Case: Mittal Pigments Pvt Ltd v. Commissioner of Customs, Mundra, with connected appeals Forum: Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad Order: Final Order No. 10545-10567/2026, dated 21 August 2026 Coram: Somesh Arora (Member, Judicial) and A.K. Jyotishi (Member, Technical) Headings in contest: 26.07 (lead ores and concentrates) versus 78.02 (lead waste and scrap) Result: Importer’s classification under 26.07 undisturbed; Revenue’s appeals dismissed
Why this judgment matters
Most classification disputes turn on what the goods are. This one turned on what could be proved about what the goods are. The Tribunal was presented with nine laboratory reports from three government laboratories, a stack of foreign export documents, pre-shipment inspection certificates, a Central Pollution Control Board letter, technical encyclopaedias and a director’s statement, and it concluded that none of it added up to a coherent, scientifically established identity for the product. On that footing, the burden-of-proof rules of self-assessment did the rest.
For the classifier, the judgment is instructive on three levels. First, it draws a clear boundary around Section XV Note 8(a), the definition of “waste and scrap” of base metals, and confirms that an oxidic or sulphatic powder is outside it regardless of provenance. Second, it restates the evidentiary discipline that governs reclassification under self-assessment: the administration proposing a change must prove it, and conflicting expert opinion is not proof. Third, and by omission, it illustrates how a dispute framed as a binary between two headings can leave the heading that actually fits the goods unexamined.
Procedural background
The matter reached the Tribunal for the second time. A differently constituted Bench had decided in favour of the importers on 25 April 2018, in an order whose reasoning was confined to its final paragraph. The department appealed to the Supreme Court, which set the order aside in Commissioner of Customs, Mundra v. Mittal Pigments Pvt Ltd (2022 (380) ELT 243 (SC)) on the ground that the Tribunal had not dealt with the rival submissions and had disposed of the appeal before the period for filing cross-objections had expired. The appeal was restored for fresh disposal with all rights and contentions kept open.
The lead appeal was heard together with connected appeals and cross-appeals involving Jammu Pigments, R.G. Pigments, Mittal Chemicals, Hi Rel Metals, Chem Color India, Pioneer Ceramics, Success Exim, a common director and several high-seas sellers. All arose from the same Directorate of Revenue Intelligence investigation at Gandhidham that had earlier produced the Tribunal’s decision in Gravita India Ltd v. Commissioner of Customs, Mundra (2024 (390) ELT 394 (Tri.-Ahmd.)).
The goods and the commercial setting
The importers were secondary lead producers operating rotary furnaces at Kota, Rajasthan, and registered with the CPCB under the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 as recyclers of lead scrap. Between 2011 and 2014 they imported consignments declared as “lead concentrate” under heading 2607 from suppliers in the United Arab Emirates, several of which were scrap-metal dealers operating battery-breaking plants, and claimed the 2.5 per cent concessional rate of basic customs duty available under Sr. No. 117 of Notification No. 12/2012-Cus for goods of headings 2601 to 2617.
On examination at Mundra the goods were found to be a greyish-black powder with soft, friable lumps. The department’s theory, developed by the DRI, was that the material was washed and dried electrode paste recovered from broken lead-acid batteries: lead waste and scrap of heading 7802, and in powdered form a restricted item under the Foreign Trade Policy requiring prior authorisation.
The practical stakes were substantial. The declared heading attracted 2.5 per cent duty; the department’s heading attracted 5 per cent, disqualified the goods from the exemption, exposed them to confiscation under section 111 of the Customs Act and exposed the importers, their director and the high-seas sellers to penalties under section 112(a).
The competing headings
1. Heading 26.07 — lead ores and concentrates
Heading 26.07 has no subheadings at the six-digit level; the international code is 2607.00. Chapter 26 Note 2 defines “ores” for headings 26.01 to 26.17 as minerals of mineralogical species actually used in the metallurgical industry for the extraction of the metals of Section XIV or XV, and excludes minerals that have been submitted to processes not normal to the metallurgical industry. The General Explanatory Note to Chapter 26 adds that the term “ores” applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from the mine, and that “concentrates” are ores from which part or all of the foreign matter has been removed by special treatment, whether to assist subsequent metallurgical operations or for economical transport.
