Cut, Curved Molybdenum Sheets Are Finished Articles; CESTAT Delhi Upholds Higher Customs Duty On Siria Impex

Molybdenum sheets that are cut, curved and shaped for use in automobile lighting cease to be “sheets” and become finished articles, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has held.

A bench of Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya delivered the ruling.

The tribunal allowed the department's appeals against Siria Impex Private Limited and restored the demand of differential duty along with the penalty.

The dispute arose from imports of “molybdenum mirrors and shields” declared under a tariff entry attracting 5% duty, while the department reclassified them under a residual entry attracting 10% duty, alleging short payment of Rs. 16.78 lakh.

The department argued that the goods were not flat sheets but curved and shaped products used in automobile lighting systems, and therefore qualified as articles of molybdenum. The importer argued that the goods were derived from molybdenum sheets and retained their essential character and also pointed to past assessments under the same heading.

Rejecting this, the tribunal held that the tariff entry relied upon by the importer applies to specific forms like bars and rods and not to the impugned goods.

“Thus, the molybdenum product classifiable under 81029590 as declared by the importer-respondent has to be in the forms Bars and Rods other than those obtained simply by sintering profiles plates, sheets, strip and foil of 810295.”

The bench emphasised that once the product is transformed for functional use, it loses the character of a sheet.

“Once the sheet is cut, curved and shaped to act as shield/distributor of light beam in lamps, it ceases to be a 'sheet' and becomes an article of molybdenum.”

Relying on the importer's own admission, the tribunal noted that the goods were curved to function as light-distributing components in automobile lamps.

“We observe that the importer, in his statement, has acknowledged that the molybdenum sheets were curved in order to suitably act as shield/distributor of light beam fitted on to low beam filament of halogen in automobile lights. The admission is sufficient to hold that the product was not the flat surfaced product anymore because it was not merely the two sides of molybdenum sheets which got convexed/curved but the sheet as such was got curved to be called as molybdenum mirrors & shields.”

On classification, the tribunal applied the rules of interpretation and held that where competing residual entries exist, the one appearing later must be preferred.

It also dismissed reliance on past inconsistent assessments. Concluding that the goods are not flat sheets but curved, functional products classifiable as “other articles of molybdenum” under tariff entry 81029900, the Tribunal ruled in favour of the department.

“We decide the afore framed issue in favour of the department holding that the molybdenum mirror and shield imported by the respondent-importer are classifiable under 81029900, those not being the flat sheet of molybdenum but the curved and laminated surface merely nomenclature of shield also is in sufficient to take away the character of curved surfaced.”

Accordingly, it set aside the Commissioner (Appeals)' order and restored the original orders confirming duty, interest and penalty.

“The order of Commissioner (Appeals) reversing both order-in-originals is hereby set-aside. The findings of the said order-in-originals are re-affirmed. Consequent thereto, both the appeals filed by the department are hereby allowed.”

For Appellant: Girijesh Kumar, Authorized Representative

For Respondent: B. L. Garg, Advocate