TaxTMI 
TaxTMI 
1985 (9) TMI 95
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.... court of first instance the appellants have preferred this appeal. 3. The respondent is the manufacturer of diverse goods including dry cell batteries, torches and allied products. For its dry batteries, the respondent requires high grade manganese ore (battery grade) which is imported from Gabon in Africa. Such high grade manganese ore is not available in India and is generally imported from other country, namely, West Africa for the manufacturing of such dry cell batteries. At the material time, June, 1975, manganese ore was a canalised item and the Minerals & Metals Trading Corporation of India Limited, a Government of India Undertaking was the canalising agency. For import of such manganese ore the procedure for importation of manganese ore since 1971 has been that the Chief Controller of Imports issues release orders on the basis of which indents are placed by the consumers with the said Minerals & Metals Trading Corporation of India Limited (hereinafter referred to as M.M.T.C.). On the basis of such indents the M.M.T.C. floats tender and effects the imports which are sold to the ultimate consumers sometimes on high seas by transfer of shipping documents. 4. In the inst....
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....Customs for Appraisement, Group I on or about 11th September, 1975 assessed the said goods under customs tariff Item no.28 as chemicals which attracts higher rate of duty under the said Item no.28. The respondent protested for such reclassification as sought to be done by the said Assistant Collector of Customs. The respondent, however, paid under protest a higher duty as claimed and cleared the said quantity of 392.60 metric tonnes. It is alleged by the respondent that the said protest was communicated verbally and subsequently confirmed in writing. It is the allegation of the respondent that the respondent was coerced to pay an excess sum of Rs. 1,69,955.74p in respect of the said goods. 7. The respondent alleges that the customs authorities reclassified the said ore from Item no.26 to 28 of the said Customs Tariff solely on the basis of a chemical test report which is, inter alia, as follows: "The sample is in the form of moist coarse grain and coarse powder. Percentage of Manganese dioxide is 83.1." 8. It is alleged by the respondent that on or about 18th September, 1975, the respondent has been served with a notice by the Assistant Collector of Customs for Appraisemen....
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....ause has been issued only in respect of a part of the consignment. On another part of the consignment the authorities have already assessed the duty under item no.28 and have collected such duty. As such, the authorities have made up their mind and the question that it is premature is no longer open to them. On such finding the learned Judge held that the application was not premature; and, (c) The existence of an alternative remedy by way of appeal was no bar to the writ petition as the remedy was not as efficacious as available under article 226 of the Constitution specially when the jurisdiction of the authorities was challenged. 10. The learned counsel for appellants contends before us that the Customs House Laboratory Test Report disclosed that the sample is in the form of moist coarse grain and coarse powder having 83.01% of manganese dioxide. 11. It is also the contention of the learned counsel for the appellants that the Central Board of Revenue's order and or direction is that battery grade manganese ore in the form of coarse grain or powder is correctly assessable under tariff item no.28. 12. The learned counsel for the appellants further submits that since th....
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....uthorities before the Supreme Court that whether the sprayers as imported were hand operated sprayers or power driven sprayers and decision on such question was entirely within the jurisdiction of the customs authorities, and it was to decide under which particular item the said goods would fall. The learned counsel also cited another decision of the Supreme Court in the case of A.V. Venkateswaram v. R.S. Wadhwani, reported in A.I.R. 1961 S.C. 1506 in which the question was whether the fountain pen in which certain of its essential parts, viz., nib, clip, and cap were plated with gold or silver falls within the category of "fountain pens complete" under item 45(3) or under item 61(8) as "articles plated with gold and silver". According to Supreme Court such question should be determined by the authorities concerned who were to decide the same and the importer if aggrieved could pursue the remedies available to him under the law and should not come to court under article 226 of the Constitution. 16. The learned counsel for the appellants referring to other Supreme Court decisions cited before the learned trial Judge, namely, Delhi Cloth &: General Mills Co. Ltd. v. R.R. Gup....
