Exemption claim for brass scrap cannot be rejected on private inference; incomplete evidence justified remand for fresh adjudication.

An exemption claim for imported brass scrap could not be rejected on the basis of an adjudicator's private inference from an untested discussion with laboratory staff, especially where the importer had not been put on notice of that material. The evidence on record was incomplete, because the chemical report recorded copper, lead, zinc and tin but did not specify the zinc content, and the supplier's fax did not conclusively support the claim. The matter was therefore remanded for de novo adjudication confined to the exemption issue under Notification No. 319/88-Customs, with the earlier clearance under OGL left undisturbed as it had attained finality.

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Issues: Whether the order denying exemption on the claim that the imported goods were brass scrap should be set aside and the matter remanded for fresh adjudication, and whether the clearance granted under the import policy could be disturbed in the remand proceedings.

Analysis: The goods were described in the bill of entry, invoice and bill of lading as brass scrap, and the chemical examiner's report noted the presence of copper, lead, zinc and tin, though it did not specify the percentage of zinc. The adjudicating authority relied upon an oral discussion with the laboratory staff and concluded that zinc was negligible. That approach was held to be infirm because an adjudicating authority cannot substitute personal inference for evidence, and the appellant had not been put on notice of the material relied upon. At the same time, the supplier's fax message produced by the appellant omitted zinc and therefore did not conclusively support the claim for exemption, making it appropriate to afford an opportunity to produce further evidence, including clarification from the supplier. The earlier order permitting clearance under OGL was also noted to have attained finality since no appeal had been filed by the Revenue.

Conclusion: The impugned order was set aside and the matter was remanded for de novo adjudication confined to the exemption claim under Notification No. 319/88-Customs dated 23.12.1988. The finding permitting clearance under OGL was left undisturbed.

Ratio Decidendi: An exemption claim cannot be finally rejected on the basis of untested private discussions or unsupported inference, and where the evidentiary record is incomplete, a fresh adjudication limited to the disputed exemption issue is appropriate.

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