2014 (6) TMI 85 - AT - Customs

Valuation of goods - Rejection of transactional value - Held that - there is no evidence of rejection of transaction value and no evidence of contemporaneous import, he has held that the transaction value has to be accepted as assessable value - in their memo of appeal, the Revenue has not placed any evidence on record to reject the assessee s transaction value - Following decision of Eicher Tractor 2000 (11) TMI 139 - SUPREME COURT OF INDIA - Decided against Revenue. Classification of goods - exemption at Sl. No. 438 of Notification No. 21/2002-Cus., dated 1-3-2002 - Whether an Alloy consisting of 60.6% of Copper and 13.90% Nickel can be considered as Nickel or Articles of Nickel for the purpose of availing exemption at Sl. No. 438 of Notification No. 21/2002-Cus., dated 1-3-2002 - Held that - Though the nickel silver turnings covered by ISRI code word Niece is mentioned in the Tariff under sub-heading 75030010 pertaining the Nickel waste and scrap , which would also cover the waste and scrap of Nickel alloy, in term of sub-heading note 1(b) of Chapter 75, in Nickel alloys, nickel has to predominate by weight over each of other constituents and, therefore, a base metal alloy in which copper predominates by weight can not be treated as Nickel alloy. Even in term of Section Note 5 to Section XV, Nickel silver alloy in question, can not be treated as Nickel alloy but has to be treated as copper alloy. There is, thus, conflict between the wordings of the heading 75030010 and the section note and sub-heading notes. Therefore the sub-heading 75030010 pertaining to Nickel waste and scrap , would cover only that scrap of Nickel or its alloy in which Nickel predominates by weight over other constituents. The goods, in question, in which copper predominates by weight over other constituents cannot be classified as Nickel alloy scrap and hence the same cannot be treated as Nickel . In view of this, the goods, in question, are not covered by S. No. 438 of Notification No. 21/2002-Cus., notwithstanding the fact that the goods have been classified under sub-heading 75030010, which in my view, is a mistake - goods, in question, being a copper alloy are not covered by S. No. 438 of the table of the Notification No. 21/2002-Cus - Decided against Assessee.

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Notification No. 21/2002-Cus.
2. Correct classification of imported goods.
3. Validity of the declared transaction value.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Notification No. 21/2002-Cus:
The primary issue was whether the imported goods, described as "Nickel Silver Turning Niece," qualified for the concessional rate of duty under Serial No. 438 of Notification No. 21/2002-Cus., which applies to "Nickel and articles of nickel." The Assistant Commissioner denied the benefit, arguing that the predominant element in the goods was copper, not nickel, based on the chemical examiner's report. The Commissioner (Appeals) upheld this decision. The Tribunal examined the chapter notes and section notes of Chapter 75 and Section XV of the Customs Tariff, which define nickel alloys and their classification. The Tribunal found that the goods, containing 60.6% copper and 13.9% nickel, could not be considered nickel or articles of nickel for the purpose of the notification. Therefore, the appeal by the importer on this ground was rejected.

2. Correct Classification of Imported Goods:
The imported goods were initially described incorrectly by the CHA as "Nickel Silver Malic (Turning)" instead of "Nickel Silver Turning Niece." The Assistant Commissioner and the Commissioner (Appeals) both confirmed the correct classification under sub-heading 75030010, which pertains to nickel waste and scrap. However, the Tribunal noted a conflict between the tariff heading and the section notes, which state that an alloy should be classified based on the metal that predominates by weight. In this case, copper was the predominant metal, leading to the conclusion that the goods should be classified as a copper alloy rather than a nickel alloy. This classification impacted the eligibility for the concessional duty rate.

3. Validity of the Declared Transaction Value:
The Assistant Commissioner had rejected the declared transaction value and re-determined it under Rule 8 of the Customs Valuation Rules. However, the Commissioner (Appeals) set aside this enhancement, citing the lack of evidence for rejecting the transaction value. The Tribunal upheld the Commissioner (Appeals)'s decision, noting that the Revenue had not provided any evidence of contemporaneous imports or any other basis to justify rejecting the transaction value. Thus, the declared transaction value was accepted as the assessable value.

Separate Judgments by Judges:
The Tribunal's decision included differing opinions from the members. The Member (Judicial) believed that the goods should be eligible for the concessional duty rate, arguing that the chapter notes were not relevant for deciding the applicability of the notification. However, the Member (Technical) and another Member (Technical) disagreed, emphasizing that the goods, with copper as the predominant element, could not be classified as nickel or articles of nickel. The majority opinion upheld the denial of the concessional duty benefit and the classification of the goods as a copper alloy.

Conclusion:
The Tribunal concluded by rejecting both the importer's appeal for concessional duty benefit and the Revenue's appeal against the acceptance of the declared transaction value. The order of the Commissioner (Appeals) was upheld in its entirety.