The Explanatory Note to heading 26.07 lists the principal lead ores as anglesite (lead sulphate), cerussite (lead carbonate), galena (lead sulphide, often silver-bearing) and pyromorphite. This list is the source of the importers’ most effective chemical argument: lead sulphate is a naturally occurring lead ore mineral, so its presence proves nothing about battery origin.
2. Heading 78.02 — lead waste and scrap
Heading 78.02 is likewise a single six-digit code, 7802.00. Its scope is governed by Section XV Note 8(a), which defines waste and scrap as metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons. Two things must therefore be true for goods to fall in 78.02: they must be metal, and they must be either the residue of working metal or spent metal articles.
The evidence
1. Laboratory reports
The department drew samples at the port, from the importers’ factory and from remnant samples of earlier consignments. The reports, in the order the Tribunal considered them, were as follows.
| No. | Laboratory and report | Composition | Conclusion |
| 1 | Customs Laboratory, Kandla, Nos. 500 and 501, 11 December 2014 | Lead 65.7 to 65.8 per cent; mainly lead sulphate with minor carbonaceous and siliceous matter and iron | Characteristics of lead concentrate |
| 2 | Customs Laboratory, Nhava Sheva, 6 January 2015 | None stated | Other than lead concentrate; characteristics of used lead battery scrap |
| 3 | CRCL New Delhi, CLR-22 and CLR-23, 15 October 2015 | Lead 65.6 and 68.66 per cent; lead oxide 27 to 28.5 per cent; lead sulphate 58.4 to 64.8 per cent; zinc, copper, iron, antimony, arsenic detected; silver not detected | Characteristics of washed and dried electrode paste derived from lead-acid battery |
| 4 | CRCL New Delhi, CL-410 and CL-411, 16 October 2015 | Metallic and plastic fragments only | Resemblance with lead-acid battery parts |
| 5 | CRCL New Delhi, CLD-477 and CLD-478, 22 January 2016 | Greyish fine powder; lead oxide and lead sulphate with very small amounts of metallic lead, zinc, silver, copper, cadmium, arsenic, antimony, iron and sulphur | Descriptive; no classification opinion |
| 6 | CRCL New Delhi, clarificatory letter, 9 May 2016, on the DRI’s request | None | No characteristics of lead concentrate; characteristics of washed and dried electrode paste |
| 7 | Customs Laboratory, JNCH Nhava Sheva, factory sample, 28 April 2015 | None stated | Composition of lead concentrate; DRI’s two letters seeking clarification went unanswered |
| 8 | CRCL New Delhi, CLR-27, retest of the factory sample | Lead 50.2 per cent; zinc 13.7 per cent; iron 4.3 per cent; 4.2 per cent metallic zinc; silver 0.04 per cent | Neither lead concentrate nor battery-derived; off-specification industrial product |
| 9 | Same as No. 4 | — | — |
The importers characterised this record as four reports in their favour, three against, and two inconclusive. The Tribunal accepted the tally and, more importantly, accepted the characterisation of the record as a whole as inconclusive.
2. Documentary and circumstantial evidence
The department’s case rested heavily on material other than chemistry:
- Load-port export declarations describing the goods as lead scrap under HS 7802, with one Dubai declaration reading “lead scrap/concentrate”;
- Country-of-origin certificates from the Dubai Chamber describing the goods as lead waste and scrap;
- Pre-shipment inspection certificates certifying the goods as metallic scrap, while describing them as lead concentrate under the heading “description of metallic scrap”;
- Form 9 transboundary-movement documents under the Hazardous Waste Rules, identifying the supplier as waste generator and the recovery method as R4 (recycling of metals);
- An inspection report on a supplier’s UAE plant describing collection of lead-bearing dust from battery breaking;
- The CPCB letter of 21 August 2015 confirming that the importers were secondary metallurgical units not permitted to process lead concentrate;
- The absence of any silver production in five years of excise returns, contrasted with Hindustan Zinc’s recovery of silver as a by-product of primary lead smelting;
- The director’s statement, on being shown the load-port documents, agreeing that the goods were battery waste;
- Extracts from Britannica, Wikipedia, Kirk-Othmer and the Indian Bureau of Mines survey distinguishing primary smelting in blast furnaces from secondary recovery in rotary furnaces.
