2018 (1) TMI 537 - AT - Customs

Court rules on duty for imported goods processed into concentrates under Chapter 26, analyzing manufacturing criteria

The judgment upheld the Revenue's plea, dismissing the appeal based on the interpretation of Chapter Note 4 of Chapter 26, which deems the process of ... Levy of CVD on import of goods - Manufacture - case of Revenue is that in terms of Chapter Note 4 of Chapter 26, which brings the imported goods Rutile Ore Leucoxene Sand as appearing in Bill of Entry, is concentrate being converted from ore amounting to manufacture, shall be liable to duty - Held that: - the amendment which was carried out in the year 2011 basically related to addition of Chapter Note 4 as per which the process of converting Ores into Concentrates is treated as ‘manufacture’ - appeal dismissed - decided against appellant. Issues:1. Interpretation of Chapter Note 4 of Chapter 26 regarding the liability to duty on imported goods.2. Application of legal principles from the judgment of Apex Court in the case of Star Industries Vs. CC(I), Raigad.3. Analysis of the amendments to Chapter 26 and the impact on the classification of goods.4. Consideration of general exemption Notification No.4/2006 and its relevance to the case.Interpretation of Chapter Note 4:The judgment delves into the interpretation of Chapter Note 4 of Chapter 26, which states that the process of converting ores into concentrates shall amount to 'manufacture.' The learned DR emphasized that imported goods like Rutile Ore Leucoxene Sand, when converted from ore to concentrate, are liable to duty as per this provision. The Apex Court's judgment in the case of Star Industries Vs. CC(I), Raigad is cited to support this position. It is highlighted that if the process of obtaining concentrate does not amount to manufacture in India, then the imported concentrate would not be subjected to duty.Application of Legal Principles:The judgment extensively references the legal principles established by the Apex Court in the case of Star Industries Vs. CC(I), Raigad. It is clarified that for the levy of CVD under the Customs Tariff Act, the imported product is deemed to have been manufactured in India, and the applicable central excise duty is determined accordingly. The judgment emphasizes that if the process of obtaining concentrate does not constitute manufacture in India, the imported goods are not subject to CVD.Analysis of Amendments to Chapter 26:The judgment analyzes the amendments made to Chapter 26, particularly the addition of Chapter Note 4 in 2011. This note clarifies that the process of converting ores into concentrates amounts to 'manufacture.' The description of Tariff Item 2601 remained unchanged despite the amendments. Reference is made to sub-item 2613 to illustrate the consistency in the terms used. Additionally, the judgment discusses the implications of general exemption Notification No.4/2006, which exempts excisable goods falling under Chapter 2601 to 2617 from duty.Consideration of Exemption Notification:The judgment considers the relevance of general exemption Notification No.4/2006 in the context of the case. It points out that the 2011 amendment added Chapter Note 4, which treats the process of converting ores into concentrates as 'manufacture.' Based on this legal position, the plea of the Revenue is upheld, and the appeal is dismissed. The decision is made in accordance with the established legal framework and the interpretation of relevant statutory provisions.In conclusion, the judgment provides a detailed analysis of the interpretation of Chapter Note 4, the application of legal principles from the Apex Court's judgment, the impact of amendments to Chapter 26, and the consideration of general exemption Notification No.4/2006 in determining the liability to duty on imported goods.