TaxTMI 
TaxTMI 
2026 (8) TMI 1807
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....al /10526/2018 in Customs Appeal/10674/2018, Customs Cross Appeal /10527/2018 in Customs Appeal/10675/2018, Customs Cross Appeal /10528/2018 in Customs Appeal /10676/2018 And Customs Appeal/11597/2018, Customs Appeal /13159/2018, Customs Appeal /13160/2018, Customs Appeal /13161/2018, Customs Appeal /13162/2018, Customs Appeal/13163/2018, Customs Appeal /13164/2018, Customs Appeal /13165/2018, Customs Appeal /13166/2018, Customs Appeal /13167/2018, Customs Appeal /13168/2018 For the Appellant : Shri Rajat Mittal, Advocates Appeared For the Respondent : Shri Girish Nair, Authorised Representative appeared ORDER SOMESH ARORA: This is second round of litigation. In the first stage when the matter was decided by this Bench (different composition) affording relief to the party, it was contested right up to the Apex Court by the department. The order passed by the Hon'ble Supreme Court as reported in 2022 (380) ELT 243 SC, in the matter of the Commissioner of Customs, Mundra vs Mittal Pigments Private Limited directs and observes as follows: "2. During the course of the hearing of the civil appeal it has emerged before this Court that the bunal dated 25 April, 201....
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.... being shown some custom documents filed at Port of Loading obtained from Shipping Lines in which the subject goods were declared as Lead Scrap with CTH 7802, he agreed that the subject imports were actually waste and scrap of lead obtained from batteries. When specifically asked about Environment Clearance, he further admitted that all their lead metal extraction plants were Secondary Mettallurgical Plants and covered under Secondary Metallurgical Industry as per EIA Notification of 2006. 1.4 The Test Reports from Customs Laboratory, Kandia reported that the samples. were greyish black powder having soft lumps, on breaking showed white colour in few It is mainly composed of Lead Sulphate together with small amount of carbonaceous matter, siliceous matter and iron etc. The lead contents in the import documents was declared as 40% whereas in the Test Reports it was found to be 65.8% and 65.7% for RG Pigments and for consignment of Jammu Pigments Ltd was found to be 67.08%. 1.5 Further, reports from Customs Laboratory, CH Nhava Sheva reported that the goods were mixture of grey powder along with friable lumps of irregular shape and size; that the goods were other than 'Lead....
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....r of Primary Lead in India i.e. Lead Metal from Lead Concentrate and the importers were not involved in production of primary lead from lead concentrate. It was also clear from the letter dated 21.08.2015 from Central Polution Control Board, Delhi that the manufacturing units of the importer are Secondary Producers of Lead i.e. engaged in recovery of Lead Metal by recycling Lead Scrap and are not allowed to process Lead Concentrate for production of lead. 1.11 He further found that the description mentioned in Load Port Customs Export Document in most of the cases shows the description as "Lead Waste/Scrap" and CTH as 7802 but mis-declared in the Bills of Entry under CTH 26070000. The Pre-Shipment Inspection Certificate also certifies the goods to be metallic waste / scrap/seconds / defective. He further found that the suppliers of the importers viz. "Shar Metal Scrap Co Ltd, UAE", "Al Muqarram Metal Scrap TR CO LLC etc are exporters of scrap metals. He further found that the Pre Shipment Inspection Agencies authorized by Proper Authority to conduct specified inspections and certify the goods to be Mettalic waste / scrap or otherwise have confirmed in their certificates and thro....
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....as 65.6% and 68.66% and presence of metals Zinc, Copper, Iron, antimony and arsenic were detected in all samples but silver was not detected in any of the samples. The metallic/plastic parts found in the consignments. were also sent to CRCL, New Delhi separately and in this case CRCL, New Delhi opined that "the sample has the resemblance with Lead Acid Battery parts". As the opinion of Director, CRCL, New Delhi was in sync with the reports of Customs Laboratory, Nhava Sheva, the Adjudicating Authority held that the impugned import goods was none other than "Lead Scrap/Waste of Lead Battery" and the contention of the authorize representative claiming the same as "Lead Concentrate" was not correct, appeared to be an afterthought and only an attempt to deviate the issue. 1.17 The Adjudicating Authority further observed that the discussion on the subject had revealed the actual identity of the impugned goods to be "Lead Waste / Scrap of Lead Battery", more precisely "washed & dried electrode paste derived from Lead Acid Battery" which are precisely covered under CTH 78020090. He also held that the importers were not eligible to avail the benefit of exemption prescribed at Sr. No. 11....
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....M/s Mittal Pigments As per the department, Shri Ramesh Agarwal in his statement submitted as under: - Imported goods are not sold as such to any third party. - Imported goods are referred to as 'Lead Concentrate' in 'business parlance". - Agreed that the imported item is "lead waste' or 'scrap' on being shown the details/literature, etc. - The plant of Mittal Pigments Private Limited was secondary Metallurgical Industrial Plant. - Agreed that Metal Ore is not an input for Secondary Metallurgical Plant. - They declared the metal scrap as lead concentrate as it looked like lead concentrate. - Apart from antimony, copper, arsenic, no other metal is produced in the process. ii. Statement of officials of Customs Laboratory, Kandla Statement of Shri G.P Sharma Since the Customs Laboratory, Kandla described the impugned goods as lead concentrate". the DRI officials in order to contest the report of the Customs Laboratory, Kandla examined the officials of the Customs Laboratory, Kandla. As per the Statement of Shri G.P Sharma and in charge of Customs Laborator....
