SIYARCO INDUSTRIES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) IN these two appeals, arising out of a common Order -in -Appeal Nos. 48 -49/2004, dated 27 -1 -2004, the issues involved relate to the nature, valuation and quantity of the goods imported by M/s. Siyarco Industries.

(2.) SHRI Srinivas Kotni, learned Advocate, mentioned that the Appellants, engaged in the activity of refining Zinc Ore Concentrate, imported a consignment of Zinc Ore Concentrate from M/s. Shaan Scrap Trading Co. Ltd., Sharjah; that the description, quantity and value declared in the bill of entry was according to the import documents, namely, contract with the foreign supplier, invoice, packing list, bill of lading, etc.; that the Department drew representative samples of the impugned goods which were assessed provisionally pending the test report; that after receipt of the Test Report and subsequent investigation, a show cause notice dated 12 -7 -1999 was issued to them alleging that the goods imported is Zinc Residue and not Zinc Ore Concentrate, the net weight of goods was 37,932 kgs. instead of declared net weight 34,430; the value was Rs. 7,97,1607 - and differential duty of Rs. 1,35,584/ - was demanded and confiscation of the impugned goods was also proposed besides imposing penalty and demanding interest under the provisions of the Customs Act; that the Additional Commissioner, under Order -in -Original No. 2/1999 dated 3 -12 -1999 confirmed the demand of differential duty besides imposing penalty on both the Appellants; that the Commissioner (Appeals), under the impugned Order, has dismissed their appeal holding that the goods imported are not Zinc Ore Concentrate but Zinc Residue and as such they had misdeclared the goods; that the value has been determined under Rule 8 of the Customs Valuation Rules on the basis of percentage of Zinc content and London Metal Exchange Journal Price and that there was an excess quantity of 502 kgs. The learned Advocate submitted that what is imported by the Appellants, is Zinc Ore Concentrate and not Zinc Residue; that the report of the Chemical Examiner is vague and not categorical; that there is no clear confirmation any where in the report that the impugned goods are Zinc Residue; that the Criminal prosecution launched against the Appellants by the Department has been dropped; that the Order has assailed the chemical examination report; that it is apparent from the Explanatory Notes of H.S.N. that Zinc Ore Concentrate will not contain 100% metal content and the same can be lesser due to the presence of foreign matter; that thus the presence of lumps, coarse powder, Zinc oxide, iron oxide, free metallic zinc in the Zinc Ore Concentrate is expected; that mere presence of these items in the Zinc Ore Concentrate will not make it residue since according to the Test Report, it contains 58.6% by weight of metallic zinc and 83% by weight of total Zinc. He has referred to the letter dated 20 -2 -2001 of Shri Sushil Bhandari, Dean, Faculty of Engineering & Head of Department of Mining, MBM, Engineering College, Jodhpur, wherein it is mentioned that Zinc Concentrate usually contains 45 to 60% Zinc and Zinc metal content in the residue is usually less than 1%. He, therefore, contended that there is no misdeclaration by the Appellants as regards the description of the imported goods being Zinc Ore Concentrate and accordingly no violation of Export Import Policy has been committed by them. He, further, submitted that impugned goods, assuming

(3.) COUNTERING the arguments, Shri S.M. Tata., learned S.D.R., submitted that the Chemical Examiner's Test Report clearly mentions that it is a sample of "other than Ore Concentrate" and "it has the characteristics of Zinc Residue"; that the Test Report is quite specific and clear and as such the impugned goods are to be classified as per the test result; that in the past also the Appellants had imported the impugned goods declaring them as "Zinc Ore Concentrate" which on examination were found to be Zinc Residue. He referred to the decision in their own case as reported in 2000 (122) E.L.T. 248 (T) (Siyarco Industries v. C.C.E., Jaipur) wherein the Tribunal has observed that "Appellant herein had earlier imported one consignment of similar goods and cleared the same describing it as "Zinc Ore Concentrate" and "even though the first prayer in the memorandum of appeal was to interfere with the finding that the goods sought to be imported is Zinc Ore Concentrate, this prayer has not been pressed." He also emphasised that the Appellants had not challenged the Test Report by requesting for retest or by producing any other Test Report; that the certificate of Shri Bhandari and reliance on Technical Book are of general nature which cannot be relied upon against a clear Test Report. He, further, submitted that the Rajasthan State Pollution Control Board has reported that Zinc Residue falls under the category of hazardous waste and the Tribunal in their own case has upheld the confiscation as the impugned goods were prohibited ones, not to be imported without a licence. He finally submitted that once the description of the goods has been misdeclared, the transaction value has to be rejected and in the absence of any contemporaneous imports, the assessable value has been rightly determined on the basis of LME price. He relied upon the decision in the case of C.C., Mumbai v. Elpro International Ltd., 2001 (127) E.L.T. 157 (T).