Classification of brass brazing granules as unwrought alloy denied SSI exemption and upheld demand and penalty.

Brass brazing granules or pellets produced by pouring molten brass into water were treated as unwrought copper-zinc base alloy rather than articles of brass. On that basis, Heading 7403.21 was held to be the correct classification, not Heading 7419.99, because the goods were not brass articles made by working on brass. As the goods fell within a heading excluded from the small scale industry exemption notification, SSI exemption was denied. The classification under Heading 7419.99 and the exemption claim were rejected, and the demand and penalty were restored in favour of the Revenue.

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Issues: Whether brass brazing granules/pellets, made by pouring molten brass into water and used for welding or brazing, were classifiable under Heading 7403.21 as unwrought copper zinc base alloys or under Heading 7419.99 as articles of brass, and whether they were eligible for small scale industry exemption.

Analysis: The goods were found to be in the nature of unwrought metal and not brass powder or flakes under Heading 7406. The essential character of the goods was that they were not articles made by working on brass, but brass granules/pellets in unwrought form. On that basis, Heading 7403.21 was held to be the proper classification. Since the goods fell within a heading excluded from the scope of the small scale exemption notification, the benefit of exemption could not be extended to them.

Conclusion: The classification under Heading 7419.99 and the grant of SSI exemption were rejected. The goods were held classifiable under Heading 7403.21, and the demand and penalty were restored in favour of the Revenue.

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