2016 (11) TMI 987 - AT - Customs

Tribunal remands case for fresh examination of dutiability of slop/waste oil, Assessee's appeal allowed, Revenue's appeal rejected

The Tribunal remanded the case to the Commissioner for a fresh examination of the dutiability of slop/waste oil, considering test reports and legal ... Recovery of duty and imposition of penalty - non payment of duty on slop/waste Oil of foreign origin - whether 432.00 MT of slop/waste Oil involving a total duty of ₹ 4,97,597/- is recoverable from the Assessee-appellant and penalty of equal amount under Section 114A is imposable on them? - whether the waste/slop oil and the barge seized are liable for confiscation? - Held that: - the total quantity of oil imported against nine vessels, only the slop/waste oil discharged by the Assessee against three vessels are of foreign origin and accordingly liable to duty. Besides, the evidences which have been referred to by the learned Commissioner, in confirming the duty in arriving at the quantity of slop/waste oil have been disputed by the learned Advocate for the Assessee-appellant, but, the vital issues that has been raised by the learned Advocate is about the dutiability of the product vis-a-vis the test report and the judgment Hon'ble Supreme Court in the case of CCE Patna Vs Tata Iron & Steel Co. Ltd [2004 (2) TMI 68 - SUPREME COURT OF INDIA] referred to by him before the adjudicating authority. We find that the learned Commissioner at Para 36 of the impugned order, after analysing the relevant tariff heading, though observed that waste/ slop oil is classifiable under CTH 2710, however, not recorded/ analysed the implication of the chemical test carried out by the Department in its laboratory on the sample of slop/waste oil collected and the applicability of the said judgment to arrive at the conclusion whether the said slop/waste oil leviable to Customs duty. In these circumstances, we are of the view that it is prudent to remand the matter to the learned Commissioner to examine the said issues afresh, after giving an opportunity of hearing to the Assessee. - appeal allowed by way of remand. Issues:1. Challenge by Revenue on non-direction of confiscation of goods and barge.2. Assessee's appeal against duty recovery and penalty imposition.Analysis:1. The case involved appeals by both the Assessee and the Revenue against the same order. The Revenue contested the order for not directing the confiscation of goods and the barge, while the Assessee appealed against the recovery of duty and imposition of penalty. The dispute arose from an investigation by Customs authorities regarding non-payment of duty on slop/waste oil of foreign origin imported by the Assessee. The Commissioner dropped a substantial amount of duty after finding that a major quantity of the oil was of indigenous origin. However, duty was confirmed on the remaining quantity of foreign-origin oil, along with the imposition of a penalty under the Customs Act, 1962. The Assessee challenged the order on various grounds, questioning the dutiability of the oil and the classification under the customs tariff heading.2. The Assessee's advocate argued that further testing of the oil samples was required, as suggested by the Chemical Examiner of Customs House Laboratory. The advocate also contended that the Adjudicating Authority did not consider certain reports and tests in determining the dutiability of the waste oil. Additionally, discrepancies were raised regarding the quantity of oil of foreign origin, as reported by the Master of the Vessel. The Revenue's representative acknowledged the sample testing but noted that the implications were not discussed in the order. The Tribunal found that the key issue was whether the duty on the foreign-origin oil was recoverable from the Assessee and if the penalty was justified. The Revenue's appeal regarding the confiscation of goods was rejected as the Commissioner's findings were supported by the evidence on record.3. After hearing both sides and examining the evidence, the Tribunal decided to remand the matter to the Commissioner for a fresh examination of the dutiability of the slop/waste oil, considering the test reports and relevant legal judgments. The Assessee's appeal was allowed by way of remand. On the other hand, the Revenue's appeal, challenging the dropping of confiscation proceedings, was rejected as the Commissioner's detailed findings were found to be supported by the evidence on record. Consequently, both appeals were disposed of accordingly.