CCE Vs. METAL POWDER CO. LTD.

JUDGEMENT

(1.) These appeals arise from Order -in -Appeal Nos. 26 and 27/(MDU) 98 dated 27.1.98 passed by the Commissioner (Appeals), Trichy. The issue before the Commissioner (Appeals) was with regard to classification of various grades of zinc dust which the assessee claimed classification under Chapter sub -heading 7903.10 as zinc dust alongwith benefit of Notification No. 184/88 dated 13.5.88. They contended that the zinc dust was manufactured out of zinc ingots received from M/s. Hindustan Zinc Ltd., Vizag under Chapter X procedure. However, the AC felt that the item claimed as zinc dust would not be classified as such and proceeded on the basis that the item is required to be considered as Zinc powder for classification in the residuary heading 7903.90 of the tariff. The contention of the assessee was that the process mentioned in the chapter note (c) of Chapter 79 is conventional, expensive, time consuming old method condensation process, whereas they has obtained zinc dust through atomization process developed by adopting advances science and technology and in view of Apex Court judgment in the case of Indian Aluminium Cables Ltd., 1985 (6) ECC 126 (SC): 1985 (21) ELT 3 (SC), the latest technology applied should be taken for clarification and the benefit should be extended to them. The Notification No. 184/88 -CE dated 13.5.88 as amended by Notification No. 63/91 dated 25.7.91 granted benefit of zinc dust falling under 7903.10, if manufactured out of zinc ingots and used in the manufacture of zinc unwrought, and if such use is elsewhere than in the factory of production of such zinc dust, the procedure set out in Chapter X of the said rules should be followed. It was contended before the Commissioner that the zinc dust is of finer quality satisfying the condition and also tariff note which laid down the requirement of zinc to pass through the sieve with 63 micrometers (microns) mesh to the extent of 80%, while in their case the test results showed that it was between 53 to 75 microns and 90 to 93% by weight of the particle could pass through in sieve analysis and it continued to be zinc dust and not zinc powder in terms of test. They also relied on the judgment in the case of CC and CCE. v. Lekhraj Jessumal and Sons, 1996 (54) ECC 85 (SC): 1996 (82) ELT 162 (SC) which laid down that while deciding the issue relating to tariff chapter new process and new method changed from time to time should be taken into account. The Commissioner taking into consideration these judgments and assessee's contentions upheld the classification of the product as zinc dust under chapter heading 7903.10 which is in challenge by the Revenue in this appeal.

(2.) We have heard Ld. DR Shri A. Jayachandran for the appellant revenue and Shri A. Narayanswamy, Ld. Advocate for the respondent.

(3.) Ld. DR relied on the ground raised in the memorandum of appeal. It is contended that the zinc dust, as per sub -heading note 1 (c) to Chapter 79, is obtained by condensation of zinc vapour, consisting of spherical particles which are finer than zinc powder. At least 80% of weight of the particles pass through a sieve with 63 micrometres (microns) mesh. It must contain at least 85% by weight of metallic zinc. This tariff definition given credence to the process of manufacture is based on HSN and therefore, the assesse's case should be reconsidered and should be classified only as zinc powder under the residuary heading. On a specific query from the Bench, as to whether the department has taken samples for test and whether they are relying on any test report. Ld. DR contended that there is no test report on record. However, he referred to the ground of appeal and the contentions raised by the assessee in their reply wherein they had relied on their test results by which they have contended that more than 80% of zinc dust passed through the sieve test.