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1998 (9) TMI 599
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....t US $ 0.52 per lb. (CIF) and as the goods were without declaration of any grade as per NARI specification, representative samples were drawn from the goods and were sent to Custom House Laboratory for chemical examination. On receipt of the result of the test report, the Department entertained a view that the goods in question were not brass waste classifiable under Tariff Heading 74.04 of the Customs Tariff Act, 1975. But the same was brass powder classifiable under Heading 74.06 and the residue classifiable under Heading 2620.90. Accordingly, a show cause notice was issued by the Assistant Commissioner on 23-5-1990 alleging that the consignment in question consisted of materials other than brass waste and scrap, as declared by the appellants and proposing its confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962 and penalty under Section 112 of the Customs Act, 1962. 1.2 During adjudication, the appellants contested the allegations vigorously and produced on record expert opinion in the shape of certificates of various authoritative persons. Test report of the tests conducted by the appellants from the representative samples given to them by the Custom H....
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.... it did not and could not cease to be Brass Waste. The said Brass Waste had arisen during grinding process undertaken for manufacture of various Brass articles. This position has been certified by the foreign supplier in its certificates at pages 35 to 37 of the paper book. (c) The fact that such material in powdery form arising during different manufacturing processes is known, dealt with and regarded in the market as Brass Waste and Scrap had also been certified by The East India Metal Association in its certificate dated 18-9-1990 (page 34). (d) Note 6 (a) of Section XV of the First Schedule to the Customs Tariff Act, 1975 (in short the 1975 Act) defines the expression "Waste and Scrap" to mean metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons. The said definition of waste and scrap given in the Customs Tariff is fully satisfied in respect of the said goods. The said goods imported by the appellant have got only one use, namely, being melted for recovery of metal. This position is also quite clear from the ....
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....d, fresh samples could have been easily drawn from the consignment for being tested by independent laboratories and experts. (g) In so far as the certificate given by the foreign supplier is concerned, the Additional Collector had ignored the same simply by alleging that it was obtained after the proceedings were initiated by the Customs Authorities. The Additional Collector failed to appreciate that obviously this was bound to be so in as much as the occasion to get the said certificate arose only in view of the objections raised by the Customs Authorities. (h) It is submitted that the fact that Brass Waste and Scrap may be in powdery form has also been recognised in the Explanatory Notes below Heading No. 74.04 in the Harmonised Commodity Description and Coding System (in short HSN). The Additional Commissioner has ignored the Explanatory Notes in HSN simply by alleging that there was no presence of any lubricants in the goods in question. It is submitted that the said reason given by the Additional Commissioner is totally misconceived. The presence of lubricants in such waste depends on the process from which the waste arises and d....
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....ces as a basis for electroplating, etc. The flakes are mainly used as a metallic pigment in the manufacture of inks and paints. The flakes are used directly as metallic colouring matter by blowing them e.g., on to a varnished surface to which they adhere." (b) The tests laid down in the aforesaid Explanatory Notes of HSN are not at all satisfied in respect of the said Brass Waste. The said Brass Waste imported by the appellant was not produced by any of the processes mentioned in the said Explanatory Notes nor it has got the characteristics of powders as mentioned in the said Explanatory Notes nor it is capable of being used for any of the purposes mentioned in the said Explanatory Notes. Obviously there can be no scope to classify the said waste as powders. (c) The fact that Brass Powders covered by Heading No. 74.06 are completely different products, manufactured by completely different processes, have completely different characteristics and completely different uses and functions will also be fully clear from the following literature/evidence relied upon by the appellant before the Additional Collector : (i) &n....
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....s mentioned in the aforesaid authoritative books and literature nor it has got the characteristics of powders nor it is capable of being used for the functions and uses as mentioned above. In none of the said authoritative books and literature, such waste arising during grinding process for manufacture of Brass Articles has been treated as Brass Powder. From the said authoritative books, documents and evidence produced by the appellant it was quite clear that copper and copper alloy powders, as known, dealt with and regarded in commercial parlance are manufactured by definite manufacturing process. Insofar as the said waste imported by the appellant is concerned, it was not manufactured by any such process by which brass powders are manufactured but just arose as a waste material during the manufacture of brass articles. Furthermore, copper and copper alloy powders are manufactured for different uses and the process of manufacture is selected depending upon the type of powder desired and the properties required. There is no such thing in the case of the said material imported by the appellant which just arose as a waste during the manufacturing process of brass articles. Furthermor....
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....ods in question are classifiable under any particular Heading or sub-heading is on the Department. The said burden has not at all been discharged in the instant case. It is submitted that the burden to prove that the goods in question are classifiable under a particular Heading or sub-heading is on the Department and the same has to be discharged by adducing proper evidence. In the instant case the said burden has not at all been discharged by the Department. There is not even an iota of evidence to show that the goods in question were Brass Powders or that the same were classifiable under Heading No. 74.06. In support of this submission, reliance is being placed on the following decisions : (i) 1996 (87) E.L.T. 12 = 1996 (16) RLT 619 (S.C.) [UOI v. Garware Nylons Limited] (ii) 1997 (89) E.L.T. 16 = 1996 (17) RLT 807 (S.C.) [Hindustan Ferodo Limited v. CCE] (iii) 1994 (74) E.L.T. 794 [CC v. S.S. Enterprises] 2.4 The Additional Collector's reliance on the Chemical Test Reports is totally misconceived. The said Test Reports are at pages 28 to 30 of the paper book. The said Test Reports only mention about ....
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....l petition, the appellants submitted that the goods in question were lawfully and validly imported by the appellant and confiscation thereof under Section 111(d) and 111(m) of the Customs Act and demand of redemption fine of Rs. 4 lakhs and levy of penalty of Rs. 25,000/- was wholly illegal and invalid. Accordingly, learned Advocate prayed that the instant appeal may be allowed with consequential reliefs. 3. We have also heard Shri T. Premkumar, learned SDR for the Revenue, who has reiterated the reasoning of the authorities below and submitted that as per the HSN Explanatory Notes, the goods are to be assessed as Brass Powder under Tariff Heading 74.06. He also drew attention of the Bench to the effect that in all the import papers, grades were mentioned as per NARI specification. Attention was also drawn to the Test Report which clearly shows that the goods were in powdered form. He argued that Section Note 6 (b) is statutory and binding wherein self-contained definition of powder has been given. If the appellants were aggrieved with the Test Report they could have asked for a re-test. In this regard, he places reliance on the Supreme Court's decision in the case of Relia....
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....ple as such 62.0% by weight, rest being mainly zinc." Placing reliance upon the above test reports, the adjudicating authority has observed that from the same, it is clear that the goods are covered Powders classifiable under Heading 74.06. However, we find that as per the definition of Powder given in Section Note 6, the products of which there is 90% or more by weight passes through a Sieve, having a mesh aperture of 1 mm. As rightly pointed out by the Advocate that the Test Report does not satisfy the above criteria. The Test Reports do not indicate that the goods are metal powders within the meaning of Heading 74.06. We also find great force in the submission of the learned Advocate that as per the technical literature on record read with the H.S.N. Explanatory Notes and the Heading No. 74.06, the process of manufacture of Brass Powder is completely different than the process through which the Brass Waste emerges. Merely because the Waste and Scrap are in powdered form, the same will not be considered as Waste and Scrap Brass Powders which are produced by highly technical and sophisticated manufacturing process and have their uses in different fields. From the technical lite....