. The Tribunal noted that although the notification mentioned melting scrap of iron or steel, the Chapter sub-heading 7204 encompassed re-melting scrap Ingots. As the appellants complied with the notification's conditions and provided the necessary certificate, they were deemed eligible for the concessional rate of duty. The Tribunal concluded that the demand was unsustainable, set aside the impugned order, and allowed the appeal with consequential relief.

In conclusion, the Tribunal's judgment clarified the classification of re-melting Ingots under CTH 7204.50 for the benefit of concessional duty under Notification No.16/2000-Cus. The decision emphasized the importance of meeting the notification's conditions and ensuring compliance with the relevant Chapter headings to determine eligibility for duty concessions.