Imported coal classification dispute turns on calorific value testing, with pre-deposit waived and Larger Bench reference ordered.

Classification of imported steam coal turned on whether the goods fell within the exempt steam coal entry or were classifiable as bituminous coal under the calorific value threshold in Chapter 27. The Revenue relied on load port and survey reports, while the applicants invoked ASTM methodology and argued that inherent moisture and a chemical test were necessary for accurate classification. The note records a prima facie preference for the Chennai Bench view that classification should not rest solely on the load port report. On that basis, waiver of pre-deposit of duty, interest and penalty was granted pending the appeals, and the matter was referred for constitution of a Larger Bench.

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Issues: Whether the applicants were entitled to waiver of pre-deposit in view of the dispute on classification of imported coal and the competing reliance on load port reports, ASTM methodology, and prior coordinate bench decisions.

Analysis: The dispute concerned whether imported steam coal fell under the tariff entry for steam coal carrying exemption or under the entry for bituminous coal based on the calorific value threshold in Sub-heading Note 2 of Chapter 27 of the Customs Tariff, 1975. The load port and survey reports relied upon by the Revenue were treated as based on air-dried or residual moisture, while the applicants relied on ASTM standards to contend that inherent moisture and a chemical test were necessary for proper classification. The order noted a conflict between coordinate bench decisions and recorded a prima facie view favouring the Chennai Bench view that a chemical test was required rather than relying solely on the load port report.

Conclusion: The applicants were granted waiver of pre-deposit of duty, interest, and penalty pending disposal of the appeals and the matter was directed to be placed before the Hon'ble President for constitution of a Larger Bench.

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