2018 (5) TMI 72 - AT - Customs

Import exemption appeal allowed due to lack of re-testing; Revenue criticized for decision without re-testing.

M/s Shree Electromelt Ltd. Versus Commissioner of Customs, Jamnagar

The Tribunal allowed the appeal, setting aside the order by the Commissioner of Customs regarding the import of goods claiming exemption under a specific ... Benefit of N/N. 21/2002-Cus dated 1.3.2002 (Sr. No. 68) - import of 6500 MTs of Coking Coal in Bulk - difference in test reports - Held that: - Once there are contradictions on the test reports, needless to mention that the best course of action sould have been to re-test the sample - In the present case, the appellant has not accepted the test report of the Chemical Examiner and consistently requested the department to re-test the sample to ascertain the parameters again. There is nothing wrong in such request of the appellant seeking the re-test of the sample as it is permissible under law - appeal is allowed by way of remand to the adjudicating authority for re-test of the sample as requested by the appellant. Issues:1. Interpretation of exemption notification for imported goods.2. Validity of test reports and request for re-testing.3. Principles of natural justice in assessment process.4. Authority's discretion in allowing re-testing of samples.5. Quantum of fine and penalty imposed.Analysis:1. The case involved appeals against an order passed by the Commissioner of Customs regarding the import of coking coal claiming exemption under a specific notification. The appellant's goods were provisionally assessed, but subsequent testing revealed them to be non-coking coal, leading to duty confirmation and confiscation. The main issue was the interpretation of the exemption notification based on conflicting test reports.2. The appellant argued that the supplier's test report at the load port declared the goods as coking coal, meeting exemption conditions. However, the Chemical Examiner's report differed, prompting requests for re-testing, which were not considered. The appellant contended a violation of natural justice due to the mismatch in reports. The Revenue countered that technical re-testing was done upon request, focusing on the CSN parameter.3. The Tribunal found merit in the appellant's argument, noting discrepancies in test reports necessitating re-testing. It held that the appellant's request for re-testing was valid under the law, criticizing the Revenue for not allowing it before making a final decision on exemption eligibility. The Tribunal emphasized the importance of re-testing when contradictions exist in reports to ensure a fair assessment process.4. Consequently, the impugned order was set aside, and the appeal was allowed for remand to the adjudicating authority for re-testing the sample as requested by the appellant. The Tribunal highlighted the necessity of re-testing before determining the eligibility for exemption based on the sample's nature. The authority's discretion in allowing re-testing was emphasized as a crucial step in ensuring a just and accurate assessment process.5. Additionally, the Revenue's appeal challenging the quantum of fine and penalty imposed was not addressed due to the remand for re-testing. The Tribunal disposed of the appeals by remanding the matter to the adjudicating authority for further assessment based on the outcome of the re-testing, maintaining a focus on fair and thorough evaluation in line with legal principles.