TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 656
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....M/s. Worldlink T.C. Bond Store, Gujarat had imported 'Nephtha' from its foreign supplier. 1.2 Vessel loaded the cargo from Iran and reached at Kandla Port on 30.07.2004. The total quantity of the subject goods was 5872.881 Mts. Out of the said total quantity, 3472.881 Mts covered vide BL Nos. 83/01 to 83/20 all dated 25.07.2004 pertained to Appellant - M/s. Neptune Tradelinks Pvt. Ltd. 1650 Mts. Covered vide BL Nos. 83/21 to 83/23 all dated 25.07.2004 pertained to M/s. Hazoor sahib Chemicals Pvt. Ltd and balance 750 Mts covered vide BL Nos. 83/24 to 83/26 all dated 25.07.2004 pertained to M/s Worldlink T.C. Bond Store. The said cargo on discharge was stored in the tank terminals of M/s J.K. Synthetics Ltd. Kandla and M/s Friends Salt Works and allied Industries, Kandla. Appellant had entered into contract dated 8.7.2004 with its foreign supplier for import of the subject goods (page 177-181 vol.2 paper book) 1.3 Bills of Entry for warehousing bearing Nos. 011798, 011799,011800 all dated 30.07.2004 were filed by M/s. Neptune Tradelinks Pvt. Ltd., M/s. Hazoor Sahib Chemicals Pvt. Ltd and to M/s Worldlink T.C. Bond Store respectively, declaring the imported goods as 'Naphtha' whil....
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....e u/r... " 1.7 Further it is the case of revenue that composite sample were also drawn from the above shore tanks on 07.08.2004 and the same were sent for testing to M/s. IOC Limited, Kandla and Refinery Division Jamnagar of M/s. Reliance Industries Limited. In regard to the aforesaid sample, to reports dated 14.08.2004 (pages 121, 122 vol. 2 paper book) were rendered by IOC Limited and a report dated 12.08.2004 (along with covering letter dated 12.08.2004) was rendered by M/s. Reliance Industries Limited (pages 139- 140 vol. 2 paper book). As per revenue these reports were against the detailed submissions in this regard will be made herein after. 1.8 As per revenue in view of above, the imported goods were seized on 17.08.2004. However on request having been made by the Appellant and worldlink T.C. Bondstore, revenue permitted provisional clearance of the goods against bond and bank guarantees. Revenue conducted further investigation, while recording statements various persons. Basic case of revenue is that boiling range/distillation range is the main deciding factor for ascertaining the nature of the goods and its classification and as per the aforesaid reports and opinion th....
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.... opinion dated 7.8.2004 about classification should be ignored. While appreciating the submission of Appellant in regard to reports rendered by Reliance Industries Ltd. and IOC Ltd. it was held that the said reports cannot be the sole basis for coming to conclusion against the importers and that the said reports at best could be considered as supportive evidence. Further it was held that the report of Chemical Examiner did not indicate the method adopted in the analysis. Therefore, it was not clear whether the tests report was conducted as per ASTM D86 method prescribed under Note 4 of Chapter 27 and that the said information could have been elicited during cross examination of the chemical Examiner, under these circumstances cross examination of the chemical Examiner ought to have been allowed by the Ld. Adjudicating authority. Accordingly the impugned order was set aside and the matters were remanded for denovo consideration after permitting cross examination of the 'Chemical Examiner' and in light of the observation made in the said order dated 18.02.2008 1.11 In remand proceedings Ld. Commissioner noted and reproduced the aforesaid directions of this Tribunal (in the remand o....
