2013 (12) TMI 821 - AT - Customs

Imports of Zinc dross - Levy of CVD - Amendment in Section 2 of the Central Excise Act 1944 - Revenue contends that zinc dross is covered under the definition of excisable goods which fall under sub-heading 7092 00 10 of the Central Excise Tariff zinc dross was leviable to countervailing duty - Held that - with the change in definition of excisable goods with effect from 10-5-2008; zinc dross would get covered as an excisable item falling under Chapter 79 attracting duty of excise and import of the same would call for confirmation of CVD. Further the appellants plea that the said zinc dross was to be used in their factory located at J & K where the same stand exempted does not appeal to the Bench at this stage inasmuch as the levy of CVD cannot be dependent upon the area based exemption - Partial stay granted.

Summary

Issues:
1. Dispensing with the condition of pre-deposit of duty confirmed as CVD for imports of Zinc dross.
2. Interpretation of the definition of excisable goods under Section 2 of the Central Excise Act, 1944.
3. Validity of show cause notice issued for recovery of countervailing duty.
4. Applicability of area-based excise duty exemption on the import of zinc dross.

Analysis:
1. The appellant sought to dispense with the pre-deposit condition of duty amounting to Rs. 4,96,594 confirmed as Countervailing Duty (CVD) for the import of Zinc dross during July and August 2009. The original Bills of entries were assessed without CVD based on the understanding that zinc dross was not excisable goods. However, a subsequent amendment broadened the definition of excisable goods, leading to the imposition of CVD by the Revenue. The Commissioner confirmed the duty, prompting the appellant to challenge the show cause notice and the levy of CVD.

2. The main contention of the appellant was that the assessment under nil CVD was finalized before the show cause notice, and the import was intended for a factory in Jammu & Kashmir where excise duty was exempted. The Commissioner, however, held that the change in the definition of excisable goods under Section 2(d) now included zinc dross, making it liable for CVD. The Commissioner justified the issuance of the show cause notice under Section 28 for recovery of duty short paid or not paid.

3. Both parties reiterated their arguments from the Commissioner's proceedings. The Tribunal acknowledged the changes in the definition of excisable goods and the applicability of CVD to zinc dross under Chapter 79. The appellant's reliance on the area-based excise duty exemption for Jammu & Kashmir was not considered sufficient to waive the CVD. Consequently, the Tribunal directed the appellant to deposit 50% of the duty within four weeks, with the balance amount waived and its recovery stayed during the appeal process.

This judgment clarifies the application of CVD on zinc dross imports following the amendment to the definition of excisable goods, emphasizing the Revenue's authority to issue show cause notices for duty recovery. The Tribunal's decision balances the legal provisions with the specific circumstances of the case, requiring the appellant to make a partial pre-deposit while granting relief on the remaining duty amount during the appeal.