9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1990 (12) TMI 77 - SC - CustomsWhether the goods in question fall under one or the other of the two headings in the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff') referred to later? Held that - Although the product imported by the appellant is battery grade manganese dioxide, it does not fall under Heading 25.01/32 because it is not the ore in its crude form but is the ore in a form purified or upgraded by electrolysis. Once the applicability of Chapter 25 is out for this reason, the only item that can cover the goods in question is Heading 28.01/58, since there is no dispute that the item in question is a chemical product or chemical compound. Against assessee.
Issues Involved:
1. Classification of imported electrolytic manganese dioxide under the Customs Tariff Act, 1975. 2. Applicability of countervailing duty based on classification. Issue-wise Detailed Analysis: 1. Classification of Imported Electrolytic Manganese Dioxide: The appellant, a manufacturer of dry batteries, imports electrolytic manganese dioxide with a manganese dioxide content of 91%. The primary issue is whether this item falls under Heading 25.01/32(3) or Heading 28.01/58 of the Customs Tariff Act, 1975. The appellant contends that it should be classified under Heading 25.01/32(3) as "Battery grade manganese dioxide," which would exempt it from countervailing duty. The Revenue argues that it should be classified under Heading 28.01/58 as an inorganic chemical compound, which would subject it to countervailing duty. Chapter 25 deals with "Salt, sulphurs, earths and stone; plastering materials, lime and cement" and includes "Battery grade manganese dioxide" under Heading 25.01/32(3). Chapter 28, referenced by the Department, deals with "Inorganic chemicals; organic and inorganic compounds of precious metals, of rare earth metals, of radio-active elements and of Isotopes" and includes a detailed entry for various chemicals under Heading 28.01/58. The appellant argues that the imported item is commercially known as "battery grade manganese dioxide" and falls squarely under Heading 25.01/32(3). It emphasizes that this is a specific entry covering the goods in question, while Heading 28.01 is a general heading for various chemicals. The appellant also points out that Note 2 to Chapter 28 does not specify manganese dioxide and Note 6 explicitly excludes "sodium chloride and magnesium dioxide" from Chapter 28. 2. Applicability of Countervailing Duty Based on Classification: The determination of the correct classification has implications for the applicability of countervailing duty. If classified under Heading 25.01/32(3), no countervailing duty would be payable. However, if classified under Heading 28.01/58, the appellant would be liable to pay countervailing duty. The Department argues that Note 1 to Chapter 25 limits the scope of items to those in their crude state or purified by mechanical or physical processes. The Assistant Collector's findings, confirmed by the Tribunal, state that the imported manganese dioxide is not in its crude form but is obtained through electrolysis, a chemical process. The imported item undergoes grinding, dissolution, leaching, electrolysis, hammering, washing, crushing, neutralization, and pulverization, which are not confined to the methods mentioned in Note 1 to Chapter 25. The Tribunal's order refers to a case where natural battery grade ore, obtained by highly selective mining, was imported. Natural and electrolytic manganese dioxide are classified separately under the import policy. The appellant's imported manganese dioxide, being electrolytic and obtained through chemical processes, does not fall under Heading 25.01/32(3) but under Heading 28.01/58 as a chemical product. Conclusion: The Supreme Court concluded that the Department's contention is well-founded. Note 1 to Chapter 25 requires items to be in their crude state or purified by mechanical or physical processes. The imported manganese dioxide, being electrolytic and obtained through chemical processes, does not meet this criterion. Therefore, it does not fall under Heading 25.01/32(3) but under Heading 28.01/58. Consequently, the appellant is liable to pay countervailing duty. The appeals were dismissed, affirming the correctness of the assessing authority and the Tribunal's view. No order as to costs was made.
|
