1987 (11) TMI 186 - AT - Central Excise

Summary

Issues: Classification of imported Zinc Scrap as Zinc Dross for Customs duty assessment; Eligibility for refund under Notification No. 168/69-C.E.; Interpretation of Tariff Item No. 26B(1)-CET for countervailing duty on Zinc Dross.

In this case, the appellants imported Zinc Scrap classified as Zinc Dross under Customs duty Heading 26.02/04 CTA, leading to the assessment of additional Customs duty under Tariff Item No. 26B(1)-CET. The Assistant Collector rejected the refund application citing the requirement of actual use of Zinc Dross within the factory of production as per Notification No. 168/69-C.E. The appellants argued that the dross was not "unwrought" and therefore not liable for duty under 26B(1)-CET, supported by a Tribunal judgment. The Respondent contended that Zinc Dross fell under 26B(1)-CET specifically, regardless of its origin during manufacture, citing a different Tribunal order and Supreme Court judgment laying down requisites for countervailing duty imposition.

The Tribunal analyzed the arguments, referring to a Board's clarification that duty under 26B(1) applied to manufacturers producing unwrought Zinc from ore by smelting, which was not proven in the present case. The Tribunal held that the presence of cathodes and anodes in the sub-heading indicated the word "unwrought" did not apply to all items, making it an inclusive category. Therefore, any item under the sub-heading, including dross, was liable for Central Excise duty, irrespective of being wrought or unwrought, eliminating the argument against classification under Tariff Item 68-CET.

The Tribunal rejected the appeal, emphasizing that once an item is included in a Tariff heading, questions about its manufacture or origin become irrelevant, as per the Supreme Court's precedent. It concluded that Zinc Dross could come into existence during the manufacturing process and was specifically mentioned under Item 26B(1)-CET, justifying the levy of additional Customs duty. All other arguments from both sides were deemed irrelevant in light of this finding, leading to the dismissal of the appeal.