TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 538
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....of the Superintendent (Import Shed) that the Graphite blocks required to be classified under CTH 3801, the case was referred to Special Intelligence & Investigation Branch (SIIB). During the course of scrutiny of the import documents, it was observed that the import was made from their group company M/s. Mersen Chongqing Co. Ltd., China against invoice No.402931 dated 09.06.2014 and in the Country of Origin Certificate dated 11.06.2014, the classification was indicated as CTH 3801. Thereafter, a detailed investigation was initiated and on completion of the investigation, a show-cause notice was issued on 15.12.2014 alleging mis-classification of the imported goods under CTH 69031010, whereas the correct classification of the goods imported should be under CTH 38011000; differential duty of Rs.38,08,278/- was demanded for the period from 26.06.2012 to 08.07.2014 along with interest and penalty. On adjudication, the imported goods for the relevant period has been reclassified under CTH 38011000 and differential duty of Rs.38,08,728/- was confirmed along with interest and penalty equivalent to duty under Section 114A, penalty of Rs.2.00 lakhs under Section 112 and penalty of Rs.5.00 l....
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....ducts; however, Graphite is classified as ceramic because it is non-metallic and inorganic. Referring to Note 1 of Chapter 69, he has submitted that ceramic products apply to products obtained by firing inorganic non-metallic materials. The imported Graphite blocks are directly used in high-temperature applications and are not merely raw materials, undermining the classification under CTH 3801. Further, he has submitted that the learned Commissioner (Appeals) failed to appreciate the HSN notes that Chapter 38 excludes refractory goods especially those based on artificial graphite. The appellant in their submissions emphasised that imported graphite blocks were surface-finished and designed for high-temperature applications over 1500 C which clearly fall under CTH 69029020. In support, he referred to the Advance Ruling of CAAR, Mumbai wherein it is observed that Raw Silicon Carbide Bricks are classified under CTH 6902 2040. Further, referring to Rule 1 of the General Rules of Interpretation, he has submitted that the classification is determined by the specific terms of the headings and subheadings. The imported goods specifically fall under the description of 'refractory go....
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....gs of the learned Commissioner (Appeals). Referring to Chapter 69, the learned AR has submitted that the said chapter applies only to 'ceramic products' which has been fired after shaping. In the present case, the imported goods are artificial Graphite (Graphite blocks); hence do not fall under the scope of the Chapter Note 1 of the Chapter 69; therefore, the classification as ordered by the authorities below under CTH 3801 is correct. Also, the appellant had mis-declared the goods despite being warned by the Customs broker that the correct classification of artificial Graphite was under CTH 3801 but they mis-declared it under CTH 6903; therefore, invocation of extended period of limitation is justified. Also, since the goods were seized and later released provisionally, its confiscation and imposition of fine is justified. 5. Heard both sides and perused the records. 6. The issues involved in the present appeals are, whether the imported Graphite blocks be classifiable under CTH 69031010 / 69029020 as claimed by the appellant or under CTH 38019000 as confirmed by the authorities; extended period of limitation is invocable. 7. The undisputed facts of the case are that the ....
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.... kind used for non-electrical purposes these usually fall in heading 68.15 (e.g., filters, discs, bearings, moulds, acid-resistant bricks, etc.); those of a kind used for electrical purposes fall in heading 85.45) (d) Refractory goods, fired as ceramics, with a basis of artificial graphite (heading 69.02 or 69.03). (e) Blocks, plates, bars and similar semi-manufactures, of artificial graphite which also contain powders of silver (heading 71.06) Chapter 6902 is extracted below:- Tariff Item Description of goods Unit Rate of duty Standard Preferential Area S (1) (2) (3) (4) (5) 6902 Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods, other than those of siliceous fossil meals or similar siliceous earths. 6902 10 - Containing by weight, singly or together, more than 50% of the elements Mg, Ca or Cr, expressed as MgO, CaO or Cr203: 6902 10 10 --- Magnesite bricks and shapes mt 10% - 6902 10 20 Chrome magnesite bricks mt 10% - 6902 10 30 Magnesite ch....
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....square / rectangle blocks of different sizes. These blocks are for refractory applications as it can withstand very high temperature and it does not loose shape, structural properties and remains stable at high temperature. It has extensive use in various glass industries, furnaces etc. In his statement dated 28.07.2014, Shri Sathish Sivaraman, Chief Financial Officer explaining the manufacturing facility in their factory informed that the imported Isostatic Graphite blocks and insulating material to machine parts are used for high temperature / refractory applications in industries like float glass, fibre glass, optic fibre, furnace parts, continuous casting dies, crucibles. The manufacturing process involves cutting and shaping of the blocks using conventional machining including CNC milling. Their major products include parts for vacuum furnaces for heat treatment, continuous casting dies, applicator rollers etc. and their major customers include M/s. Indo US Mimtec, M/s. Lakshmi Vaccum Technologies etc. They machine and supply the spare parts as per the requirement of the customers as mentioned in the purchase order. Further, explaining the process of manufacture of imported Gr....
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....ustries like glass industries, furnaces etc. It is the claim of the appellant that the Graphite blocks are the raw materials for the manufacture of goods, which include refractory products; hence it is out of the purview of Chapter 3801. The said argument is fallacious in the sense that the condition in which the goods were imported are relevant for its classification and not what it would be after subjecting to various processes in the importer's factory. The imported goods are thus artificial Graphite in blocks and not in the form of 'ceramic products' which could be used as refractory material directly. Therefore, the Graphite blocks imported by the appellant are rightly classifiable under CTH 38019000. 11. On the issue of invocation of extended period of limitation, we find that the appellant had initially declared classification of Graphite blocks under the heading 38019000 but abruptly later changed to 69031010 viz. Magnesia carbon bricks, shapes and graphitised alumina, even though their Customs Broker had warned such classification would invite evasion of customs duty but the appellant had intentionally ignored the same suggestion of the Customs Broker only with an ob....