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<h1>Court sets aside assessment order due to conflicting reports & violation of natural justice. Fresh hearing ordered.</h1> <h3>Tarini Minerals Private Limited Versus Deputy Commissioner, Custom House, Paradeep Custom Division, Paradeep, Odisha & Others</h3> Tarini Minerals Private Limited Versus Deputy Commissioner, Custom House, Paradeep Custom Division, Paradeep, Odisha & Others - TMI Issues Involved:1. Legality of the final assessment order dated 28.06.2022 under Section 18(2) of the Customs Act, 1962.2. Validity of conflicting test reports from different Central Revenue Control Laboratories (CRCL).3. Applicability of principles of natural justice in the assessment process.4. Interpretation of exemption notifications under customs law.Issue-wise Detailed Analysis:1. Legality of the Final Assessment Order:The petitioner sought the quashing of the final assessment order dated 28.06.2022 issued by the Deputy Commissioner, Paradeep Customs Division, under Section 18(2) of the Customs Act, 1962. The order was based on test reports from CRCL, Kolkata, and CRCL, New Delhi, which indicated an iron (Fe) content of 58.5% and 58.75%, respectively. Consequently, the goods were reclassified under Customs Tariff Item No. 26011143, attracting a 30% customs duty, resulting in a demand of Rs. 8,57,60,892/-. The petitioner argued that the final assessment did not consider the subsequent codified re-test report from CRCL, Mumbai, which showed an Fe content of 55.6%, thus qualifying for a NIL rate of duty.2. Validity of Conflicting Test Reports:The petitioner highlighted that the re-test report from CRCL, New Delhi, was not based on an independent analysis but followed the report of CRCL, Kolkata. The petitioner requested a codified re-test from CRCL, Mumbai, which later confirmed an Fe content below 58%. This discrepancy between the test reports from different CRCLs formed the crux of the dispute. The court noted that it is not appropriate to weigh conflicting scientific reports in its extraordinary jurisdiction under Article 226 of the Constitution of India.3. Applicability of Principles of Natural Justice:The petitioner argued that the final assessment order was passed without awaiting the codified re-test report from CRCL, Mumbai, despite repeated requests. This was seen as a violation of the principles of natural justice. The court observed that the petitioner had no opportunity to present the CRCL, Mumbai report before the assessing authority, thus necessitating a re-assessment to ensure fair hearing and consideration of all relevant evidence.4. Interpretation of Exemption Notifications:The court referred to the Supreme Court's judgment in the case of *Dilip Kumar and Company & Others* (2018) 9 SCC 1, which held that exemption notifications should be interpreted strictly, and any ambiguity should favor the revenue. The burden of proving the applicability of an exemption lies on the assessee. Given the conflicting test reports, the court emphasized that the exemption notification must be construed strictly, and any benefit of doubt should be given to the revenue.Conclusion:The court set aside the final assessment order dated 28.06.2022 due to the conflicting reports from different CRCLs and the violation of principles of natural justice. The petitioner was directed to appear before the assessing authority on 26.09.2022 for a fresh hearing. The assessing authority was instructed to consider all evidence, including the CRCL, Mumbai report, and pass a new assessment order after granting a reasonable opportunity of hearing to the petitioner. The writ petition was disposed of with no costs.