2015 (1) TMI 793 - AT - Customs

Classification of Imported Coal as 'Bituminous Coal' Upheld with Duty Demand and Penalty Imposition

MILLENNIUM STEEL INDIA PVT LTD. Versus COMMISSIONER OF CUSTOMS CENTRAL EXCISE & SERVICE TAX, MUMBAI

The Tribunal classified imported coal as 'bituminous coal' under CTH 2701 1200, upholding a differential duty demand, interest liability, and penalty ... Waiver of pre deposit - Classification of coal as bituminous coal - denial of the benefit of Notification No. 12/2012-Cus. Dated 17/03/2012 - Held that:- As per the explanatory Note 2 to Chapter 27, 'bituminous coal' means coal having a volatile matter limit (on a dry, mineral-matter-free basis) exceeding 14% and a calorific value limit (on a moist, mineral-matter-free basis) equal to or greater than 5833 kcal/kg. Any coal satisfying the above definition would merit classification as 'bituminous coal' under CTH 2701 12 notwithstanding the fact that the goods may be known otherwise in the commercial/trade parlance. As held by the hon'ble apex Court in the case of Indo International Industries vs. Commissioner of Sales Tax, Uttar Pradesh [1981 (3) TMI 77 - SUPREME COURT OF INDIA] 'if any term or expression has been defined in the enactment, then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted.' In the present case, since the Customs Tariff defines 'bituminous coal' by means of certain specifications and if those specifications are satisfied, the goods will have to be classified as 'bituminous coal' only and not otherwise. - appellant has not made out any case for waiver of the entire amount of dues adjudged. The appellant has not pleaded any financial hardship nor any evidence has been placed before - entire duty to be deposited - interest and penalty waived - Partial stay granted. Issues:Classification of imported coal as 'bituminous coal' under CTH 2701 1200, benefit of Notification No. 12/2012-Cus., differential duty demand, interest liability, penalty imposition, provisional release of goods, redemption fine, prima facie view on classification.Classification of Imported Coal:The appellant imported coal declared as 'steam coal' but was classified by the adjudicating authority as 'bituminous coal' under CTH 2701 1200. The authority confirmed a differential duty demand, interest liability, and imposed a penalty, along with provisional release of goods with a redemption fine. The appellant argued based on trade nomenclature, technical literature, and functional utility, claiming the product should be classified as 'steam coal.' The Revenue contended that statutory definitions prevail, citing a recent Tribunal decision and statutory specifications defining 'bituminous coal.'Prima Facie View on Classification:The Tribunal, considering the specifications in the Customs Tariff, held that coal meeting the criteria for 'bituminous coal' must be classified as such, regardless of commercial parlance. They referred to a previous case and emphasized the importance of statutory definitions. The Tribunal noted the absence of a prima facie case for waiver and financial hardship from the appellant, leading to a decision in favor of the Revenue. The appellant was directed to make a pre-deposit of the entire duty demand within a specified period, with further proceedings contingent on compliance.This judgment highlights the significance of statutory definitions in classifying goods for customs duty purposes, emphasizing adherence to defined specifications over trade nomenclature. The Tribunal's decision underscores the need for a prima facie case and evidence of financial hardship for waivers, with the balance of convenience considered in favor of the Revenue when such elements are lacking. The appellant's obligations regarding pre-deposit and compliance timelines were clearly outlined, reflecting the procedural aspect of adjudicating duty demands in customs cases.