2024 (5) TMI 1664 - AT - Customs

Classification of imported ore or concentrate: HSN notes and absence of sample testing resulted in appeal allowed.

Classification of imported material as ore or concentrate was determined by applying HSN explanatory notes to tariff classification, with no fixed ... Classification of imported goods as ore or concentrate - reliance on HSN explanatory notes for tariff classification - non-drawal of samples and requirement of testing - denial of exemption notification - HELD THAT:- The Third Member has expressed his opinion as follows: ' no fixed percentage of concentration of ore is prescribed in the Tariff for determining if it is ore or concentrate, non-drawal of samples and testing is not fatal to the proceedings as held by learned Member (T). - HSN explanatory notes for the purpose of classification and leviability of duty. - Commissioner (Appeals) was not correct in upholding the Order-in-Original passed by the Original Authority. - Original Authority/Adjudicating Authority has erred in denying the exemption notification to the imported ore by holding that these were in the nature of concentrate ' In terms of the opinion expressed by the Learned Third Member, this appeal stands allowed in favour of the Appellant/Assessee. Appeal allowed. Impugned order is set aside. Issues: (i) Whether the issue is covered by this Bench's earlier Final Order No. A/31006-31046/2017 dated 22.06.2017; (ii) Whether non-drawal of samples/testing is fatal to classification proceedings; (iii) Whether HSN explanatory notes can be relied upon for classification and leviability of customs duty; (iv) Whether the Commissioner (Appeals) was right in upholding the original adjudicating order; (v) Whether the Original Authority correctly denied exemption by treating imported ores as concentrates.Issue (i): Whether the issue is covered by this Bench's earlier Final Order No. A/31006-31046/2017 dated 22.06.2017.Analysis: The precedent decision of the Bench in Final Order No. A/31006-31046/2017 dated 22.06.2017 was examined and found to be applicable on the facts and legal questions raised in the present proceedings.Conclusion: The issue is squarely covered by the earlier Bench decision in Final Order No. A/31006-31046/2017 dated 22.06.2017.Issue (ii): Whether non-drawal of samples/testing is fatal to classification proceedings.Analysis: There is no tariff provision prescribing a fixed percentage of concentration to distinguish ore from concentrate; therefore absence of sample drawal and laboratory testing does not automatically invalidate classification or adjudication where other evidence exists.Conclusion: Non-drawal of samples and testing is not fatal to the proceedings.Issue (iii): Whether HSN explanatory notes can be relied upon for classification and leviability of customs duty.Analysis: HSN explanatory notes and chapter notes were considered as interpretative aids for proper classification and for determining duty liability in absence of conclusive alternate evidence.Conclusion: Reliance can be placed on HSN explanatory notes for classification and leviability of duty.Issue (iv): Whether the Commissioner (Appeals) was right in upholding the original adjudicating order.Analysis: On examination of evidence and applicable classification principles, the upholding of the original order was found to be erroneous in light of the correct application of precedent and classification aids.Conclusion: The Commissioner (Appeals) was not correct in upholding the Order-in-Original.Issue (v): Whether the Original Authority correctly denied exemption by treating imported ores as concentrates.Analysis: Evidence on record and proper application of classification principles, including HSN explanatory notes, do not support the Original Authority's characterization of the imported goods as concentrates for denying the exemption; the adjudicating authority's conclusion was contrary to those considerations.Conclusion: The Original Authority erred in denying the exemption notification by holding the imported goods to be concentrates.Final Conclusion: The appeal is allowed in favour of the appellant/assessee; the impugned order is set aside and the appellant is entitled to consequential benefits as per law.Ratio Decidendi: HSN explanatory notes and chapter notes are admissible interpretative aids for customs classification and duty leviability, and absence of sample testing is not fatal where no tariff prescribes a fixed concentration standard to distinguish ore from concentrate; mischaracterisation by the adjudicating authority warrants setting aside the order and granting relief under the exemption notification.