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....ing mineral materials. - The assay results show a very high lead content, measured at: * 65.8% (Sample under TM 06/2014-15), and * 65.7% (Sample under TM 07/2014-15), indicating a substantial presence of lead consistent with lead-bearing mineral products. - Notably, the Kandla laboratory does not describe the goods as scrap or waste. Customs Laboratory, C.H. Nhava Sheva - Test Reports dated 06.01.2015 - States that the samples are "other than Lead Concentrate" and asserts that the material exhibits "characteristics of used lead battery scrap." In this report, the laboratory does not provide any detailed chemical composition, assay values, or metallurgical analysis to substantiate its opinion. CRCL Testing and Findings Sample Registration Nos. CLR-22 and CLR-23, both dated 15.10.2015. - In these reports, CRCL recorded that the samples did not exhibit the characteristics of Lead Concentrate and instead resembled washed and dried electrode paste derived from used lead-acid batteries. - The laboratory quantified the lead content in the two samples at 65.6% and 68.66% respectively, and additionally....
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....orically opining that: "The sample has no characteristics of Lead Concentrate: it has the characteristics of washed and dried electrode paste derived from used Lead-Acid Battery." Factory Samples examined at JNCH, Nhava Sheva (Lab No. 173 DRI/4/3/15 dated 28.04.2015. based on Test Memo No. 38 dated 02.03.2015) - The DRI also drew samples from the factory premises of M/s Mittal Pigments Pvt. Ltd., Kota, where certain imported consignments were stored. These samples were collected under a Panchanama dated 17.11.2014 and initially sent for analysis to the Customs Laboratory at JNCH, Nhava Sheva. - The JNCH laboratory issued its report (Lab No. 173 DRI/4/3/15 dated 28.04.2015, based on Test Memo No. 38 dated 02.03.2015), observing that the material "had the composition of Lead Concentrate." - To obtain clarity, the DRI sent follow-up letters on 08.07.2015 and 23.12.2015, specifically asking the Joint Director of the Customs Laboratory to explain what was meant by "composition of Lead Concentrate." These letters, however, received no reply from the laboratory. - The DRI forwarded the remnants of the factory sample to CRCL, New Delhi under Tes....
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....ritative chemical technology reference. The Department emphasizes that primary lead is generally extracted from such concentrates using blast furnace, ISASMELT, KIVCET, QSL, etc. It highlights that rotary furnaces are not used for primary lead ore concentrates, but instead for secondary lead recovery from scrap. - In Para 7.1 (iv) Lead & Zinc Market Survey (MS-54) - The Market Survey report from the Indian Bureau of Mines is cited to explain that lead and zinc ores generally occur together. Smelting of ore concentrates normally occurs in blast furnaces or other primary smelting technologies, not rotary furnaces. The survey also states that Hindustan Zinc Ltd. is the only primary lead producer in India, operating smelters for the extraction of primary lead. Secondary producers (including Mittal Pigments, as per the Department) obtain lead from battery scrap rather than ore. - In Para 7.1 (v) Lead and Zinc Industry in India-ILZDA (2013 Overview)- the ILZDA overview reiterates that India's primary lead production comes exclusively from Hindustan Zinc Ltd. The Department argues that since Mittal Pigments: operates rotary furnaces, and did not report any silver rec....
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....pugned Goods have composition of Lead Concentrate As per Kirk-Othmer Encyclopaedia of Chemical Technology (4" Edition), lead concentrate has: Pb.-45% to 75% Zinc-0% to 15% Gold-0% to 0.001% Silver-0% to 0.15% Copper-0% to 3% Antimony-0.1% to 2% Fe-1% to 8% Cao-traces to 3.0% Sulphur (S)-10% to 30% This is consistent with the imported goods. Refer Chemical composition as described in Para 6.1 (as per Kandla Laboratory report No. 500/501 dated 11.12.2014 in respect of TM No. 06/2014-15 & 07/2014-15 dated 02.12.2014). Refer Para 6.1 of Page 49 of the Impugned Order. Also refer to the reports of Kandla Laboratory @ Page 124 as per which "it has the characteristics of lead concentrate". This is also consistent with the report of the CRCL discussed in Para 6.4 of the Impugned Order vide Reports No. C. No. 35/CRCL/2015-16 dated 22.01.2016 for TM No. 80 dated 18.11.2015 and Report C. No. 35/CRCL 2015-16 478 DRI (for TM No. 81 dated 18.11.2015 and C. No. 35/CRCL/2015-16 477 DRI (for TM No. 82 dated 18.11.2015, each of which opined "the goods are in the form of greyish fine powder with....
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.... - and is now unfit for its original use. Our imported goods do not satisfy a single one of these conditions. The chemical reports show a mineralogical mixture of lead sulphate, lead oxide, and minor naturally occurring trace metals (Zn, Cu, Fe, As, Sb). Contain no alloying metals used in battery plates (e.g., Ca, Sn. Sb in elevated proportions) Contain no plastics, rubber, separators, carbon, or other residues of battery manufacturing. Show no metallic form of lead in re-meltable pieces, Exist in fine powder/friable lumps, not in scrap form. A material that is non-metallic in appearance, chemically oxidic/sulphate, comprising mineral constituents, non-remeltable as-is, cannot fall under Chapter 78, because it is neither "metal", nor "waste" of metal, nor "scrap" of metal articles. Battery scrap has a distinct, well-known Composition that does NOT match the imported goods Moreover, if the imported product was indeed a battery scrap, it would have contained 99 percent lead. Absence of silver recovery is a flawed argument In Para 7.5 Pages 58-59, the department relies on the ER-1 rec....
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....E 7325446 & 7325448 Referred in continuation of Para 6.1 (OIO Pg. 494 50 Concludes goods are "other than the lead concentrate". States that goods "have the characteristics of used lead battery scrap". Direct conflict with Kandla and later CRCL composition. No chemical composition revealed. 3 CRCL, New Delhi Test Reports Sample Regn Nos. CLR-22 & CLR-23, both dated 15.10.2015 Remnant samples of consignments under BE 7325446 & 7325448 (10.11.2014) sent on importer's request due to lab conflict Referred in OIO Para 6.3, Pg. -50 Opines that "samples have characteristics lead concentrate. They characteristics have of washed & dried electrode paste derived from lead acid battery. Lead content: 65.6% and 68.66%.- Presence of Zn, Cu, Fe, Sb, As detected, However, Silver not detected Composition (Pb 65-69% consistent with composition described in Kirk- Othmer. No comparison with known battery pastes composition. 4 CRCL, New Delhi Two reports both dated 16.10.2015, issued vide C. No.35/CRCL/2015/CL-410 DRI and CL-411 DRI Referred in OIO Para 6.3 @Page 50. Reports state that the "sample has the Resemblance with lead-acid battery ....