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....the Ld. Respondent confirmed demand of duty, imposed redemption fine and penalties as was done vide initial order in original dated 29.3.2007, as stated above. 2. Ld. Counsel for the appellant argued that the Tribunal orders dated 18.02.2008 remanded the matter back for the de-novo consideration permitting cross examination of the Chemical Examiner. In this circumstances cross examination of Shri. Shri. T.K. Myelvalganan was beyond the scope of remand. It was argued that no Reliance can be placed on the cross examination of Shri. T.K. Myelvalganan. It is argued that the second witness was introduced during the said remand proceedings only to cover up for the lacunas pointed out during cross examination of the Chemical Examiner, Shri. Dilip Mehta. Ld. Counsel further argued that Reliance Industries Limited and IOC Limited are in the nature of business competitors and no reliance on the tests reports made in the labs of the said companies can be taking on record. 3.1 Ld. Counsel further pointed out that there are following requirements for the standard tests method for ASTM D86. * Page 107 where from the table: preparation of apparatus it is apparent that for the sample meant to ....
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....ing, as stated above,. In answer to question no. 45 he stated that the equipment used for testing the sample did not bear the nomenclature of mode of test of ASTM- D86. Further in contradiction to the prescribed temperature below 5/10◦ centigrade, as stated above, in answer to question no. 56 Shri. Dilip Mehta replied that the sample was cooled to 25 degree centigrade before commencing distillation. Further in answer to question no. 13 that whether the method of laboratory test carried out was mentioned in the report or not, Shri. Dilip Mehta replied that it is not mentioned. Q37. In one of the test report(No. 150), you have reported the final boiling point is 223 C and you have also reported that the at the same temperature, the recovery is 69%. Please tell us what happened to balance 31%? A37. Probably, they losses. Q38. Did you record that it was due to losses? A38. No. Q39. How do you remember today after more than 6 years that it was due to losses? A39. It is so written in the report. From the above it is apparent that the losses were not recorded, which were required to be so recorded in view of the procedure of ASTM D86 method, as stated above. The answer....
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.... Further it was requested that the test results are confidential and same may kindly be used for internal purpose only. Along with the said covering letter, there is an unsigned test report and from the perusal of said covering letter, there is an unsigned test report and from the perusal of said report, it is apparent that samples were not subjected to 210◦ centigrade to ascertain the percentage by volume (including losses) which got distilled. RIL are also manufacturing and marketing Naphtha, hence an interested party. Hence that said report does not carry any evidentiary value." 5. Learned Counsel pointed out that the impugned order solely relied on the cross examination of Sh. T.K. Myelvalganan and ignores the cross examination of Shri. Dilip Mehta, Chemical Examiner. 6. Ld. Counsel further argued that the redemption fine has been imposed arbitrarily without considering the margin of profit. Learned Counsel further argued that the penalty has been imposed without any reason. He argued that the appellant had entered into contract dated 08.07.2004 with the foreign supplier import of the subject goods and backed by Letter of Credit dated 12.07.2004. He further stated that ....
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....ion should be ignored and should be considered by the adjudicating authority independently. The report of the Chemical Examiner does not indicate the method adopted by him in the analysis. Therefore, it is not clear whether the test report has been conducted as per ASTM D 86 method prescribed under Note 4 of Chapter 27. This information could been elicited during cross-examination of the chemical Examiner. Under these circumstances, the adjudicating authority ought to have permitted cross-examination of the Chemical Examiner. 7. In the light of the above, we set aside the order of the commissioner and remand the matter for de-novo consideration after permitting cross examination of the Chemical Examiner and in the light of observations made in this order. The appellants are entitled to adduce further evidence in their support including evidence, if any, to show that the report of M/s Atlas Inspection Services Ltd., Iran relates to the disputed consignments. The Commissioner shall give a reasonable opportunity of hearing before deciding the issue." 10. In the remand proceedings the Cross Examination of Shri. Dilip Mehta, Assistant Chemical Examiner was allowed and conducted on 10....
