2018 (5) TMI 683 - AT - Customs

Mis-declaration of imported goods - four consignments of Lead Ore cleared by the appellant on payment of customs duty - The department has made out the case of mis-declaration and claimed that the seized goods are Lead concentrate - Held that - the definition mentioned in the Wikipedia is not a reliable source. The Lead Ores are different types, namely, Galena, Cerussite, Anglesite. In the SCN, it is mentioned that the percentage of Lead in Galena Ore is 86.6% - The Hon ble Supreme Court of India in the case of M/s Indian Hard Metals P Ltd. Vs. Union of India 1978 (11) TMI 60 - SUPREME COURT OF INDIA observed that the ore may contained 62% to 79% of Tungsten. In the Lead Ore contents varies from 37.20% to 68.71%. It may also be mentioned that in the iron ore also the process of washing has taken place and iron ore become the super quantity of iron ore, but, remains the iron ore. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Interpretation of lead ore classification under customs duty exemption notification.

Analysis:
The case involved two appeals against an Order-in-original passed by the Commissioner of Customs, Kandla, regarding the classification of lead ore. The appellant, a manufacturing company, imported lead ore for production, claiming exemption under Notification No. 12/2012-CE. The dispute arose when the customs authorities alleged mis-declaration, classifying the imported goods as lead concentrate instead of lead ore. The department demanded duty difference and imposed penalties, leading to the appeals.

The appellant argued that lead ore falls under the exemption notification, citing the definition of ores as metalliferous minerals extracted from mines. They contested the department's reliance on Wikipedia for classification, citing Supreme Court precedents rejecting Wikipedia as an authentic source. The appellant highlighted the lack of material evidence and sample tests supporting the department's classification, emphasizing that lead ore can naturally vary in lead content from 10% to 90%.

On the other hand, the department contended that the imported goods were lead concentrates, supported by the lead content ranging from 64.24% to 68.71%. They pointed out the appellant's previous imports of goods with lower lead content declared as lead ore concentrates, implying awareness of the classification. The department argued that lead ores are processed to increase lead content, making the imported goods lead concentrates.

After considering both parties' arguments and the substantial record, the tribunal found in favor of the appellant. They rejected the department's reliance on Wikipedia for classification and emphasized the natural variation in lead content in lead ores. Referring to Supreme Court precedents on ore classification, the tribunal concluded that the imported goods met the criteria for lead ore under the exemption notification. Consequently, the impugned order was set aside, and both appeals by the appellants were allowed.

In conclusion, the tribunal's detailed analysis focused on the classification of lead ore under the customs duty exemption notification, emphasizing the natural variability in lead content and rejecting the department's reliance on unreliable sources for classification. The decision provided clarity on the classification of imported goods and upheld the appellant's claim for exemption, setting aside the penalties imposed by the department.