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....ays "not derived from Lead Acid Battery. 9 CRCL, New Delhi - metallic plastic parts from BE consignments Two reports dated 16.10.2015 (C. No. 35/CRCL/2015/CL-410 & 411 DRI)-same as at SI. 4 above Only metallic/plastic pieces from consignments under BE 7325446 & 7325448 Referred in OIO at Para 6.3 Metallic/plastic pieces have resemblance with lead-acid battery parts. This does not analyse the powder itself; just ancillary solid parts. Used by Dept to "colour" entire consignments as battery scrap which is an impermissible extrapolation. He thus, pointed out that out of 9 reports 3 are against them, two are inconclusive and four are in their favour. Erroneous reliance on Scientific Literature, Market Surveys, CPCB Correspondence etc. to presume that the Appellant Must be processing Battery Scrap and not Lead Concentrate under 2607 The Department relies on the literature (Paras 7.1(i)-(v); Pages 53-54); Market Surveys (Para 7.3-7.9@ Page 54-71), findings of the Adjudicating Authority in Para 71-78 [Para 20-22 to conclude that Mittal Pigments cannot be handling lead concentrate because it is not a primary producer, uses rotary furnaces. Wi....
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.... Foreign exporters' HS codes are not binding on Indian Customs. The present proceedings are squarely covered by the recent decision of the Hon'ble CESTAT, Ahmedabad in Gravitas India Ltd. v. Commissioner of Customs, Mundra, 2024 (390) ELT 394 (Tri-Ahmd.), Final Order Nos. 10781-82/2024 dated 09.04.2024. This judgment deals with the same product (lead concentrate), identical composition, and arises from the same set of suppliers, PSIC practices, and identical DRI methodology. including: reliance on CRCL reports, reliance on load-port documents wrongly mentioning 7802, reliance on PSIC statements, and allegations that absence of gold/silver traces disproves "lead concentrate. All these grounds were rejected. The Gravitas judgment therefore squarely applies and is determinative of the issue. Following the binding precedent, the present classification under 7802 and all consequential allegations must fail. For DRI to be correct, ALL must be true simultaneously: * Multiple Customs Laboratory, Kandla lab reports are wrong. * JNCH, Nhava Sheva Report in respect of samples from factory is also wrong * Multi....
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.... * As per Supreme Court ruling in Gastrade International, opinion of the Expert needs to be given due weightage. (iii) PSIC and Export Documentation Are Trustworthy Evidence * PSICs issued on the basis of detailed port inspections certify the goods as metallic waste/scrap. * Exporter's country of origin certificates and Form 9 under Hazardous Waste Rules corroborate the scrap classification. * The appellant cannot claim ignorance of these documents which affirm the scrap nature. This indicates knowledge and intent. (iv) Intentional Misdeclaration to Evade Duty * The appellant's own director admitted to awareness that the material is lead battery scrap but maintained "lead concentrate" declaration for tariff benefits. * The consistent use of an incorrect classification leading to lower customs duty rates over several years reflects clear mens rea. * Import restrictions on scrap under Foreign Trade Policy (restricted item) were knowingly circumvented. (v) Redemption Fine Imposable * In Weston Components Ltd. (2000 (115) ELT 278 SC), the Supreme Court expressly held that redemptio....
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....disposal, or recycled into the local acid market. One of three main smelting processes is then used to reduce the lead fractions to produce lead bullion The majority of domestic battery scrap is processed in blast furnaces or rotary reverberatory furnaces. Used to produce a semi soft lead, a reverberatory furnace is more suitable for processing fine particles and may be operated in conjunction with a blast furnace. The reverberatory furnace is a rectangular shell lined with refractory brick, and is fired directly with oil or gas to a temperature of 1260°C. The material is heated by direct contact with combustion gases. The average furnace can process about 50 tonnes per day. About 47% of the charge is recovered as lead product and is periodically tapped into mold or holding pots. Forty six percent of the charge is removed as slag and later processed in blast furnaces. The remaining seven % of the furnace charge escapes as dust or fume. Short (batch) or long (continuous) rotary furnaces may be used. Slag from reverberatory furnaces is processed through the blast furnace for recovery of alloying elements. Blast furnaces produce hard lead from charges containing ....
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.... unscientific way has been practiced for a long time in India as a small scale industry mostly located in residential areas creating considerable pollution due to sulphur and lead emission. The recovery of lead is not very good due to slag matte losses and sulphur fumes. Cost effective scientific technologies are needed to be provided to these small scale operators. Lead can be recovered from waste battery scrap by electrolysis method as well. Ponomarev and Znev obtained compact lead of 99.5% purity from waste powder consisting of lead and zinc by electrolysis. The solution from lead electrolysis was used for zinc extraction." 4. Further additional submission post hearing as per liberty granted were submitted by A.R. as follows:- 4.1 At the outset, the issue involved is that M/s. Jammu Pigments Ltd and M/s. R.G Pigments Pvt Ltd (Importers) were importing Lead Waste / Scrap of Used Batteries /Lead Scrap by declaring the same as "Lead Concentrate under CTH 26070000. However, the said imported goods should have been properly classified under CTH 7802. Further, Lead Scrap/waste in powdered form merits classification under CTI 78020090 and is Restricted for import into In....