3. The importers’ rebuttal
The importers met each item. The Kirk-Othmer composition ranges for lead concentrate (lead 45 to 75 per cent, zinc 0 to 15 per cent, iron 1 to 8 per cent, silver 0 to 0.15 per cent) accommodated every reported assay, including the factory retest that the department had commissioned to discredit the JNCH report. Silver had in fact been detected at 0.04 per cent in that retest. The PSICs were the supplier’s routine, billed to and paid by the supplier, and a visual inspection of a grey powder cannot distinguish 2607 from 7802. Foreign HS declarations are made for foreign purposes and do not bind Indian customs. A certificate from a former Hindustan Zinc engineer and a US patent disclosure showed that rotary furnaces can process concentrate at small scale. And, decisively, the PSIC evidence and the CRCL evidence could not both be right: the certificates described metallic scrap, while the CRCL reports recorded only small or very small amounts of metallic lead in a mass that was 87 to 92 per cent lead oxide and lead sulphate.
The Tribunal’s reasoning
1. Labels are not evidence of nature
The Bench began by discarding the descriptive evidence. Relying on Jenson Enterprises v. Collector of Customs, Cochin (1987 (28) ELT 346 (Mad.)), it held that where reports conflict, findings based on scientific investigation are to be preferred to opinions without a stated basis, and that the varied descriptions used in commercial and regulatory documents help neither side. The identity of a product of scientific nature must be established by scientific tests.
This is orthodox classification doctrine, but its application here is notable for how much of the department’s case it removed at a stroke. The importer’s licences, the type of furnace in its factory, its registration status with the pollution regulator, the identity of its suppliers, the HS code on a Dubai export declaration and the boilerplate on an inspection certificate all describe circumstances surrounding the goods. None describes the goods.
2. Conflicting government laboratory reports cannot found a reclassification
Having isolated the laboratory evidence, the Bench found it internally contradictory at every level. The two port laboratories disagreed. CRCL’s own reports on the same investigation reached different conclusions: one set found battery paste, another found an off-specification industrial product that was neither concentrate nor battery-derived, and a third was purely descriptive until a clarificatory letter, obtained at the DRI’s request, attached a label to it. The Bench treated the entire body of reports as inconclusive, while observing that the majority leaned towards the importer.
The consequence followed from Commissioner of Customs, Mundra v. Sunrise Traders (2022 (382) ELT 23 (SC)), where the Supreme Court held that an inconclusive chemical examiner’s opinion cannot be used to disturb a declared classification, and from Tarini Minerals Pvt Ltd v. Deputy Commissioner (2022) 1 Centax 200 (Orissa), on the resolution of conflicting CRCL reports according to the statute rather than the reports.
3. Burden of proof under self-assessment
The imports took place in 2014-15 under the amended section 17 of the Customs Act, which places assessment in the hands of the importer. Citing Hewlett Packard India Sales Pvt Ltd v. Commissioner of Customs (Import), Nhava Sheva (2023 (383) ELT 241 (SC)) and Commissioner of Customs, Mumbai v. Dilip Kumar and Co (2018 (361) ELT 577 (SC)), the Bench held that where the customs authorities seek to classify goods differently from the importer, the burden of proving the alternative classification lies on them, and that on failure to discharge it the self-assessed classification must be accepted. Union of India v. Garware Nylons Ltd (1996 (87) ELT 12 (SC)) was cited for the corresponding burden on Revenue to prove liability to confiscation.
4. The undefined term “concentrate”
Neither the Customs Tariff nor Chapter 26 defines “concentrate”. The Bench applied the common-parlance rule from 2012 (286) ELT 321 (SC) and held that to classify a product under Chapter 26 it is not necessary that the lead be in its primary metallic form; the Chapter, which covers ores, slag and ash, contemplates lead in other forms. It contrasted heading 2607, “lead ores and concentrates”, with heading 7802, “lead waste and scrap”, and noted that the Indian tariff subdivisions of 7802 describe categories of physical lead scrap by ISRI code: racks, radio, relay, ropes, roses.