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....ructions because the manganese ore in coarse grain clearly falls under item no.26. Item no.28 was meant for chemicals, drugs and medicines. According to the learned counsel, these two are completely different sets of items and there could not be any room for any confusion as between the two sets of items. It is the contention of the learned counsel for the respondent that there was no identifiable and definite test for such classification, further, neither the said purported notice to show cause nor the said test report indicated definitely that [there] was definite basis of holding that the said manganese ore was chemical and as such should fall under item no.28 of the Indian Customs Tariff. It is also the contention of the learned counsel for the respondent that the earlier consignment was allowed to be cleared as the customs authorities were satisfied on examination that the said manganese ore was of coarse grain form and would clearly be classifiable under item no.26. It is the submission of the learned counsel for the respondent that the appellants had failed to indicate any definite or reasonable prima facie basis for holding that the said goods were leviable under item no.28....
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....M.T.C. with the foreign seller, the contract form of M.M. T.C. with the respondent, invoice, certificate of foreign seller, the test report of the customs authorities, and the notice to show cause issued by the customs authorities that there cannot be any dispute that what has been imported is manganese ore being the metallic ore in powder and coarse grain. The learned counsel for the respondent submits that the learned Judge also accepted this admitted position and was pleased to hold that it was common case that what has been imported is manganese ore. It was submitted by the learned counsel for the respondent that such finding of the learned Judge of the court of first instance has not been challenged in this appeal. 24. The learned counsel for the respondent also submits that it is not the case of the customs department that the consignment in question has been treated and/or roasted and/or processed by chemical resulting in any alteration in the chemical structure of the ore. It is not the case of the customs authorities that the said manganese ore in the form it has been imported is not commercially known or understood to be manganese ore. 25. The learned counsel for th....
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....e goods fell under item no.26. The Assistant Collector of Customs (Refund) found that the goods were imported in powder form and mainly composed of tungsten oxide with small portion of iron and manganese oxide. The Assistant Collector held that the term "ore" mentioned in the text of item no.26 was confined to articles which were in the form or condition in which they were mined. Such ores in powder form could not qualify under item no.26 as they ceased to be in the condition in which they were mined. The Assistant Collector also found in that test case that the imported goods were ore concentrates and not wolfram as mixed. According to the Assistant Collector the concentration of ores was considered a manufacturing process which excluded its assessment under item no.26, Import Customs Tariff. In appeal the Appellate Collector of Customs held that the goods in question were of special specification by dressing and therefore not classifiable as ores. On a revision to the Government of India the Joint Secretary held that examination of a sample that (sic) the goods were in the form of fairly uniform granules. Further, the said authorities held that they had been separated....
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....was leviable on them. The appellants were entitled to the refund of the amounts which were paid by them by way of duty." 28. The learned trial Judge relying on the aforesaid observation of the Supreme Court held that what has been imported is manganese ore and such ore having been imported in the from of powder and/or coarse grains a dispute between the parties arose whether the same should be assessed as chemical. The similar controversy has been fully resolved by the decision of the Supreme. Court in the said case reported in 1983 E.L.T. 1542 (S.C. = A.I.R. 1972 S.C. 2551 (Minerals & Metals Trading Corporation India Ltd. v. Union of India) (supra). The learned trial Judge also observed that in the instant case the imported goods had been assessed as a chemical preparation only on the ground that the ore was imported in the form of moist coarse grains and coarse powder and on no other ground. The import has been effected under a licence for manganese ore and has not been found to have taken by any chemical resulting in an alteration of the chemical structure of the ore. We entirely agree with the said views of the learned Judge and we do not see any reason to differ from the sa....
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....ction and/or ruling of the Central Board of Revenue, dated 29th December, 1955 which, inter alia, mentioned that battery grade manganese ore in the form of coarse powder was correctly assessable under item no. 28 of the Indian Customs Tariff. It seems to us that the appellants issued the impugned notice to show cause on the basis of the said direction and/or ruling contained in the Central Board of Revenue's order dated, 29th December, 1955. In our view the assessing authority while assessing the said goods as a chemical did not have any acceptable materials on the basis of which the said assessing authority could come to even a prima facie conclusion that the said ore was not a metallic ore but a chemical assessable under item no. 28 of the Indian Customs Tariff. Further, in our view, the said ruling and/or direction, dated December 29, 1955 did not contain any basis to indicate as to why such battery grade manganese ore in the form of coarse grain and/or powder was correctly assessable under item no. 28 of the Indian Customs Tariff. It was also not indicated by the assessing authority in any of the documents on record or in the affidavit filed before the trial court that whether ....