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....vided by our respective party. And please note, we had not found any of the consignment to be other than mettalic scrap, as declared by the client. 700 (4) Relevant portion of RUD-57-Lead & Zinc Market Survey (MS-34) Controller General, Indian Bureau of Mines - Page 336 "Hindustan Zinc Ltd (HZL) is the only producer of primary lead which operates three smelters having a total capacity of 93 thousand tonnes per year.." (5) Relevant portion of RUD 58-Lead & Zinc Industry in India: An Overview (2013) India Lead Zinc Development Association - Page 581 (6) Country of Origin Certificates from Dubai Chamber, UAE "78020000" "Lead Waste & Scrap" - Pages 811, 812 (7) Customs Load Port Documents: The Load Port Documents show the description as "Lead Scrap" and CTH as *78020000" Relevant Description Page No of RUD Description of goods as - Lead Scrap 585 to 588, 603, 606, 618 to 623, 629 to 634, 648 to 653, CTH as 78020000/78020010 585 to 588, 599, 600, 603, 606, 610, 618 to 623, 625, 629 to 632, 647 to 654, Lead Scrap Concentrate 600 (8) RUD 68-Letter F.No. B-29016/1(Misc)/15/HWMD dated 21.08.2015 ....
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..... 10781-82/2024) Present case (RUD reference) 1 Both matters arise from the same investigation F. No. DRI/AZU/GRU/LEAD/INT- 24/2014 - DRI, Gandhidham Regional Unit dated 23.11.2016 (paras 2 of the Judgment) The SCN issued to Mittal Pigments is F. No. DRI/AZU/GRU/LEAD/INT- 24/2014/ Mittal is the identical file. Refer SCN appended at Page 304 of Appeal No. C/10666/2018) 2 Test Memo proforma The Test Memos referred after Para 29 of the Judgment in Gravita India refers to six standard queries viz. percentage of lead; compound form etc. The identical six queries, verbatim, in every Test Memo (Refer RUD-48 @ p. 233; RUD-54 @ p. 250) 3 Same CRCL file number, sample registration and report date CRCL File No. - F. No. 26/Cus/C-21/2015-16 dated 30.12.2015 Sample Regn. No. CLR-26/30.11.2015 Report: Test Memo No. 77/2015-16 dated 04.11.2015 (Refer Judgment of Gravita just above Para 30) F. No. 26/Cus/C21/2015-16 dated 30.12.2015 Sample Regn. No. CLR-27/30.11.2015 Report: Test Memo No. 78/2015-16 dated 04.11.2015 (Refer RUD-54 @ pp. 249-250). 4 The clarificatory 'opinion' relied on by the Department CLR-26/30.11.2015 (TM 77) was the report....
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....ted goods as "composition of Lead Concentrate" This led to two DRI letters seeking clarification→ RUD- @ pp. 247-248. No reply was received so remnant sent to CRCL (RUD- @ pp. 249-250) 12 Contemporaneous imports Period September 2011 to August 2014 Overlapping period 13 Pre-shipment Inspection Agencies Statement It was contested by the department that statements of PSIAs that Pre-shipment Inspection Certificates are issued for waste/scrap (Ref. para 16) Similar statements relied on in RUD-24, RUD-25, RUD- 27, RUD-29 @ pp. 141-176 REBUTTAL TO DEPARTMENT'S EVIDENCE IN PARA 3 ITEM (1): THE RE-TEST REPORTS The Department's item (1) cites RUD pages 216 to 219 and 240 to 243. Those pages contain four re-test reports of the Central Revenues Control Laboratory, all dated 15.10.2015. The Department has quoted three sentences of conclusion from them. It has not quoted the composition. The composition is set out below from the Department's own RUD. Report / Test Memo RUD pg. Pb % Lead Oxide% Lead Sulphate% Metallic lead CLR-22/28.09.2015 216-217 6....
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...., silver 0.04%. Metallic lead is recorded as present only in "very small quantity ... in fine particle form (which could not be estimated)". 5.9 The Kirk-Othmer Encyclopaedia of Chemical Technology at RUD-56, pages 257-280, which the Department itself put on record as the authoritative specification for lead concentrate, the result is as follows: Constituent Kirk-Othmer range for lead concentrate (RUD-56) RUD-54 (CLR-27) result Within specification? Lead (pb) 45-75% 50.2% Yes Zinc (Zn) 0-15% 13.7% Yes Iron (Fe) 1.0-8.0% 4.3% Yes Silver (Ag) 0-0.15% 0.04% (detected) Yes 5.10 Four consequences follow, and each is fatal to a distinct limb of the Department's case: (a) The absence of silver is the foundation of the Department's items (4) and (5) in RUD-66 (ER-1 returns, pp. 814-816). Silver was in fact detected at 0.04%. Silver range for lead concentrate begins at 0%. (b) If the material is neither concentrate nor battery-derived, Chapter 78 is excluded. An off specification industrial product of inorganic nature is, not metal, not metal waste, and not a metal good rendered unusable by breakage ....
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.... As to items (6) and (7), the Dubai Chamber certificates of origin (RUD-65, pp. 811-813) and the load-port customs documents (RUD-59, pp. 582-666): (a) These are declarations made by foreign exporters before a foreign customs administration, in a foreign nomenclature, for foreign statistical and regulatory purposes. (b) The Department's own table concedes that the load-port documents describe the goods as "Lead Scrap Concentrate" at RUD page 600. The document at that page is a Dubai Customs export declaration of M/s. Sun Metal Casting LLC dated 13.04.2014 in which the "Goods Description" field reads "LEAD SCRAP/CONCENTRATE" against H.S. Code 78020000. ITEMS (4), (5) AND (8) 5.16 Items (4), (5) and (8) establish three propositions, (i) that Hindustan Zinc Ltd. is India's only primary lead producer (RUD-57 @ p. 336; RUD-58 @ p. 581); (ii) that primary and secondary metallurgical processes are distinct; and (iii) that the assessees hold registration as secondary metallurgical units and not environmental clearance for primary metallurgical processing (RUD68 @ pp. 819-820). Classification under the Customs Tariff is determine....
