Natural justice and conflicting test reports made denial of concessional customs duty unsustainable.

Concessional customs duty under Notification No. 62/2007 depended on iron content being below 62%. Where the assessee's recognised testing agency and the destination-port certificate both showed iron content below that threshold, but the departmental laboratory report gave only a bare Fe percentage without disclosing the basis of calculation, the reliability of the departmental report became doubtful. The failure to consider the request for re-test and to deal with the assessee's objections with proper reasons was treated as unfair and contrary to natural justice, rendering denial of the notification benefit and the duty demand unsustainable.

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Issues: Whether the denial of concessional duty under Notification No. 62/2007 was justified on the basis of the Customs House Laboratory report, and whether the appellant was entitled to re-test in view of the conflicting test reports and alleged violation of natural justice.

Analysis: The concessional rate depended on iron content being below 62%. The record contained materially different reports: the appellant's recognised testing agency and the destination-port certificate both showed iron content below 62% and also recorded moisture and other impurities, while the Customs report gave only a bare Fe percentage and did not disclose the basis on which the figure was computed. In these circumstances, the reliability of the departmental report was doubtful. Since the appellant's request for re-test was not considered, and the impugned order did not address the appellant's substantive objections with proper reasoning, the procedure adopted was found to be unfair and contrary to natural justice.

Conclusion: The denial of the notification benefit and the duty demand were unsustainable. The appeal was allowed and consequential relief followed.

Ratio Decidendi: Where competing test reports on export cargo materially differ and the departmental report does not disclose a reliable basis for its conclusion, denial of a requested re-test and summary rejection of the assessee's evidence vitiate the adjudication for breach of natural justice.

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