1978 (11) TMI 60 - SC - Customs

Court rules in favor of appellant in wolfram ore classification case under Indian Customs Tariff.

The Court ruled in favor of the appellant in a case concerning the classification of imported wolfram ore under the Indian Customs Tariff. The ore, with a ... Whether Wolfram ore be classified under Item 87 of the Indian Customs Tariff and charged duty at the rate of 60 per cent ad valorem amounting to ₹ 62,871.03 P., instead of classifying the imported ore either under item 26 or Item 70 (7) which are free from duty? Held that:- There is no manner of doubt that the goods imported by the appellants had to be classified as imported ore, falling either under Item 26 or Item 70(7) of the Import Tariff, and as such, no duty was leviable on them. The appellants are, therefore, entitled in the refund of the duty paid by them on the goods in question. In favour of assessee. Issues:Classification of imported wolfram ore under Indian Customs Tariff, applicability of duty rates, interpretation of Item 26, Item 70(7), and Item 87, determination of marketable quality of wolfram ore, consideration of chemical processes in ore concentration.Analysis:1. The case involved an appeal regarding the classification of 15 metric tonnes of imported wolfram ore by Customs authorities. The ore was classified under Item 87, attracting a duty rate of 60%, instead of being classified under duty-free items like Item 26 or Item 70(7). The appellant contested this classification, arguing that the ore was of marketable quality with a tungsten concentrate of 75% obtained through physical processes like crushing and magnetic separation.2. The appellant's argument was supported by the contention that the ore's concentration did not involve any chemical changes and that marketable wolfram ore typically contains 65% to 70% tungsten. Reference was made to expert opinions, a judgment by the Supreme Court in a similar case, and certificates confirming the ore's processing methods and quality standards in the industry.3. On the contrary, the opposing party emphasized the absence of evidence supporting the appellant's claims and suggested that the high purity of the ore indicated a manufacturing process beyond physical methods. However, the Court found that the percentage of tungsten in the ore concentrate did not disqualify it from being considered as marketable quality ore under Item 70(7) of the Import Tariff.4. The Court referred to a previous judgment involving wolfram concentrate import, where it was established that physical processes like crushing and separation do not alter the ore's chemical structure. Certificates from experts and authorities further supported the notion that selective mining processes, without chemical changes, can achieve tungsten concentrations of up to 79% in marketable quality wolfram ore.5. Ultimately, the Court concluded that the imported goods should have been classified as ore under Item 26 or Item 70(7) of the Import Tariff, making them duty-free. The appellant was granted a refund of the duty paid on the goods, and the impugned orders were set aside, directing the authorities to process the refund accordingly.