Non-alloy steel classification upheld for imported TMT bars, securing Nil basic customs duty exemption under the customs notification.

Imported TMT bars were held to qualify as non-alloy steel goods for the purpose of Nil basic customs duty under Sl. No. 190C of Notification No. 21/2002-Cus. The classification dispute depended on composition testing, and the Revenue had itself relied on a National Metallurgical Laboratory report stating that the samples were non-alloy steels under the relevant Indian Standard. The reclassification by the lower authorities was found to rest on assumptions about silicon content and alleged alloy character, without contrary expert evidence. The denial of exemption was therefore unsustainable, and the importer was entitled to the notified benefit.

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Issues: Whether the imported TMT bars were entitled to the benefit of Nil rate of basic customs duty under Sl. No. 190C of Notification No. 21/2002-Cus. dated 01.03.2002 as non-alloy steel goods.

Analysis: The classification dispute turned on the nature and composition of the imported TMT bars. The Revenue had itself referred the samples to the National Metallurgical Laboratory, and the laboratory opined that the samples tested were non-alloy steels as per the relevant Indian Standard. Once the Revenue chose to rely on expert testing, it could not reject that opinion without obtaining a contrary expert report. The reclassification adopted by the lower authorities was found to rest on assumptions rather than evidence, and the conclusions drawn regarding silicon content and the alleged alloy character of the bars were held to be unsupported by the test material on record.

Conclusion: The importer was entitled to the exemption benefit under Sl. No. 190C of Notification No. 21/2002-Cus. dated 01.03.2002, and the denial of Nil basic customs duty was unsustainable.

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