Appeal granted, order set aside. Procedural fairness key in customs assessment.

The Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief to the Appellant. The Tribunal found that the department's reliance on the CRCL test report was unjustified due to procedural unfairness, lack of adherence to systematic sampling methods, delay in testing, and lack of proper instrumentation. The Appellant's exemption claim based on the Load Port Test Certificate was upheld, emphasizing the importance of procedural fairness and adherence to legal standards in customs assessments.

---

---

Issues Involved:
1. Validity of Load Port Test Certificate.
2. Legitimacy of Provisional Assessment and CRCL Test Report.
3. Adherence to Systematic Sampling Method.
4. Reliability of CRCL Test Report due to Delay and Lack of Proper Instrumentation.
5. Procedural Fairness and Adherence to Legal Standards.

Summary:

1. Validity of Load Port Test Certificate:
The Appellant imported "Coking Coal" and sought exemption from customs duty based on the Load Port Test Certificate, which showed ash content below 12%. The certificate was from PT. Superintending Company of Indonesia, indicating ash content of 9.98% (Air Dried Basis)/10.99% (Dried Basis). The department did not accept this certificate and resorted to provisional assessment.

2. Legitimacy of Provisional Assessment and CRCL Test Report:
The department issued a Show Cause Notice based on a CRCL test report showing 21.33% ash content, demanding differential duty. The Hon'ble Tribunal previously held that issuing the Show Cause Notice before finalizing the provisional assessment was premature. Upon remand, the Deputy Commissioner finalized the assessment based on the CRCL test report, denying the exemption and demanding differential duty.

3. Adherence to Systematic Sampling Method:
The Appellant argued that the sample sent to CRCL was a random sample, not drawn by systematic sampling as required by IS 436. The Hon'ble Supreme Court in Tata Chemicals Ltd v CC-2015 (320) ELT 45 held that in the absence of any reason to doubt the Load Port Test Certificate, resorting to provisional assessment and chemical analysis was ultra vires Section 18(b) of the Customs Act. The Tribunal noted that systematic sampling was not followed, making the CRCL test report unreliable.

4. Reliability of CRCL Test Report due to Delay and Lack of Proper Instrumentation:
The CRCL tested the sample after an 11-month delay and did not have the proper instrument for analyzing ash content before 2019. The Tribunal found the delay and lack of precise instrumentation made the CRCL test report suspect and unreliable. The department's reliance on a clarification obtained behind the Appellant's back was also deemed procedurally unfair.

5. Procedural Fairness and Adherence to Legal Standards:
The Tribunal emphasized that procedural fairness was not adhered to, as the Appellant was not given an opportunity to respond to the clarification obtained by the Deputy Commissioner. The Tribunal concluded that the department failed to justify the process of sampling or the delay in receiving the test report, leading to the acceptance of the appeal and setting aside the impugned order with consequential relief to the Appellant.

Conclusion:
The appeal was allowed, and the impugned order was set aside, providing consequential relief to the Appellant. The Tribunal pronounced this decision in the open court on 23.08.2023.

---