1991 (10) TMI 132 - AT - Customs

Issues Involved:
1. Classification of Molybdenum Oxide under the Customs Tariff Act, 1975.
2. Validity and applicability of Trade Notices issued by Customs Houses.
3. Relevance of Molybdenum content in determining classification.
4. Procedural aspects related to the testing of goods and declarations in the Bill of Entry.

Issue-wise Detailed Analysis:

1. Classification of Molybdenum Oxide under the Customs Tariff Act, 1975:
The primary issue in this appeal was the classification of Molybdenum Oxide ("Mo O") under the First Schedule to the Customs Tariff Act, 1975, at the time of import on or about 25-3-1987. The appellants claimed classification under Heading 2613.10 ("Molybdenum Ores and concentrates - Roasted"), while the lower authorities upheld classification under Heading 2825.70 ("Molybdenum oxides and hydroxides"). The Tribunal noted that the description of the goods in the Bill of Entry and the invoice was "Technical Molybdic Oxide (Molybdenum) - Molybdenum (Mo) - 59.9% for manufacture of Ferro Alloys". The Explanatory Notes to Heading 26.13 indicated that roasted molybdenite concentrates (technical molybdic oxide) are covered under this heading. The Tribunal concluded that the goods should be classified under sub-heading 2613.10, as they fit the description of roasted molybdenite concentrates.

2. Validity and Applicability of Trade Notices Issued by Customs Houses:
The issue of the validity of Trade Notices arose from conflicting notices issued by the Calcutta and Madras Customs Houses. The Calcutta Trade Notice classified Mo O containing over 61% Mo under Heading 28.01/58(1) and Mo O with 55% to 61% Mo content under Heading 26.01. The Tribunal in the MMTC case had questioned the validity of this notice. The appellants argued that the Calcutta Trade Notice should be binding, while the respondent contended that the Tribunal had already questioned its validity. The Tribunal in the present case observed that the goods fell within the specifications of the Calcutta Trade Notice, but ultimately based its decision on the Explanatory Notes to Heading 26.13, rather than the Trade Notice.

3. Relevance of Molybdenum Content in Determining Classification:
The relevance of the Molybdenum content (59.9%) was debated, with the appellants arguing that it fell within the specifications of the Calcutta Trade Notice for classification under Heading 26.01. The respondent countered that the Department had not accepted this content and was not obliged to test the goods. The Tribunal concluded that the percentage of Molybdenum was not quite relevant to the determination of the dispute, as the goods were classified based on their description as roasted molybdenite concentrates, fitting Heading 2613.10.

4. Procedural Aspects Related to the Testing of Goods and Declarations in the Bill of Entry:
The procedural aspect involved whether the Department should have tested the goods to verify the Molybdenum content. The appellants argued that the Department should have tested the goods if they disputed the declared content. The respondent argued that the appellants had declared the classification under Heading 2825.70 in the Bill of Entry, and the Department was not obliged to test the goods. The Tribunal noted that the assessing authority had gone by the claimed classification, which attracted a higher rate of duty. The dissenting opinion emphasized that the importer had declared the goods under Chapter 28 and could not now hold the Department responsible for not testing the goods. The final majority decision remanded the matter for de novo consideration, directing the original authority to examine the nature of the goods with reference to trade parlance and technical literature to determine the correct classification.

Final Order:
In view of the majority decision, the matter was remanded to the original authority for de novo consideration to determine whether the goods fall under Chapter 26 or Chapter 28 of the Tariff Schedule.

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