Scope of Show Cause Notice: adjudication cannot rely on post-notice tests not referenced; contemporaneous reports prevail.

Adjudication must not introduce a new foundational ground absent from the Show Cause Notice; reliance on laboratory reports produced after issuance of the notice and not referenced therein vitiates the adjudicative basis, rendering the demand unsustainable. Contemporaneous load-port and departmental test reports establishing Mean Reflectance and CSN consistent with Notification No. 21/2002-Cus meet the importer's burden to claim conditional exemption; a belated laboratory report produced after substantial delay, without evidence of sample preservation or scientific assurance, cannot displace contemporaneous reliable evidence. Operative effect: the denial of exemption and confirmed demand were set aside and relief granted accordingly.

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Issues: (i) Whether the impugned adjudication travelled beyond the scope of the Show Cause Notice by relying upon CIMFR test reports not referred to therein; (ii) Whether the coal imported under Bill of Entry No. 5919332 dated 06.02.2012 satisfied the conditions of exemption under Notification No. 21/2002-Cus as amended.

Issue (i): Whether the impugned adjudication travelled beyond the scope of the Show Cause Notice by relying upon CIMFR test reports not referred to therein.

Analysis: The Show Cause Notice dated 13.06.2013 alleged finalization of provisional assessment without obtaining Mean Reflectance from an authorized laboratory and questioned the reliability of load port CSN reports; it did not mention remnant samples being sent to CIMFR nor annex CIMFR reports. The impugned order relied decisively on CIMFR reports dated 31.01.2014 and 19.03.2014 which post-dated the Show Cause Notice. The CIMFR reports formed the substituted evidentiary basis for confirming demand while the original grounds in the notice were discarded. The subsequent supply of documents during adjudication did not cure the jurisdictional defect of introducing a new foundational ground not contained in the notice.

Conclusion: The adjudication travelled beyond the scope of the Show Cause Notice by relying on CIMFR reports not referred to therein; the impugned order is legally unsustainable on this ground.

Issue (ii): Whether the coal imported under Bill of Entry No. 5919332 dated 06.02.2012 satisfied the conditions of exemption under Notification No. 21/2002-Cus as amended.

Analysis: The notification required Mean Reflectance (MR) above 0.60 and Crucible Swelling Number (CSN) of 1 or above. Contemporaneous evidence comprised the load port Certificate of Quality dated 17.01.2012 reporting CSN 1.5 and MR 1.75, and the Chemical Examiner's report dated 02.04.2012 reporting CSN 3. The CIMFR report showing CSN 0.5 was produced more than two years after sample drawal; there is no record of preservation or storage conditions to ensure reliability against deterioration. No cogent scientific reason was recorded to reject the contemporaneous departmental report. The importer's contemporaneous documents thus discharged the burden to establish eligibility and preferring a belated test report over contemporaneous reliable evidence was arbitrary.

Conclusion: The coal imported under Bill of Entry No. 5919332 dated 06.02.2012 satisfied the exemption conditions of Notification No. 21/2002-Cus as amended; the demand of differential duty and interest is unsustainable.

Final Conclusion: The impugned Order-in-Original No. 01/2015 dated 10.09.2015 is set aside insofar as it denies exemption and confirms demand in respect of Bill of Entry No. 5919332 dated 06.02.2012; the appeal is allowed with consequential relief in accordance with law.

Ratio Decidendi: An adjudication cannot introduce or substitute a new foundational ground not contained in the Show Cause Notice; contemporaneous test reports evidencing compliance with conditional exemption must prevail over belated testing conducted after substantial delay absent proof of sample preservation and scientific reliability.

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