2024 (6) TMI 1044 - AT - Customs

Classification of imported goods - Unwrought/Unrefined Zinc - to be classified under CTH No. 79012090 or not - demand of differential duty on the basis of theoretical transaction value based on NIDB price of primary Zinc ingots - rejection of transaction value by the Assessing Officer - restricted item for import - HELD THAT - The chemical examination report reproduced and the Revenue s contention that the imported goods were Zinc Dross is without a shred of sustainable evidence. The percentage of zinc found upon test may be higher than that declared but is certainly below the specified limit to merit classification as Zinc Dross but for that of B/E No. 4663314 dated 18.2.14. In so far as the said question has been raised by the Revenue it may be pointed out that they are precluded to raise such a question of classification in subsequent appellate proceedings. The Learned Appellate Authority has relied on case law support that have since settled the Question involved in the present appeal. In fact The Learned Appellate Commissioner discussed at significant length the facts of the case and applied the legal position thereto as arises in view of settled case laws. However in view of what has been stated above that the Revenue was barred from raising the impugned question of law having conceded the same in lower proceedings and therefore could not open it afresh in subsequent proceedings it is refrained from dwelling on the matter any further besides pointing out that the test results themselves do not support the case of the revenue. It is found that the department had undertaken the re-assessment exercise purely on the aspect of valuation of the said goods and therefore the question of determining the nature of this imported product was not taken up in the subsequent proceeding by the Revenue. The Appellate Authority had rightly held that the ground s raised by the Revenue were in view of the lower authorities Order not maintainable. There are no infirmity in the impugned order of the learned Commissioner (Appeals). The appeal filed by the Revenue is therefore dismissed.

Summary

Issues Involved:
1. Classification of imported goods as "Unwrought/Unrefined Zinc" versus "Zinc Dross."
2. Validity of the transaction value and the re-assessment of the import value.
3. Applicability of import conditions under the Foreign Trade Policy (FTP) for the imported goods.
4. Procedural propriety of the Revenue's appeal and the grounds raised therein.

Issue-wise
Detailed Analysis:

1. Classification of Imported Goods:
The primary contention was whether the imported goods declared as "Unwrought/Unrefined Zinc" should be classified as "Zinc Dross." The Revenue argued that the chemical test report indicated the goods were of higher purity zinc and classified them as Zinc Dross, which is a restricted item for import. However, the Tribunal noted that the CRCL did not have the capability to definitively ascertain whether the goods were Zinc Dross. The test results showed zinc content percentages that did not conclusively support the classification as Zinc Dross. The Tribunal referred to past judgments, including Jhawar Trading (P) Ltd. Vs. Commr. of Customs, Calcutta-2002 (139) E.L.T. 695 (Tri.-Kolkata), which established that goods with zinc content over 92% cannot be classified as Zinc Dross.

2. Validity of Transaction Value and Re-assessment:
The Commissioner (Appeals) found that the rejection of the transaction value by the Assessing Officer lacked a sustainable basis. There was no evidence to suggest that the transaction value was different or that there were other considerations like the buyer and seller being related. The valuation adopted by the Department was deemed arbitrary and not supported by any contemporaneous import data. The Tribunal upheld this finding, noting that the reassessment based on NIDB data was not adequately reasoned and lacked disclosure of the purity percentage of zinc ingots used for pro-rata calculations.

3. Applicability of Import Conditions under FTP:
The Revenue contended that the import was a case of disguised import of Zinc Dross to circumvent FTP conditions. However, the Tribunal observed that this contention was not raised in the earlier Review Order before the Commissioner (Appeals) and thus could not be introduced in subsequent appellate proceedings. The Tribunal emphasized that the chemical examination report and the evidence did not substantiate the claim that the goods were Zinc Dross.

4. Procedural Propriety of the Revenue's Appeal:
The Tribunal noted that the Revenue's appeal was beyond the scope of the original Assessment Order, which was solely concerned with the valuation of the goods. The Appellate Authority had rightly dismissed the appeal as not maintainable. The Tribunal further pointed out that the Revenue was precluded from raising new grounds in the appellate proceedings that were not part of the original assessment.

Conclusion:
The Tribunal found no infirmity in the order of the Commissioner (Appeals) and dismissed the Revenue's appeal. The Tribunal upheld the findings that the reassessment of the import value was arbitrary, the classification as Zinc Dross was unsupported by evidence, and the procedural grounds raised by the Revenue were not maintainable. The order under challenge was upheld, and the appeal was dismissed with consequential relief as per law.