Coal classification under Chapter 27 requires applying the correct calorific value test and related duty concession notification.

Imported coal under Chapter 27 must be classified by applying the prescribed tests for volatile matter on an air-dry basis and gross calorific value on a moist, mineral matter free basis. Applying the accepted conversion formula, the consignments appeared to fit the description of bituminous coal, so the corresponding concessional duty notification for Indonesian-origin coal had to be applied in assessment. The duty computation was therefore required to be redetermined, and the assessment could not ignore the applicable notification merely because no separate exemption claim had been filed.

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Issues: Whether the imported coal was to be classified on the correct basis of gross calorific value under Chapter 27 of the Customs Tariff Act, 1975, and whether the duty demand had to be re-determined by extending the benefit of Notification No. 46/2011-Cus dated 01/06/2011.

Analysis: The prescribed test under Chapter 27 requires volatile matter to be computed on air-dry basis, while gross calorific value has to be computed on moist, mineral matter free basis. On application of the accepted conversion formula, the consignments appeared to satisfy the description of bituminous coal. However, since the goods were of Indonesian origin and Notification No. 46/2011-Cus granted a concessional rate of duty to bituminous coal, the adjudicating authority erred in ignoring that notification while finalising the assessment, even though no separate exemption claim had been made.

Conclusion: The duty computation was vitiated by non-extension of the applicable notification benefit and the matter required fresh adjudication.

Ratio Decidendi: Where the materials on record indicate that the imported goods fall within the notified tariff description, the adjudicating authority must apply the corresponding concessional notification in computing duty, even if the assessee has not separately claimed it.

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