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....33 (Item No. 1 to 9). 6.2 We find guidance of the following case laws and we take support of following in reaching our conclusions. * 1987 (28) ELT 346 Jenson Enterprises vs Collector of Customs, Cochin and Another, Hon'ble High Court of Madras decided that in case of conflicting reports, the basis of scientific investigation is to be preferred them the opinion given without any basis. We are therefore of the view that varied descriptions given in various documents does not help the case of any party and emphasis is to made only to the scientific evidence and not mere nomenclature used by either side. * In 2026 (395) ELT 429 (Guj.) Aparajita Energy Pvt. Ltd. vs UOI, the Hon'ble High Court basing the decision in the Matter of Gastrade International vs CC Kandla reported in 2025 (392) ELT 529 (SC), in para 23 held as under:- "23. By applying the "most akin" test, as enunciated by the Apex Court in the case of Gastrade International (supra), the Customs authorities released the goods classified as Distillate Marine Fuel. In the present case, if the "most akin" test is applied, the same would, in fact, be in favour of the petitioner, as the respondents ....
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....set, we find that majority of the reports are in favour of the assessee out of 9 reports obtained. We find that Customs Laboratory, Kandla had given the report of the imported goods as lead concentrate in favour of the party stating that they have characteristics of 'lead concentrate', whereas Customs Laboratory at Nhava Sheva had indicated it to be 'other than the lead concentrate' in conflict with the Kandla report. The report did not reveal any chemical composition. The CRCL New Delhi vide report dated 15.10.2015 gave composition however gave report that the samples have characteristics of 'lead concentrate'. CRCL New Delhi report while dealing with the bits of metallic/ plastic parts found in the consignment, gave report that 'samples have resemblance with lead-acid battery parts'. In the other report dated 18.11.2015, CRCL New Delhi stated that the samples are greyish fine powder with small-friable lumps and also found some small amount of lead and zinc, silver, copper, cadmium, arsenic antimony, iron, sulphur in traces. CRCL New Delhi then gave a clarificatory letter at the behest of DRI vide letter dated 09.05.2016 that this sample has no characteristics of 'lead concentrate....
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....ific nature is primarily required to be proved through scientific tests. 6.4 We further find technical literature produced can be of use only if identity of the product is conclusively established which has not been the case in this particular instance. We also find that as indicated by the appellant, from the same investigation has arisen another case of Gravitas India Limited vs Commissioner of Customs, Mundra (reported in 2024 (390) ELT 394 (Tri. Amd.)) which has discussed at length the similarities in this case to that case and in which this Bench has eventually after discussion set aside the classification of the goods under Chapter 78 and even various reports and reached conclusions with the help of description in H.S.N. and its explainatory notes which is most potent tool of interpretation preferable to any technical literature, which may or may not offer assistance with the four folds of Chapter/ Section Notes etc., which have statutory force. We are therefore, inclined to adopt the reasoning given in that order as part of this order. Even the reports in that case were conflicting and are also being reproduced to show the similarities of the products: "2. Accord....
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....Delhi, vide Test Reports C. No. 35/CRCL/2016-17/CL-67(DRI) dated 05.08.2016, C. No. 25/CRCL/2016-17/CL-68(DRI) dated 05.08.2016, C. No. 35-Cus/CRCL/2016/CL-65-DRI/27.06.2017 dated 29.08.2016, C. No. 35-Cus/CRCL/2016/CL-66-DRI/27.06.2016 dated 01.09.2016 and C. No. 26Cus/C-9/2016-17 dated 03.10.2016 were not issued in respect of goods imported in Bills of entries which are subject matter of present show cause notice. Thus said test reports cannot be relied upon or applied to the goods which are imported under different bills of entries. 4. Department has relied on load port customs export documents filed by M/s. Sharif Metals Intl (Shipper) at load port in respect to the consignments imported under Bill of Lading ("B/L") dated 28.05.2013 and 20.05.2013. It was submitted that the said consignments are not subject matter of present SCN. 4.1 Further, department had relied upon 6 nos. of PSICs out of which five are related to the subject BoEs filed through the Jaipur ICD / Mundra port. In these PSICs it was mentioned that "the imported item(s) is actually a metallic scrap/waste/seconds/defective as per the internationally accepted parameters for such a classification".....
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....ts were using the imported lead concentrate in its own factory for extraction of lead. The assumption based upon CPCB letter F. No. B-29016/1(Misc.)/15/HWMD/9418 dated 21.08.2015 wherein it was stated that the Appellants has a secondary metallurgical factory. It was stated in the letter that "secondary metallurgical process is a process where lead metal is recovered by recycling of lead scrap. Department ignored the fact that appellants were also engaged in trading of lead concentrate. 10. Reliance was placed upon Chemical Technology, namely, Kirk-Othmer Encyclopaedia of Chemical Technology, Fifth Edition, Volume 14 (hereinafter referred to as 'Kirk-Othmer') which provides at page 734 that lead concentrate is a product having lead content between 45% to 75%, from which lead metal can be extracted economically by employing either primary or secondary methods of extraction. In the instant case, the lead concentrate imported by the Appellants has a high lead content mostly in the range of 60% to 70%. As per Kirk-Othmer (page 734 - table 3), the composition of lead concentrate is as provided below. Constituent Wt % Constituent Wt % Lead (Pb) 45-75....