5. The silver argument
The department had argued that genuine lead concentrate contains recoverable silver, and that the absence of any silver production from the importers’ furnaces proved the feedstock was not concentrate. The Bench rejected this on two grounds. The only silver threshold anywhere in Chapter 78 is the 0.02 per cent limiting content prescribed for “refined lead” in the Subheading Note, which is a ceiling, not a compulsory presence. And the department’s own factory retest had detected silver at 0.04 per cent, within the Kirk-Othmer range that begins at zero.
6. Technical literature and the Explanatory Notes
The Bench held that encyclopaedic and survey literature can assist only once the identity of the product has been established, which it had not been. It then expressly preferred the Harmonized System Nomenclature and its Explanatory Notes as the most potent interpretative tool, superior to any technical literature that may or may not align with the statutory Section and Chapter Notes, and adopted the reasoning of Gravita India as part of its own order.
7. The Gravita reasoning adopted
Paragraphs 35 to 37 of Gravita India, incorporated into the present order, proceed as follows. Every laboratory that gave a composition found the lead present as lead oxide (18 to 35 per cent) and lead sulphate (52 to 65 per cent), with metallic lead present only in traces. Lead oxides are specifically named in heading 28.24. Sulphates of metals fall in heading 28.33. Only lead in metallic or primary form falls in Chapter 78. If the goods are not lead concentrate, they are at best classifiable in Chapter 28; the department’s claim to 7802 has no merit on any view of the evidence, and the order classifying the goods under Chapter 78 cannot be sustained.
The Bench in Mittal Pigments added the Section XV Note 8(a) analysis developed by the importers: the material is not metal, is not waste from the manufacture or mechanical working of metal, and is not a metal article rendered unusable by breakage or wear. It therefore fails every limb of the definition that governs heading 7802.
Classification principles confirmed
Classify the goods as presented, by their physical and chemical character. The identity of the importer, the licences it holds, the equipment it operates and the by-products it does or does not recover are irrelevant to the heading. This is the principle of Dunlop India (1983 (13) ELT 1566 (SC)), which the department itself cited, and it cut against the department.
Foreign declarations and inspection certificates do not bind the importing administration. An HS code declared at the load port is a declaration for the exporting country’s purposes in the exporting country’s nomenclature. It may be evidence of what the exporter believed, but it is not evidence of what the goods are.
Section XV Note 8(a) is a gate, not a default. Heading 7802 does not capture everything that comes out of a battery-breaking plant. It captures metal waste and spent metal articles. Compounds of lead are not metal, and the metallic grids and lugs are a different product from the paste.
A heading cannot be sustained by disproving the rival heading. The department devoted its resources to showing that the goods were not concentrate. Even had it succeeded, that would not have placed the goods in 7802. The question is always which heading the goods fall in, not which heading they fall out of.
Post-hoc clarificatory opinions carry diminished weight. A laboratory report that describes composition without drawing a conclusion, followed months later by a letter drawing the conclusion the investigating agency asked for, was treated as what it was.
The heading nobody pleaded
The judgment is sound on burden of proof and correct in rejecting 7802. It is less satisfying as an account of where the goods belong, because the framing of the dispute as a binary between 2607 and 7802 left the heading that best fits the department’s own theory of the goods unexamined.
The WCO Explanatory Note to heading 26.20, “Slag, ash and residues (other than from the manufacture of iron or steel) containing metals, arsenic, or their compounds”, states that the heading covers residues containing metals or their compounds that are of a kind used in industry for the extraction of metals or as a basis for the manufacture of their chemical compounds, and that result from the treatment of ores or intermediate metallurgical products or from electrolytic, chemical or other processes not involving the mechanical working of metal. It expressly distinguishes such residues from scrap consisting of worn-out or broken metal articles, which goes to Section XV or XVI. Its illustrative list includes, at item (4), “accumulator sludge”. Chapter 26 Note 3(a) confirms that the heading applies to residues of a kind used for the extraction of metals.
