2017 (8) TMI 765 - AT - Customs

Imported Coal Classification Dispute: CESTAT Decisions Clashed, Supreme Court Review Pending

Tamil Nadu Generation & Distribution Corpn. Ltd. Versus C.C., Tuticorin

The case involved the classification of imported coal as steam coal or bituminous coal for duty purposes, leading to conflicting decisions by different ... Classification of imported goods - The coal so imported were claimed to be steam coal which never attracted any duty during the material period. But other coal i.e. Bituminous coal falling under sub-heading 2701 12 00 attracted 5% duty as per N/N. 12/2012-Cus., dated 17-3-2012 - Held that: - Regarding the classification of the coal, different Benches of CESTAT have taken different views at the instance of the parties. The Chennai and Ahmedabad Benches prima facie considered these are the ‘steam coal’ attracting no duty. This was followed by Mumbai Bench. On the other hand, Bangalore Bench of the CESTAT considered it as ‘Bituminous coal’ attracting duty to 5% - the matter is subjudice before the Hon’ble Supreme Court - liberty is granted to the applicants/assessees to come again before this Tribunal after having the final verdict from the Apex Court, within the prescribed time, if advised so. Issues: Classification of imported coal as steam coal or bituminous coal for duty purposes; conflicting orders by different Benches of CESTAT; challenge against pre-deposit exemption by CESTAT Chennai Bench; challenge against classification of coal by Bangalore Bench; liberty granted to applicants/assessees pending final verdict from Supreme Court.Classification of Imported Coal: The appellants-assessees imported coal from various countries, primarily Indonesia, classifying it under chapter sub-heading 2701 19 20 as steam coal, which was duty-free during the relevant period. However, Bituminous coal falling under sub-heading 2701 12 00 attracted a 5% duty as per Notification No. 12/2012-Cus. Different Benches of CESTAT had conflicting views on the classification, with Chennai and Ahmedabad Benches considering it as steam coal with no duty, while the Bangalore Bench classified it as bituminous coal attracting a 5% duty.Conflicting Orders by Different Benches: The conflicting views on the classification of coal led to disputes among the parties, resulting in varied decisions by different Benches of CESTAT. The Chennai and Ahmedabad Benches, followed by the Mumbai Bench, viewed the imported coal as steam coal with no duty implications. In contrast, the Bangalore Bench categorized the coal as bituminous coal subject to a 5% duty, creating inconsistency in the application of duty rates.Challenge Against Pre-Deposit Exemption: CESTAT Chennai Bench had exempted the pre-deposit condition, a decision challenged by the Department before the High Court. The High Court declined to intervene and directed the matter to be resolved expeditiously by CESTAT. This decision added complexity to the case, leading to further legal proceedings and challenges.Challenge Against Classification by Bangalore Bench: The classification of coal as bituminous coal attracting a 5% duty by the Bangalore Bench faced challenges from M/s. Maruti Ispat and Energy Pvt. Ltd. & Others in the Supreme Court through Civil Appeal Nos. 28937/2014 and 9725/2014. The matter was pending before the Supreme Court during the proceedings, indicating ongoing legal disputes and uncertainties regarding the correct classification and duty implications of the imported coal.Liberty Granted Pending Supreme Court Verdict: Considering the unresolved disputes and pending Supreme Court decision, the Tribunal granted liberty to the applicants/assessees to revisit the Tribunal after receiving the final verdict from the Supreme Court, within the specified time frame. This provision aimed to ensure that the parties could seek further clarification and resolution based on the forthcoming judgment, indicating the importance of a definitive legal interpretation in resolving the classification and duty issues related to the imported coal.