C/11001/2021 — RAJDEV INTER TRADE PRIVATE LIMITED vs MUNDRA

Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench at Ahmedabad

REGIONAL BENCH-COURT NO. 3

CUSTOMS Appeal No. 11001 of 2021 - DB (Arising out of OIA-MUN-CUSTM-000-APP-151-21-22 dated 15/09/2021 passed by Commissioner of CUSTOMS-MUNDRA) RAJDEV INTER TRADE PRIVATE LIMITED ……..Appellant W-9 Industries Area Yamunangar Yamunanagar, Haryana VERSUS

C.C.-MUNDRA ……Respondent Office of the Principal Commissionerate of Customs,
Port User Buld. Custom House Mundra, Mundra Kutch, Gujarat- 370421 WITH

CUSTOMS Appeal No. 11002 of 2021 - DB (Arising out of OIA-MUN-CUSTM-000-APP-149-150-21-22 dated 15/09/2021 passed by Commissioner of CUSTOMS-MUNDRA) UPPER INDIA SMELTING
AND REFINERY WORKS ……..Appellant 11-E Industrial Area Yamunagar Yamunanagar Haryana
VERSUS

C.C.-MUNDRA ……Respondent Office of the Principal Commissionerate of Customs,
Port User Buld. Custom House Mundra, Mundra Kutch, Gujarat- 370421 AND

CUSTOMS Appeal No. 11003 of 2021 - DB (Arising out of OIA-MUN-CUSTM-000-APP-149-150-21-22 dated 15/09/2021 passed by Commissioner of CUSTOMS-MUNDRA) UPPER INDIA SMELTING
AND REFINERY WORKS ……..Appellant Survey No 241
Vill Chandsana Chhatral
Mehsana Highway Tal Kadi Mehsana Mehsana, Gujarat VERSUS

C.C.-MUNDRA ……Respondent Office of the Principal Commissionerate of Customs,
Port User Buld. Custom House Mundra, Mundra Kutch, Gujarat- 370421

APPEARANCE: Shri Hardik Modh, Advocate for the Appellant Shri A R Kanani, Superintendent (AR) for the Respondent

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CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU

                   Final Order No.10482-10484/2024 
                                                               DATE OF HEARING: 25.10.2023 
                                                                 DATE OF DECISION: 26.02.2024 

RAMESH NAIR
The Appellant M/s Rajdev Intertrade Pvt. Ltd is a private limited company engaged in the manufacture of Zinc Oxide. A product called remelted zinc is used for the said purposes. The Appellant imports the said remelted zinc from Australia. The Appellant has effected the said imports by classifying Remelted zinc under CTH 7901 12 00 of the First Schedule to the Customs Tariff Act, 1975 and paid Basic Customs Duty at the rate of 5%. A show cause notice dated 25.10.2019 was issued to the Appellant alleging that based on the content of zinc in the disputed goods, the goods should be classifiable as “zinc alloys” under CTH 7901 20 90 wherein customs duty leviable is at 7.5% and not under the heading which has been preferred by the Appellant that is as “Zinc not alloyed” under CTH 7901 12 00. The Department has confirmed the demand of differential duty amounting to Rs. 3,74,518 under section 28(1) of the Customs Act, 1962. The Learned Commissioner (Appeals) vide order in appeal No. MUN/CUSTM/000/APP/151 – 21-22 dated 15.09.2021 has upheld the findings of the lower authorities. Hence, the present Appeal.

Shri Hardik Modh, Learned Counsel appearing on behalf of the Appellant has made submissions as regards the test report relied on by the Ld. Commissioner (Appeals). He submits that the Ld. Commissioner (Appeals) has relied on the test reports of the sample drawn through metal gun and classified the disputed goods under CTH 7901 20 90 whereas they should have considered taking samples from the said consignment for testing that the substantive procedure was not followed by the department for which he has relied on the following judgments:-
 Hindustan Ferodo Ltd. v CCE 1997 (89) ELT 16 (SC)  Madhu Wool Spinning mills v UOI 1983 (14) ELT 2200 (Bom)  Arya Abhushan Bhandar v UOI 2002 (143) ELT 25 (SC)  Puma Ayurvedic Herbal Pvt. Ltd v CCE Ex. 2006 (196) ELT 3 (SC)  Nanya Exports v Commissioner of Customs, Chennai 2006 (197) ELT 154 SC

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2.2 Without prejudice to aforesaid he also submits that the levy of penalty under section 117 vide OIO and OIA is beyond the Show Cause Notice when the proposed penalty under the same is under section 114(a) of the Customs Act, 1962.

3. Shri A.R. Kanani, Learned Superintendent (AR) appearing on behalf of Revenue has reiterated findings of the impugned order.

We have carefully considered the submissions made by both the sides and perused the records. We find that the main issue to be decided in the present case is with regards to classification of “remelted zinc” that whether it will be covered under CTH 7901 20 90 as claimed by the Department or under CTH 7901 12 00 as claimed by the Appellant. In order to determine the classification the said chapter headings and note to Chapter 79 is reproduced below:

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Furthermore, we note that the Appellant vide Bill of Entry 3940705 dated 09.11.2017 and 4542175 dated 25.12.2017 have admittedly declared zinc at 95.85 % and 95.75% respectively which clearly does not correspond to the requirement as envisaged under note (b) of Chapter 79. As regards the submissions made by the Appellant in respect of reliance placed by the adjudicating authority on the test reports, we are of the view that in the absence of test reports reliance would have been placed on the description of the goods made by the Appellants which too does not correspond to the requirements of the said chapter. Either way the claims of Appellant find no merit. We observe that there was no foul in the department’s reliance on the test reports in furtherance of ascertaining the classification of the goods in dispute. Therefore, the adjudicating authority was not wrong in re- classifying the disputed goods under CTH 7901 20 90. The classification of the goods by the Department is proper and needs no interference. The judgments cited by the Appellant in support of their claims are based on facts and circumstances entirely different from that in the present case therefore cannot be relied upon.

5. In view of the findings and discussions above, we are of the view that the impugned orders are just and legal which does not require any interference. Accordingly, the impugned orders are upheld. The appeals are dismissed. (Pronounced in the open court on 26.02.2024)

(RAMESH NAIR) MEMBER (JUDICIAL)

(RAJU) MEMBER (TECHNICAL) Raksha