9911796707
TMI Blog1994 (4) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... . King Island Scheelite dated 20-4-1986. Eighty per cent of the goods was released pending test result. The sample, therefrom, was drawn and tested by the Customs House laboratory which gave the opinion that the material was inorganic chemical calcium Tungstrate in the form of white powder in their test report dated 6-10-1986 given by the Dy. Chief Chemist of the Customs House Laboratory, Bombay which did not support the declaration of the goods in the Bill of Entry as `Tungston Ore . The appellants contested this and said in their letter dated 4-12-1986 that the concentrated ore imported is the starting point for further digesting treatment with Hydrocloric Acid to convert this Ore through Ball milling cycle. Therefore, they said it is not calcium tungstate. They also produced a certificate from the National Chemical Laboratory, Pune stating that on the basis of X-ray defraction report calcium tungstate in natural scheelite and kings island scheelite is almost similar in its crystallographic form and there is no change in its structure. They also relied upon the Supreme Court decision in the case of MMTC v. UOI - 1983 (13) E.L.T. 1542 (SC) = AIR 1972 SC 2551 which laid down that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tungstrate in the form of white powder, the order of the Assistant Collector holding that the goods fall under Chapter 28 and not under Chapter 26 CTA, was upheld on merits and the Collector (Appeals) also concluded that the appeal was time-barred. 3. Shri R.P. Shah, the Ld. Counsel, alongwith Shri H.C. Daruwala, Ld. Counsel appearing for the appellants contended that the delay in filing their appeal was caused by the incorrect direction in the preamble to the Assistant Collector s order regarding the address of the Appellate authority and that the delay was not deliberate and should be condoned. On merits, the Ld. Counsel submitted that the goods imported is scheelite concentrate and is fully covered by the tariff description under Heading 2611.00 which covers Tungston ores and concentrates. Even going by the Deputy Chief Chemist s report says that the goods are inorganic chemicals, yet the specific Heading 2611.00, which covers the product, should prevail. Reference was also made to the Webster s 3rd International Dictionary where the meaning of scheelite is given as a native calcium tungstate CaWO4 and as a commercial source of tungsten compound. Similarly, in the New Webster ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys down clearly that the heading, which is specific to the goods, should be adopted, and in this case Heading 2611.00 being specific, ought to have been adopted, and there is no justification for excluding the goods from that Chapter. He also referred to the letter of suppliers dated 14-5-1987 addressed to the appellants saying, inter alia, that the scheelite ore supplied by them is a mineral ore and not produced from chemicals, and that only the molybdenum is removed by chemical process normal to the industry and hence it is called Artificial/Synthetic Scheelite ore in the trade. 4. Shri S. Chakraborty, the ld. JDR appearing for the Department, pointed out that the test report of the Customs House Laboratory, in this case, is very clear stating that the goods imported is inorganic chemical calcium tungstate in the form of white powder. He, further, pointed out that under the Customs Tariff, there are distinct product groups under Sections V VI where Section V relates to mineral products including ores, slag and ash and Section VI relates to the products of the Chemical or Allied Industries. According to the Test Report, the goods is stated to be inorganic chemical CaWO4 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the test laid down for considering the material as ore by the Court is still valid. 5. I have carefully considered the submissions made by the Ld. Counsel and the Ld. D.R. 6. The goods, imported, have been described in the Bill of Entry as Scheelite Concentrate (Australian King Island Scheelite Tungsten Ore). The goods are now being sought to be classified by the Department under Chapter 28 whereas the appellants claim is that it should be classified under Heading 2611.00 as tungsten ores and concentrates. 7. In the first instance, we find that though the Collector has held the appeal to be time-barred, he has also gone into the merits of the case and given findings. We find, considering the explanation given for the delay, which is also only of 9 days, it is condonable, because the address of the Appellate Authority as given in the preamble was apparently not the correct one, and the admitted fact is that the appellants have filed the appeal before the Collector (Appeals) in time at the address indicated in the preamble to the Assistant Collector s order in assessment. The question is whether the goods, imported, will fall under Heading 2611.00 as Tungsten Ores and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to convert the product from the flotation section to a molybdenum-free high purity calcium tungstate or artificial scheelite (refer flow diagram page 27). The plant operates on a continuous three shift basis, producing a coarse plus 74 micron gravity concentrate of 72% WO3 grade, and a fine chemically precipitated artificial scheelite of approximately 77% WO3 to 78% WO3 grade. Crushing Ore is delivered from the two underground mines in 35 tonne trucks and crushed in primary jaw and two stage gyratory crushers, the final stage being in closed circuit with two five-deck vibrating screens. Screen undersize (nominally minus 10mm) is delivered to the fine ore storage bins. Grinding Fine ore is drawn from one of two storage bins over a load cell weightometer and fed to two wet ball mills. Primary mills operate in closed circuit with five-deck vibrating screens, screen undersize at minus 840 micron passing to the concentrating section where it is cycloned into plus and minus 74 micron fractions for treatment in gravity and flotation sections respectively. Gravity Concentration Plus 75 micron cyclone underflow is sorted into six size fractions in five spigot hydrosize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 grade and a fine chemically precipitated artificial scheelite of approximately 77% WO3 to 78% WO3 grade. This, itself, indicates that the suppliers produce and market two products. One which the suppliers describe as concentrate of 72% WO3 and another which they call artificial scheelite 77% WO3 to 78% WO3 grade. That these are two distinct products, is also evident from the suppliers letter dated 14-5-1987 and their telex dated Jan. 7, 1987. In the telex, they have described their product as natural scheelite or synthetic scheelite. In the letter dated 14-5-1987, they have referred to two forms of their products, namely, normal gravity, high molybdenum concentrate and normal technically molybdenum-free concentrate in which by other treatment virtually all of the molybdenum content has been removed to make it acceptable to more discriminating consumers such as the Tungsten Carbide Industry (emphasis supplied). 9. From the above, it is evident that the scheelite concentrate of 72% WO3 grade is itself marketable and is capable of being utilised by the user industries. The molybdenum-free high purity calcium tungstate, a fine chemically precipitated artificial scheelite of 77% WO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical calcium tungstate in powder form. Therefore, such a product will fall outside the scope of Chapter 26. In the MMTC case decided by the Supreme Court, relied on by the appellants, the Supreme Court had observed that basic operations necessary to produce usable Ore concentration will not take the product out of classification as `ore . In the same judgment, the Hon ble Supreme Court had noted that in that case the `ore was never subjected to any process of roasting or treatment with chemicals to remove impurities, whereas, here, we have seen that the artificial scheelite imported according to the suppliers literature is a molybdenum-free high purity calcium tungstate or a fine chemically precipitated artificial scheelite of approximately 77% WO3 to 78% WO3 grade. The same literature, further, shows that from the mine, tungsten is sold as a concentrate either wolframite or scheelite and the grade of concentrate has to be higher than 65% WO3. The product, which the suppliers describe as coarse gravity concentrate itself, has 72% WO3 grade and it is this product which they market as concentrate. In view of the above finding, it has to be held that artificial scheelite imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n mentioned as the tariff heading under which the lower authorities had assessed the goods. From the perusal of these two tariff headings, it appears that the tariff rate of duty on both the headings appears to be the same. However, I do not feel called upon to pronounce on this issue as the appellants have not made submissions as between these two entries under Chapter 28 since their case is that Chapter 28 is not applicable at all to the goods imported, which it is found, is not sustainable. In the result, I do not see any reason to interfere with the order passed by the lower authorities. The appeal is rejected. Sd/- K.S. Venkataramani, Member (T) 10. [Contra per : S.L. Peeran, Member (J)]. - I have gone through the order prepared by learned brother, Shri K.S. Venkataramani, Member (Technical) but I could not pursuade myself to agree with the reasoning given by him, to classify the product scheelite as inorganic chemical compound under Chapter Heading 28 of CTA which had been described by the appellant in this case under Heading 2611.00 of Tariff Act as `Tungsten Ore and concentrates . 