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....nt to note that during the investigation DRI had failed to call for any evidence from HZL on the purchase of lead concentrate from Appellants as it was well known that HZL has purchased almost the entire imported quantity of lead concentrate from the Appellants. Again, it is important to note that DRI had recorded statements of various persons during investigations including calling for evidences from foreign shipping lines, agents and PSIAs located abroad but deliberately omitted to record any statements from officials of HZL. 15. The impugned order further observed that the goods were battery scrap/waste if the lead was present in the form of lead sulphate relying on the statements given by the officials of Customs House Laboratory, Kandla. It is submitted that presence of lead sulphate to prove lead scrap/waste is an incorrect premise as per the Kirk-Othmer wherein it has been stated that lead ore is found in ore mineral i.e. PbS, PbSO4 and PbCO3 i.e. the lead ore is found in nature in the form of lead sulphide (Galena ore), lead sulphate (Anglesite ore) and lead carbonate (Cerussite ore). This clears the fact that one of the form of lead ore is lead sulphate as well. T....
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....ntrate. It would be noticed that in respect of said lead concentrates the PSICs clearly described the goods as 'lead concentrate'. The reliance placed by DRI on the heading 'Description of metallic scrap' and clause (1) of the PSICs is entirely misplaced as it may have been retained by PSIAs while issuing the PSICs in their standard format which are generally issued for scrap and waste. 18. The lead bearing product was a powdered material with lead content around 62.9% and is known as lead concentrate in trade parlance/ common parlance. It is submitted that the common parlance test has been recognised by the Supreme court in the case of Pleasantime Products vs. Commissioner of Central Excise, Mumbai-I, 2009 (243) E.L.T. 641 (S.C.). The above Supreme Court judgment has been followed in the recent case of Indian Wood Products Co. Ltd. vs. Commr. Of Cus. & C. Ex., Meerut-II, 2017 (349) E.L.T. 524 (Tri. - All.), wherein it has been held that 'common trade parlance test' is to be considered for deciding classification of goods, unless the statute provides that reference is to be made to its technical meaning. In the present case, the statute does not provide for reference to an....
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....or lead content and the latter laboratory is of private sector. Similarly, the test reports of Customs JNCH labs obtained by DRI themselves after the start of investigations had categorically stated the samples to be of composition containing lead concentrate. This report had also been said to be not reliable by DRI. 23. Without prejudice to above it is submitted that statements of various persons cannot be relied upon in absence of cross examination. Thus statements cannot be relied upon in the present case. It was alleged that Appellants had mis-declared the subject goods. It was submitted that the goods imported by the Appellant shall be considered as "lead concentrate" and are correctly classified under CTI 2607 because: (i) The imported goods have 60%-70% lead content which is in consonance with the composition of "lead concentrate" as defined in the book of KirkOthmer (45%-75%). (ii) Kirk-Othmer states that percentages of gold and silver can range from 0% to 0.1% so absence of gold and silver traces in the imported goods cannot be the ground to classify the imported goods as lead scrap/waste instead of lead concentrate. (iii) Presence of 'l....
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....because the principal demand of customs duty is not justified on the ground of collusion, wilful misstatement, or suppression of facts. Therefore, for the same reasons the penalty cannot be imposed upon Mr. Krishna Gopal Gupta, General Manager, Gravita India Ltd. in individual capacity. 27. The A.R for the department relying extensively on impugned order submitted as follows:- 27.1 That the Lead from Lead concentrate is produced using blast furnance, whereas. Lead from Lead Scrap/ Waste can be recovered using a simple rotary furnace. That the Lead mostly occurs with Zinc, Silver and copper and in many mines value of Silver content often exceeds that of Lead however, the appellant company has not reported any manufacturing/ sale of even a single kilogram of Silver. It was noted that HZL is the only producer of primary Lead in India, i.e., producing Lead metal from Lead concentrate and the appellant company is not involved in production of primary Lead from Lead concentrate. The appellant company runs recycling plant and is engaged in recovery of Lead metal from various types of Lead Scraps and Wastes and is registered under Hazardous Wastes (Management, handling an....
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....Lead concentrate or Waste/ Scrap of Lead batteries. The adjudicating authority finds that the Customs Laboratory, Nhava Sheva opined that the subject goods had the composition of Lead concentrate, however, when the Joint Director was asked to clarify the term "it has the composition of Lead concentrate", no reply was received and when the remnant sample was sent to CRCL. New Delhi, it was confirmed that the goods were not having any characteristics of Lead concentrate and instead the goods were having the characteristics of Lead Scrap/ Waste. The similar reports were also received in respect of five samples taken from the goods cleared from Jaipur. That CRCL, New Delhi is the apex laboratory headed by a Director and CRCL, New Delhi has tested more parameters and its opinion confirmed that the goods are not having any characteristics of Lead concentrate, and instead having the characteristics of Lead Scrap/ Waste. 27.2 The Learned Commissioner (Appeals) has concluded that the subject goods imported by the appellant company are Lead Waste/ Scrap originating from Lead Batteries and the same are appropriately classifiable under T.I. 7802 0090. He also supported through the fin....
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....does not have the characteristics of 'lead concentrate'. It also came to the conclusion that it has the characteristics of "washed and dried electrodes paste derived from used lead acid battery". It did not report that the sample was lead scrap. 31. DRI also took remanent samples of another earlier imports made by the appellant vide Bill of Entry No. 4995856 dated 22.10.2011 and sent the same for testing to CRCL New, Delhi with the following letter dated 24.06.2016. The test report received from the CRCL New Delhi was as follows: The test report again indicated that the lead contained in the sample is in the form of lead compound namely lead oxide 18.2% and Lead Sulphate 60.3%. Apart from the said compound, the sample also contained the minuscule quantities of other materials. It did not report that the sample was lead scrap. 32. DRI also took samples of another earlier imports made by the appellant vide Bill of Entry No. 5019314 dated 25.10.2011 and sent the same for testing to CRCL New, Delhi with the following letter dated 24.06.2016. The test report received from the CRCL, New Delhi was as follows: The test report again indi....