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.... Grade-I. He was introduced as witness in the remand proceedings by the Commissioner. The appellant has strongly objected to the introduction of fresh evidence in the shape of the cross examination of Shri. T.K. Myelvalganan Chemical Assistant Grade-I. It has been argued that the direction of Tribunal was only to allow cross examination of Chemical Examiner and not of the Chemical Assistant Grade-I. The appellant are argued that the report was signed by Chemical Examiner and not by the Chemical Assistant Grade-I. On the other hand Revenue had argued that the entire procedures and testing was done of Chemical Assistant Grade-I and not by the Chemical Examiner himself and therefore only Chemical Assistant Grade-I could have answered the question regarding the method adopted for the testing of the samples. It is notice that Shri. Dilip Mehta, Assistant Chemical Examiner whose cross examination, the appellant had accepted, is any 'Assistant Chemical Examiner' and not 'Chemical Examiner'. Moreover, it is seen that the report of the sample testing was signed by both 'Shri. T.K. Myelvalganan Chemical Assistant Grade-I' as well as 'Shri. Dilip Mehta, Assistant Chemical Examiner'. Thus, in ....
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....ds under test? A. flash point is not an important criterion for this sample even though in our Customs tariff, there are two types of classification- one flashing below 25 degree C and another, flashing below 25 degree C. Q. What was the method used by you to determine the flash method? A. Abel Closed cup Method. Q. Which method was adopted for determining the flash point? A. IP 170/95. Q. what was the lowest temperature recorded by you? A. -30 degree C to 70 degree C in practice -5 degree C to 66.5 degree C. Q. As per your answer, if you can determine flash point as -5 degree C, why you are reporting flash point below 25 degree C? A. For classification, Customs tariff required whether it is above 25 or below 25 degree C. Q. you have been carrying all tests by being guided by Customs tariff or the classification made thereto? A. Yes. Q. I draw your kind attention to the report dated 11.8.2004. The initial Boiling Point is shown at 47 degree C and at 61 C, recovery has been shown of 10%. What time did it consume to report this recovery of 10%? A. I followed the exact group prescribed in ASTM D 86 regarding the temperature and recovery. I have nothing to add. Q. Is it t....
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....to decide the group under ASTM D 86. It is also one of the parameter to decide the group? Q. Am I right that such approach is not permissible under ASTM D 86? Yes or No? A. No. It is not correct. Q. Is it that two samples having the density of 0.7249 and that of 0.6783 would have exactly the same aromatic contents to each other? A. In both cases, the aromatic contents can be nearly same but the difference is due to the predominance of lighter hydrocarbons in the second case and moderately higher hydrocarbons in the previous case. Q. What was the method adopted by you for finding the aromatic contents? A. ASTM D-1019 (IP NO O. 145/69). Q. Do you think that the contents of Sulphur and/ or Lead have any significance to determine the nature of the sample? A. According to Customs Tariff classification, presence of Sulphur and Lead content is not important. There is no need to estimate these two parameters. A. Is it that the testing of sample is carried out as per the approach for the Customs Tariff and otherwise? A. The testing of the samples is carried out as per Customs Tariff and not for quality control level. Q. As per ASTM D 86 method for distillation is it necessary to ....
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....ps. Apparatus arrangement, condenser temperature, and other operational variables are defined by the group in which the sample falls. TABLE 3 Sampling, Storage, and Sample Conditioning Group U Group 1 Group 2 Group 3 Group 4 Temperature of sample bottle C̊ <5 <10 ̊F <40 <50 Temperature of stored sample ̊C <5 <10ᶺ <10 ambient ambient ̊F <40 <50ᶺ <50 ambient Ambient Temperature of sample after Conditioning prior to analysis C̊ <5 <10 <10 Ambient or 9 to 21 ̊C Ambient or above pour pointᴮ ̊F <40 <50 <50 Ambient or 48 to 70 ͨF Ambient or above pour pointᴮ If sample is wet resample resample resample dry in accordance with 7.5.3 If resample is still wetᶜ dry in accordance with 7.5.2 A Under Certain circumstances, samples can also be stored at temperaturesͨ below 20 ̊C (68 ̊ F) See also 7.3.3 and 7.3.4. a If sample is (Semi)-solid at ambient temperature, see also 10.3.1.1. C. If samples is known to be wet, resampling may be omitted. Dry sample in accor....