11. The appellants have produced enormous evidence in this case to support their ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods as `Artificial Scheelite describing the product as WO3 with percentage as 78.6% and it certified that crystallographic structure of Spanish natural Scheelite and king island scheelite is similar. The letter of Shri P.S. Damle, Head, Department of Physics, University of Poona was also before the lower authorities. However, the same was rejected. The appellants have produced a chart which shows various processes of the mining and also various other processes the Ore undergoes before it is in a position to be packed and transported. Does this process of making the Ore transportable make it a separate chemically defined compound? The answer is in the negative. The product Scheelite Ore cannot be transported in the form it is mined. The same has got to be processed before it is in a position to be packed and transported. This fact is not denied by the Department. The view taken by the Supreme Court in the case of M/s. MMTC Ltd. v. Union of India and Others as reported in AIR 1972 SC 2551 in respect of Wolfram WO3 is very material for considering this aspect of the matter. The Supreme Court has held in Para 4 that Wolfram is always selectively mined in the technical terminology ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten. The price of tungsten has always been volatile and fluctuates greatly. From the mine, tungsten is sold as a concentrate - either wolframite or scheelite. The tungsten in the concentrates for sale purposes is assayed as tungstic oxide - WO3. For weight the concentrates are measured in M.T.U. s, which is 1/100 of a metric tonne. The grade of concentrate has to be higher than 65% WO3 . The literature gives details of metallurgical operations comprising of general milling operations, curshing, grinding, gravity concentration and flotation. This process in no way has changed the nature of Ore as can be seen by supporting evidence produced by the appellants, the evidence of Shri P.S. Damle, Head of Physics Department, University of Pune, the affidavit of Shri T.R.S. Krishnan, literature of Australian King Island Scheelite Ore, details of natural scheelite and synthetic scheelite supplied by supplier. This literature shows that the imported product is only Ore from which associated impurities are removed by usual Ore processing method and the product is a natural one and not a chemically prepared Calcium Tungstate. The evidence of the appellant with regard to trade parlance has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adjudicating authority was also 5-1-1987. No show cause notice was issued. On 23-12-1986 the appellant had written a letter to the Revenue Authorities which appears as Ex. G and in that letter it has been mentioned that Mr. S.G. Pendsay met the Deputy Chief Chemist and during discussion the appellants were told that the Australian Scheelite in appearance looks very much different than Natural Scheelite and possibly because of some chemical treatment by the manufacturer during the manufacturing process the crystal structure has changed. He pleaded that the Order-in-Original has been passed by the A.C. and being not satisfied with the order passed by the A.C. an appeal was filed and the Collector (Appeals) passed order on 20-6-1988. He referred to Chapter Note 2 of Chapter 26 which appears on page 4 of the Appeal Memo. He pleaded that for the purposes of Headings 26.01 to 26.17, the term ores means minerals of mineralogical species actually used in the metallurgical industry for the extraction of mercury, of the metals of Heading 28.44 or of the metals of Section XIV or XV, even if they are intended for non-metallurgical purposes. Headings 26.01 to 26.17 do not, however, include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by mining; ore. 3. any substance that is neither animal nor vegetable. 4. Mineral, Brit. see mineral water - adj. 5. of the nature of a mineral; pertaining to a mineral or mineral. 6. containing or impregnated with a mineral or minerals. 7. neither animal nor vegetables; nor inorganic : mineral matter. (Late ME ML. Minerale) (n) Mineralis (Adj.) equiv. to miner (a) mine. ore. 17. Shri Shah referred to page 45 of the paper book which is a letter written by King Island Scheelite to the appellants dated 14-5-1987 where they have certified that the products supplied by them was mineral not produced from chemicals and the King Island Scheelite mines natural scheelite and only produces scheelite concentrates (CaWo4) in two forms i.e. normal gravity high molybdenum concentrate and normal technically molybdenum-free concentrate. He also referred to page 21 which is the packing list and weight and Analysis Certificate. He again referred to pages 1 and 3 of the compilation; page 1 relates to Encyclopedia Britanica Micropedia and `scheelite has been described as calcium tungstate mineral CaWo4 i.e., an important Ore of tungsten and on page 3 Shorter Oxford English Dictionary meaning of ` ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 12 of the compilation in which Metallurgical Operations have been explained. He also referred to the Products Process which appears on page 40 of the paper book. Ld. Advocate relied on a Supreme Court decision in the case of MMTC v. Union of India - AIR 1972 SC 2551 at 2554. He also referred to another decision in the case of Indian Hard Metals (P) Ltd. v. Union of India reported in 1978 (2) E.L.T. (J 667 and 670). He laid special emphasis on Para 7. Ld. Advocate pleaded that after the process there is no change in the chemical structure. He referred to page 25 of the paper book which is a certificate from University of Poona, Department of Physics, by Shri P.S. Damle, Head of the Physics Department. He argued that the opinion of Chief Chemist is in appellant s favour. He referred to Section Note 2 of Heading 28.51. He argued that Chapter 28 comes under Sections V and VI of the Customs Tariff Act, 1975. Section VI relates to the products of the Chemical or Allied Industries, whereas it is a mineral product. He referred to Chapter Note 3 of Chapter 28 or other products of Section V . He pleaded that 28.51 is a residuary heading relating to other inorganic compounds. Ld. Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to the Condensed Chemical Dictionary, Tenth Edition page 857. She also referred to the affidavit of Shri Krishnan (page 32 of the paper book). She referred to Interpretatory Rule 3(c) of the Customs Tariff Act. Smt. Ananya Ray, Ld. SDR made an alternative plea that if the original classification made was not accepted alternatively it may be assessed under 2841.90. She pleaded for dismissal of the appeal. She relied on the order of the Member Technical and pleaded for the dismissal of the appeal. 22. Shri Rohan Shah, Ld. Advocate in reply argued that Natural Scheelite or Synthetic Scheelite is not relevant. The goods imported are `ore and has to be assessed as `ore . He referred to HSN Chapter 26 and laid special emphasis on the last line : The chemical processes are aimed at eliminating the unwanted matter . He pleaded that there is no change in chemical structure. He referred to the Deputy Chief Chemist s report. He pleaded that the chemical examiner s report is silent on the chemical structure which is very relevant. He referred to interpretatory Rule 3(c). He pleaded that the argument of the Ld. SDR for classification under Heading 2841.90 cannot be entertained at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed air, amalgams, other than amalgams of precious metals. 80 per cent plus Rs. 25/- per kg." Notification 78/86-Cus., dated 17-2-1986 exempted inter alia concentrate of tungsten falling within Chapter 26 of the First Schedule to the Customs Tariff Act from so much of that portion of the duty of customs leviable thereon as was in excess of 40% ad valorem. The notification is reproduced below : Effective rates of duty for specified Metallic ores and concentrates. - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts Metallic ores and concentrates (excluding ore) and concentrates of Antimony, Tungsten and Zinc falling within Chapter 26 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate of 40% ad valorem. 2. This Notification shall come into force on the 28th day of February, 1986." The description of the goods in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Artificial Scheelite and percentage of WO3 is 78.9%. On page 39 appears a Korea Tungsten chart. The presence of Typical Natural Scheelite has been described as Grain sized natural scheelite superbly suitable for tungsten alloys, manufacture of ferro-tungsten. .... where molybdenum element is required .... in high speed steel application and the percentage of WO3 Typical is 73%; and in Synthetic Scheelite the description has been given as High grade fine powdered scheelite, best used for manufacture of high-purity metal powder ... when nodulized, outstanding as direct additive to steel and WO3 Typical is 75%. The uses of Natural Scheelite is grain sized, whereas the Synthetic Scheelite is in the form of fine powder and the percentage of Synthetic Scheelite is 2% higher than the Natural Scheelite. 24. Shri K.S. Venkataramani, Member (Technical) in his order (internal page 8) has given a detailed description for the proper appreciation which appears on pages 10 to 13 of the compilation i.e., the operations at King Island Scheelite. The same is again reproduced : * * * * * * * On page 40 appears a Products Process Chart. A per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N have persuasive value and as such the goods should be assessed under Chapter 26. The Tribunal in the case of Keltron Power Devices Ltd. v. Collector of Customs reported in 1987 (28) E.L.T. 93 at page 99, Para 18 had held as under : * * * * * * * It was also held in Nivedita Chemicals Pvt. Ltd., Bombay v. Collector of Customs, Bombay reported in 1985 (20) E.L.T. 382 that BTN Explanatory Notes have only persuasive value and cannot be engrafted into Customs Tariff Act when not incorporated therein. Tribunal in the case of Saurashtra Chemicals, Gujarat v. Collector of Customs, Bombay reported in 1983 (13) E.L.T. 1182 [Para 7] had held as under : * * * * * * * The Advocate had pleaded reliance on the judgment of the Supreme Court in the case of MMTC. The judgment is not applicable in this case as it was under the old Tariff. The Advocate has cited other decisions too. The judgments cited by the Ld. Advocate does not help. Larger Bench of the Tribunal, in the case of Saurashtra Chemicals, Porbandar v. Collector of Customs, Bombay reported in 1986 (23) E.L.T. 283 has held that Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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