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.... (2) (3) (4) (5) I.- CHEMICAL ELEMENTS 2824 lead oxides; red lead and orange lead 2824 10 - Lead monoxide (litharge, massicot) : 2824 10 10 --- Litharge kg. 10% - 2824 10 20 --- Massicot kg. 10% - 2824 90 00 - Other kg. 10% - 2833 Sulphates; alums; peroxosulphates (persulphates) - Sodium sulphates : 2833 11 00 -- Disodium sulphate kg. 12% - 2833 19 -- Other : 2833 19 10 --- Sodium hydrogen sulphate (acid sulphate) kg . 12% - 2833 19 20 --- Sodium pyrosulphate kg . 12% - 2833 19 90 --- Other kg . 12% - - Other sulphates : 2833 21 00 -- Of magnesium kg . 12% - 2833 22 -- Of aluminium : 2833 22 10 --- Aluminium sulphate (iron free) kg . 12% - ....
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.... 2833.29 -- Other : 2833.30 - Alums 2833.40 00 - Peroxosulphates (persulphates) (A) SULPHATES Subject to the exclusions mentioned in the introduction to this sub-Chapter, this heading covers the metal salts of sulphuric acid (H2SO4) (heading 28.07), but excludes mercury sulphates which fall in heading 28.52, ammonium sulphate which, even pure, falls in heading 31.02 or 31.05 and potassium sulphate, which, whether or not pure, falls in heading 31.04 or 31.05. The explanatory note further described the inclusions as follows. (13) Lead sulphates. (a) Artificial lead sulphate (PbSO4). Obtained from lead nitrate or acetate by precipitation with sulphuric acid; white powder or crystals, insoluble in water. Used in the manufacture of lead salts. (b) Basic lead sulphate. Prepared as greyish powder by heating together litharge, sodium chloride and sulphuric acid. May also be obtained by a metallurgical process, in which case it takes the form of a white powder. Used in the preparation of pigments, mastics and mixtures for the rubber industry. Natural lead sulphate (anglesite) is excluded (heading 26.07). ....
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....n are specifically covered by name in various sub entries of heading 2833. The test report indicates that there is practically no lead in metallic form in samples. The samples primarily consist of lead sulphate and lead oxide and therefore if the said goods are not "lead concentrate" as claimed by revenue then at best the same can be classifiable under chapter 28 under headings 2824 or 2832. The case of Revenue that the said goods are classifiable under heading 78020090, has absolutely no merit. In view of above, since the classification suggested by Revenue is not applicable to the said goods, the impugned order classifying the goods under Chapter 78 which applies to lead in metallic/primary form cannot be sustained. Since, we find that even on the basis of reports available, the case of the revenue cannot be sustained, we are not pronouncing on various grounds taken by the appellant about sample drawing process. The conflicting reports and to whom benefit of doubt will go, as also whether only appellant can seek retest or even department can of its own do so, just on the premise that particular lab was not competent, when department has a report contrary to its hypothesi....
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....ts The sample in the the form of indiatime of grey colour powder and grey colour friable lampe alongwith your wooden, siete preen The composition of - Gry paradic Letry bannies Sistematos Lavy boris Lead 6680% 64.5% INOM 1-VX 1. 38 x. Jime 1.3:2%. .1.1 k codinini 0.25 5 . 13 X Powder :53.12 Limpo = balance It has the composition of bread concentrate sealed sample method [mal Scanned with Document 2 11/1115 Directorate of Revenue Intelligence Gandhidham Regional Unit Plot No. 193, Sector - 4, Oslo, Gandhidham (Kutch) Tel: 02836-227891, 234948, 225298 Fax: 02836-239081, omall Id: driganrwenlo, In F. No: DRI/AZU/GRU/LEAD/INT-24/2014 Date: 04.11.2015 TEST MEMO NO. 77/2015-16 SI. No. Declared description : "Lead Concentrate" 1 Sample collected from: as From factory premises of M/s. Gravita India Ltd., Jaipur per Panchanama dated 18.11.2014 conducted at the factory premises. 2 Marks/ Description Remnant sample returned from Customs Lab JNCH Nhava Sheva 3 Test for: 1. (a) Percentage of 'Lead' content. (b) In which compound forms lead Is present. (c) Percentage of different lead bearing compounds 2. Percentage of....
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....xists in paste of lead-acid batteries (ii) Cerussite (lead carbonate) Not detected (sample not answered test for Carbonate) (iii) Galena (Lead sulphide) Not detected (sample not answered test for Sulphide) (iv) Pyromorphite (Phosphate and Chloride of lead) Not detected (sample not answered test for Phosphate) S. Whether it is Lead Ash/lead residue/lead scrap of spent lead acid batteries (i.e. derived from recycling of Lead batteries). Sample has characteristics of washed & dried Electrode Paste derived from used Lead Acid Battery. 6. If it is neither obtained from natural lead Ore and nor from Spent battery then specific identity/ description of the sample may be ascertained. Sample has characteristics of washed & dried Electrode Paste derived from used Lead Acid Battery. Sealed remnant is being returned separately. (Dr. Y.K.S. Rathore) Director (Revenue Laboratories) डा. वाई.के. à¤à¤¸. राठौर/Dr. Y.K.S. RATHORE निदेशक (राजसà¥à¤µ पà¥à¤°à¤¯à¥‹à¤—शाला) Director (Revenue Laboratories) NICHT ROK/Governmen....
