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TMI Blog1998 (9) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... lared by the appellants at US $ 0.52 per lb. (CIF) and as the goods were without declaration of any grade as per NARI specification, representative samples were drawn from the goods and were sent to Custom House Laboratory for chemical examination. On receipt of the result of the test report, the Department entertained a view that the goods in question were not brass waste classifiable under Tariff Heading 74.04 of the Customs Tariff Act, 1975. But the same was brass powder classifiable under Heading 74.06 and the residue classifiable under Heading 2620.90. Accordingly, a show cause notice was issued by the Assistant Commissioner on 23-5-1990 alleging that the consignment in question consisted of materials other than brass waste and scrap, as declared by the appellants and proposing its confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962 and penalty under Section 112 of the Customs Act, 1962. 1.2 During adjudication, the appellants contested the allegations vigorously and produced on record expert opinion in the shape of certificates of various authoritative persons. Test report of the tests conducted by the appellants from the representative samples given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be Brass Waste. The said Brass Waste had arisen during grinding process undertaken for manufacture of various Brass articles. This position has been certified by the foreign supplier in its certificates at pages 35 to 37 of the paper book. (c) The fact that such material in powdery form arising during different manufacturing processes is known, dealt with and regarded in the market as Brass Waste and Scrap had also been certified by The East India Metal Association in its certificate dated 18-9-1990 (page 34). (d) Note 6 (a) of Section XV of the First Schedule to the Customs Tariff Act, 1975 (in short the 1975 Act) defines the expression "Waste and Scrap" to mean metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons. The said definition of waste and scrap given in the Customs Tariff is fully satisfied in respect of the said goods. The said goods imported by the appellant have got only one use, namely, being melted for recovery of metal. This position is also quite clear from the following certificates :- (i) Certificate dated 12-9-1990 from Intalab Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was obtained after the proceedings were initiated by the Customs Authorities. The Additional Collector failed to appreciate that obviously this was bound to be so in as much as the occasion to get the said certificate arose only in view of the objections raised by the Customs Authorities. (h) It is submitted that the fact that Brass Waste and Scrap may be in powdery form has also been recognised in the Explanatory Notes below Heading No. 74.04 in the Harmonised Commodity Description and Coding System (in short HSN). The Additional Commissioner has ignored the Explanatory Notes in HSN simply by alleging that there was no presence of any lubricants in the goods in question. It is submitted that the said reason given by the Additional Commissioner is totally misconceived. The presence of lubricants in such waste depends on the process from which the waste arises and due to presence or absence of lubricants the waste cannot cease to be waste. (i) The fact that brass waste and scrap can be in powdery form has also been recognised in NARI Circular (Standard Classification for non-ferrous scrap metals) issued by National Association of Recycling Industries Inc. New York. The said fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Brass Waste imported by the appellant was not produced by any of the processes mentioned in the said Explanatory Notes nor it has got the characteristics of powders as mentioned in the said Explanatory Notes nor it is capable of being used for any of the purposes mentioned in the said Explanatory Notes. Obviously there can be no scope to classify the said waste as powders. (c) The fact that Brass Powders covered by Heading No. 74.06 are completely different products, manufactured by completely different processes, have completely different characteristics and completely different uses and functions will also be fully clear from the following literature/evidence relied upon by the appellant before the Additional Collector : (i) An article "types, properties and uses of copper powder" presented by Shri S.C. Jain (page 38). (ii) An article presented by Shri G.M. Krishnamurthy and Shri M.K. Rao during the seminar on Copper & Copper Alloy Powders organised by the Indian Institute of Metals and Indian Copper Information Centre (page 41). (iii) An article titled "bronze powders" presented by Shri M. Dhanaskerapandian (page 44). (iv) An article titled "Atomized Copper & Copper Base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of brass articles. Furthermore, copper and copper alloy powders are manufactured for different uses and the process of manufacture is selected depending upon the type of powder desired and the properties required. There is no such thing in the case of the said material imported by the appellant which just arose as a waste during the manufacturing process of brass articles. Furthermore, brass powders are normally produced by atomisation which method results in uniform powder with particles of uniform composition and such powder is readily compressible and excellent for sintering. These tests are not satisfied in respect of the said materials imported by the appellant. Apart from this, the main use of atomised brass powder is in electronics and machine part industries. The waste imported by the appellant, however, is not capable of being put to any such use and the only use thereof is for recovery of metal by the process of remelting. Furthermore, brass powders are supplied to specifications to ensure uniform properties in the fabricated product. Specifications mostly limit the composition, flow, bulk density, screen analysis, compressibility and green strength. Insofar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed v. CCE] (iii) 1994 (74) E.L.T. 794 [CC v. S.S. Enterprises] 2.4 The Additional Collector's reliance on the Chemical Test Reports is totally misconceived. The said Test Reports are at pages 28 to 30 of the paper book. The said Test Reports only mention about chemical composition of the goods and their physical form. In none of the Test Reports it has been stated anywhere that the goods are metal powders within the meaning of Heading No. 74.06 or that the same are not Brass Waste falling under Heading No. 74.04. There is nothing in any of the said Test Reports to indicate that 90% or more by weight of the said goods was passing through a sieve having a mesh aperture of 1 mm. The said reports do not in any way indicate even remotely that the goods in question are not brass waste within the meaning of Heading No. 74.04 but are Brass Powders within the meaning of Heading No. 74.06. 2.5 Insofar as blackish grey coloured powder is concerned, classification thereof under Heading No. 74.04 was totally incorrect in any event even as per the findings given by the Additional Collector. (a) Further and in any event, insofar as the blackish grey-coloured powder is concerned, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants were aggrieved with the Test Report they could have asked for a re-test. In this regard, he places reliance on the Supreme Court's decision in the case of Reliance Cellulose Products v. Collector of Central Excise, Hyderabad reported in 1997 (93) E.L.T. 646 (S.C.) = 1997 (21) RLT 117 (S.C.) and on the Tribunal's decision in the case of National Organic Chemical Industries Ltd. v. Collector of Central Excise, Bombay reported in 1997 (92) E.L.T. 629 (Tribunal). 3.1 As regards the blackish coloured powder goods, he admits that the same are admissible under the OGL, but submits that the Comimissioner has rightly confiscated the same as the said goods were not segregable from the yellowish coloured brass powder. In view of his above submission, he prays for rejection of the appeal. 3.2 The dispute in the instant case is as to whether the goods imported by the appellants are waste and scrap classifiable under Heading 74.04 or the same are Brass Powders classifiable under Heading 74.06 of the Customs Tariff Act, 1975. The waste and scrap and the Powders are defined in Section Note 6 of Section XV. For better appreciation, Section Note is reproduced below :- "Waste Scrap" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sophisticated manufacturing process and have their uses in different fields. From the technical literature duly supported by authoritative books on the issue, we find that metal powders are highly engineered materials of specific shapes and sizes. Metal powders range from 0.1 to 1000 micrometres in size with shapes that are spherical, acicular, irregular, dendritic, flake, angular, or fragmented. The metal powders are mainly manufactured by atomizing process in which a stream of molten metal is broken up into droplets that freeze into powder particles. The other methods are chemical and mechanical. The appellants have produced on record a certificate from the supplier of the goods in question, which is to the effect that the material supplied to the appellants under Invoice dated 27-12-1989 is Brass Waste/Brass Grinding arising out of the Brass Industries. This material is used, generally, for recovery of brass metal. The said Certificate of the foreign supplier has not been adverted to by the adjudicating authority on the ground that the same has been issued by the foreign supplier after the proceedings were initiated by the Customs Authorities. This reasoning of the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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