2015 (3) TMI 948 - AT - Customs

Denial of exemption claim - import of copper concentrates failing under CTH 2603 00 00 - benefit of Notification No. 24/2011-Cus. Dated 01/03/2011 - an assay certificate from the mining company is required to be furnished for getting deduction of the value of gold & silver content contained in the copper concentrate - Held that - Notification No. 24/2011-cus dated 01/03/2011 does not contemplate an option to be given by an importer to either stick to provisional assay certificate percentage or final assay report. However, it is correctly pointed out by Learned AR that Notification No. 24/2011-cus only talks of an assay certificate from the mining company to specify separately the contents of silver & gold. There is no objection by the department for accepting final assay certificate when imports are directly from the mining company when Final assay certificate of the mining company is accepted both for finalising provisional assessments and for allowing exemption under Notification No. 24/2011-cus. However, it will be unfair if appellant is disallowed exemption when final assay certificate is given by an agency other than the mining company, but Notification No. 24/2011-cus does not provide for such acceptance. For a feasible solution it will be appropriate to take the value content of gold & silver, either in the provisional assay certificate or in the final assay certificate produced by the appellant, which ever is less, for allowing the benefit of Notification No. 24/2011-cus when final assay certificate is given by an agency other than the mining company. - Decided conditionally in favour of assessee.

Summary

Issues:
Interpretation of Notification No. 24/2011-cus dated 01/03/2011 regarding exemption on gold and silver content in imported copper concentrate.

Analysis:
The case involved appeals by M/s. Hindalco Industries Ltd. and the Revenue against OIA No. 34 to 36/2014-cus/Commissioner (A)/AHD dated 21.01.2004. The main contention was the interpretation of Notification No. 24/2011-cus dated 01/03/2011, which exempts copper concentrates from customs duty equivalent to the duty on gold and silver content, provided an assay certificate from the mining company is furnished. The appellant argued that the final assay certificate from the trader should be considered for value deduction, while the Revenue contended that only the mining company's assay certificate is recognized by the notification.

The first appellate authority remanded the case back to the adjudicating authority for finalizing provisional assessments. The authority noted that while the appellant followed international valuation practices, there was a contradiction between valuation and the application of duty exemption under the notification. The authority emphasized the strict requirement of relying solely on the mining company's assay report for exemption. It was highlighted that using different assay reports for valuation and duty exemption would be fallacious. The authority directed the appellant to base value determination on the mining company's assay report to avail the exemption.

The Tribunal observed that Notification No. 24/2011-cus does not allow importers to choose between provisional and final assay reports. While the mining company's final assay report was accepted, there was no provision for acceptance of a final assay report from an agency other than the mining company. The Tribunal suggested a solution where the value of gold and silver content, whichever is less between provisional and final assay certificates, should be considered for exemption when the final assay is from a different agency. The Tribunal modified the directions of the first appellate authority for the remand proceedings.

Ultimately, the appeal filed by the Revenue was dismissed, while the appeal by the appellant was partly modified based on the above observations. The Tribunal's decision clarified the application of Notification No. 24/2011-cus regarding the exemption on gold and silver content in imported copper concentrate, emphasizing the importance of adhering to the requirements specified in the notification for duty exemption eligibility.