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....s present In the form of Lead Oxide and Lead Sulphate with small amount of metallic lead in fine particle form (f) Percentage of different lead bearing compounds Lead Oxide= 28.5 % Lead Sulphate= 52.5 % 2. Percentage of other contents viz. Zinc, Silver, Copper, Cadmium, Bismuth, Arsenic, Iron, Sulphur ect. Zinc (Not detected), Silver (Not detected), Copper (Not detected), Cadmium (Not detected), Bismuth (Not detected), Antimony(0.599%), Arsenic (0.20%), Iron (.11 %). No free Sulphur Is detected 3. Whether It is Lead Concentrate obtained from naturally occurring Lead Ore of otherwise. Sample has no characteristics of Lead Concentrate, It has characteristics of washed & dried Electrode paste derived from used Lead Acid Battery. 4. If it is obtained from Lead Ore than nature of Ore viz. Sample has no characteristics of any type of Lead Ore. (v) Anglesite [Lead Sulphate) Literary evidence' reveals that Anglesite form of PbSO4 exists in paste of load-acid batteries also. (vt) Cerussite (Lead Carbonate) Not detected (vii) Galena (Lead"Sulphide) Not detected (viii) Pyromorphite (Phosphate & Chloride of lead) Not detected 5. Whether it is'lead ash/lead residue/lead-....
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....e form of Grey& Redible-torre coloured fritt frampol Porto. alerquite formal metallic places with oxidized Surfaces, Small broken metallic Pieces of with nothing & Ismall broken Plastic places. it is composed of hood oxide, head- · sulfate, small amount of metallic head atorquite small broker Plasticpicas as well as znie, how, Antimony etc. en traces. Result of Testadvised de textonamo are as believe C +0 Test Advised i Test Enemo Test Result/ Reply of Overy 1. 4 Percentof I had content $3.0% b) In which compound form. Lead is procent In the form of head oxide & head sulphate with smallamount & metallic head. (c) Percentage 4 different head bearing comprends Land oxidy=18.2%. Load Sulphat=60.3% 2. Percentage& other contrats viz. zuic, silver, copper coding Bismuth, Arsenic" Sulphur ate. Zinc = 0. 10'%., silver (Not directed), copper (Not detected), Cadmium (Not detected ), Pitomuth ( not detected), ~ Answeris (Not detected), Antimony = 0.4%, iron = 0.191. No drie Sulphur detected 3. which it is head concentrate obtained from internally occuring head one or offinite . Sample has no characteristics of head concentrati It has the characteristics of washed & dried ele....
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....tery then specific identity / description of the goods may be ascertained. مصر 2416 [Dr. S. J. Singh) - Deputy Director, DRI, Gandhidham To, The Director Central Revenues Control Laboratory; Hill Side Road, Pusa, LA.R.I., New Delhi - 110005 Document 9 0.1.0.35 | CRCL/2016-17/CL- 68 (DRI) at 05.8.2016 RAT.50193141725.102011 T.M.NO: 43|DRI GRU Sport the pampi & the day of redition bran Chound chable lempet & Powder alongwith small metallic white lies with oxidized sustancias & small broke Plastic Piece .1 is composed of wood oxide, head sulphat, small annat of metallic hand alongwith small broker Phatic pieces as well as iron, Antimony ate. it traces. Renault of text andived ai tetmeme are as bele of &He Tal- Audit-4 ATA-les Test Results | Reply of owany 1. @ Percentofing wood cette 1. 1.9%. 5) zusaucepan need to bebet In theday of food oxide & Food heleplate with kanallarbent of matuolie Land. @ wood benny content Percentage & dellenet Loa) byd- ; 34+676 load sulph, b-52.1% 2. . Percentage of eller contente viz. que. sil copper Commission, parentho troute Many , hvor, collida. zucker detected, silva ( Not deducted), copper ( Notdetected). Comun (1)....
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....eries). G. If it is neither obtained from natural Lead Ore and nor from Spent Battery then specific identity / description of the goods may be ascertained. Jan 941016 (Dr. S. J. Singh) Deputy Director, DRI, Gandhidham To, The Director. Central Revenues Control Laboratory, Hill Side Road, Pusa, I.A.R.l., New Delhi - 110005 Document 11 C. No. 35-CUS/CRCL/2016/CL-65-DRI/27-06-2016 Date: 29 -08-2016 B/E No. 5854056 Dated 28-01-2012 Report: The sample Is In the form of blackish grey powder. It Is composed of Lead Oxide, Lead Sulphate together with very small amount of metallic lead In fine particle form as well as Antimony, Tin, Arsenic etc. In traces. Results of tests advised In Test Memo are as below. 5. N. Tests Advised In Test Memo Test Results/reply of query 1. (a) Percentage of Lead content 66.98 % . (b) In which compound form lead is' present In the form of Lead Oxide and Lead Sulphate with small amount of metallic lead in fine particle form (c) Percentage of different lead bearing compounds Lead Oxide= 31.33 % Lead Sulphate= 52.37 % 2. Percentage of other contents viz. Zinc, Silver, Copper, Cadmium, Bismuth, Arsenic, Iron, Sulphur ect. Zinc, (Not detec....
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....ccurring Lead Ore or otherwise. (I) Anglesite (lead sulphate), (4) Cerussite (lead carbonate). (ii) Gatona (Lead sulphide) (Iv) Pyromorphite [Phosphate and Chloride of lead) S. Whether it is 'Lead ash / lead residue / lead scrap' of spont lead acid batteries (I.e. derived from re cycling of Lead batteries), 6 .. If it Is neither obtained from natural Lead Ore and nor from Spent Battery then specific Identity / description of the goods may be ascertained. Ann DHA IC (Dr. S. J. Singh) Deputy Director, DRI, Gandhidham To. The Director Central Revenues Control Laboratory, Hill Side Road, Pusa, I.A.R.I., New Delhi - 110005 The test report received from the CRCL New Delhi was as follows: 14 8 à¤à¤¾à¤°à¤¤ सरकार 7/10 MuneshSingh विज अनà¥à¤¯à¤®à¤—, राजसà¥à¤µ विà¤à¤¾à¤— मेनसà¥à¤Ÿà¥à¤°à¥€à¤® उतà¥à¤ªà¤¾à¤¦ शà¥à¤°à¥à¤¨à¥à¤¤ à¤à¤µà¤‚ सीमा शà¥à¤²à¥à¤• बोरà¥à¤¡ केà....