Washed and dried electrode paste from lead-acid batteries, containing 65 to 68 per cent lead as sulphate and oxide, traded by weight to secondary smelters for the recovery of lead, matches that description precisely. If the goods were what CRCL said they were, the WCO instruments place them in subheading 2620.29, “containing mainly lead: other”, on GRI 1 alone. Heading 26.20 falls outside the 2601 to 2617 range covered by Sr. No. 117 of the exemption notification, so the fiscal consequence for the importers would have been similar to the department’s case, but the legal route would have been defensible.
The Gravita fallback to Chapter 28 is, by contrast, weak under the WCO text. Chapter 28 Note 1 confines the Chapter to separate chemical elements and separate chemically defined compounds, with enumerated exceptions. A mixture of lead oxide, lead sulphate, zinc, copper, antimony, arsenic and iron is not a separate chemically defined compound, and the Explanatory Note to heading 26.20 lists chemically defined compounds of Chapter 28 as an exclusion in the opposite direction. The Chapter 28 argument served its forensic purpose of showing that 7802 was wrong, but it should not be read as a positive finding that battery paste belongs in 28.24 or 28.33.
Two further WCO points bear on the record. The Explanatory Note to heading 28.33 excludes natural lead sulphate (anglesite) to heading 26.07, which is the textual anchor for the importers’ argument that the presence of lead sulphate cannot by itself indicate battery origin. And the metallic and plastic fragments separately tested by CRCL, if they were what CRCL said they were, fall in HS 2022 subheading 8549.11, “waste and scrap of lead-acid accumulators; spent lead-acid accumulators”, not in heading 78.02. Under HS 2022 the Nomenclature has three distinct destinations for the three fractions of a broken battery: the paste to 26.20, the grids and lugs to 78.02 as metal scrap, and the unsorted battery scrap or spent batteries to 85.49.
The deciding fact
Stripped of the evidentiary contest, the classification question reduces to provenance. Chapter 26 Note 2 and the General Explanatory Note require that goods of headings 26.01 to 26.17 be minerals of mineralogical species extracted from the mine and prepared by processes normal to the metallurgical industry. Beneficiated anglesite, galena or cerussite is 2607.00. A residue of a battery-recycling process, whatever its assay, cannot be an ore or a concentrate of an ore because it was never extracted from a mine; it is a residue of heading 26.20, code 2620.29.
That distinction was available to the department from the text of the Chapter it was arguing against. It was never pleaded. The department instead built its case on the proposition that the goods were metal scrap, a proposition its own laboratory reports contradicted, and lost.
Practical lessons
For importers, the judgment confirms that a self-assessed classification supported by contemporaneous test reports will not be displaced by circumstantial evidence about the importer’s business, and that internal inconsistency in the department’s laboratory evidence will be resolved in the importer’s favour.
For the administration, the lesson is the opposite face of the same rule. Reclassification under self-assessment requires a positive, scientifically supported identification of the goods and a heading whose terms and Notes that identification satisfies. Attacking the declared heading is not enough, and selecting a heading whose defining Note the goods cannot meet is fatal however strong the surrounding evidence of misdescription.
For classifiers generally, the case is a reminder to read the whole Chapter. Chapter 26 is not only ores and concentrates. Its second half, headings 26.18 to 26.21, exists precisely for metal-bearing material that is not ore and not metal. The Explanatory Notes name accumulator sludge in that half. A dispute that ran for more than a decade, through two Tribunal hearings and the Supreme Court, might have been shorter had either side turned the page.
Caveats
- The HS is harmonised to six digits. The codes 2607 00 00 and 7802 00 90 argued in the case are Indian Customs Tariff subdivisions, and the Foreign Trade Policy restriction on powdered lead scrap attaches to the national subdivision, not to the WCO heading.
- The observations in sections 8 and 9 on heading 26.20 are an analysis under the WCO instruments; they were not argued before and are not findings of the Tribunal. The binding result in India is that the importers’ classification under 2607 stands.
- The exemption under Sr. No. 117 of Notification No. 12/2012-Cus is a matter of national tariff law outside the WCO instruments.
- Citations of Indian case law are reproduced as they appear in the order; they have not been independently verified against the reports.