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2023 (8) TMI 1101
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....%. As per the said Load Port Certificate, samples had been drawn as per Systematic Sampling method provided in BS1017. Further, at the port of Import, SGS India Ltd carried out systematic sampling during course of loading of the cargo into trucks at the port jetty and provided their Certificate of chemical analysis dated 8th May 1995, as per which also the ash content is below 12% viz 10.79%. 3. The Appellant's claim for exemption duly supported by the Load Port Certificate of Analysis was not accepted by the department despite there being no reason to doubt or reject the said Certificate as being defective, being brought on record. The assessing officer therefore resorted to provisional assessment by sending a Random sample drawn from the imported goods for test to CRCL, New Delhi under a Test Memo dated 24-4- 1995. 4. Show cause Notice dated 10-7-1996 was thereafter issued to the Appellant, purportedly under Section 28 of the Customs Act 1962, which relied upon Test report dated 7-3-1996 of CRCL, New Delhi, as per which the Ash content was 21.33%. The Notice contended that since the ash content as per the said test report of CRCL, New Delhi was above 12%, the goods were....
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....pellant to respond to the same. 9. The said Order-in-Original dated 31-12-2013 has been upheld by the Commissioner (Appeals) by Order-in-Appeal dated 15-5-2004. The Deputy Commissioner and the Commissioner (Appeals) have relied upon the decision of the Hon'ble Tribunal in the case of CC v Tata Chemicals Ltd-2004 (177) ELT 1038. The said decision of the Tribunal has been reversed by the Hon'ble Supreme Court in Tata Chemicals Ltd v CC-2015 (320) ELT 45 10. At the outset, the Appellant through the learned Advocate submits that the issue stands decided and concluded in the Appellant's favour by the decision of the Hon'ble Supreme Court in the case of Tata Chemicals Ltd v CC-2015 (320) ELT 45. 11. The Hon'ble Supreme Court has held in Para 14 of the said judgment that in absence of there being any reason or ground to doubt or reject the Load Port Test Certificate showing ash content below 12%, as defective, resort to provisional assessment and the entire chemical analysis of the imported goods done by the Department is ultra vires Section 18(b) of the Customs Act. 12. The said ratio and principle laid down by the Hon'ble Supreme Court squarely applie....
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....on. The material collected from all the increments in a sub-lot shall be mixed together and shall constitute a gross sample. Each of the gross samples is then subjected to reduction to obtain Laboratory sample for each sub-lot. Laboratory sample of each Sub-lot is tested for parameter such as Ash content and then average of the test results of all sub-lots is taken. 16. The Deputy Commissioner and Commissioner (Appeals) have proceeded on the basis that the samples were drawn in presence of Appellant's representative who did no object to the method of sampling and in this behalf, they have relied on the Tribunal's decision in Hon'ble Tribunal in the case of CC v Tata Chemicals Ltd-2004 (177) ELT 1038. The said decision of the Tribunal has been reversed by the Hon'ble Supreme Court in Tata Chemicals Ltd v CC-2015 (320) ELT 45, in which the Hon'ble Supreme Court has held that if the sample has not been drawn as provided in IS 416, no reliance can be place on the test report of such sample and it is immaterial that the method of sampling had not been objected to by the importer at the time of drawl of sample. 17. The learned advocate further submitted that thi....
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....hermal coal" by Subhajit Aich and ors (Copy Exhibit "E" hereto) that exposure of coal to the weather results in increase in the ash content. In the case of Adani Exports Ltd v CC-2010 (249) ELT 93, where there was a delay of 5 months in getting the sample tested after drawing of sample, the Hon'ble Tribunal held that in absence of any explanation for such delay, the test report which was delayed by 5 months was not reliable. In the present case, the delay is of eleven months for which there is no explanation at all. 21. In any event, as would be evident from the CRCL Brochure-Exhibit ("F"), CRCL did not have the instrument for analyzing Ash content in coal prior to 2019, when analysis was carried out manually, as a result of which as per CRCL Brochure itself, results were not precise. This itself makes the CRCL test report unreliable. 22. Without prejudice to the aforesaid submission, it is submitted that the Deputy Commissioner and Commissioner (Appeals) have traveled beyond the Show cause notice and relied upon clarification dated 22-10-2013 obtained by the Deputy Commissioner from CRCL, behind the Appellant's back. The same was not relied upon in the Show Cause ....
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....jamshedpur, in cases where there is no facility to have the test done at the custom house laboratory. The guiding principle should be, before conducting a chemical test, whether the test is absolutely necessary. In such cases the parties should be encouraged to take delivery of the consignment against bonds/guarantees, or part consignments where there is no possibility of the goods being confiscated later for violation of any law. In other cases they should be encouraged to store the goods in the public bond warehouse without warehousing so that the goods need not unnecessarily incur demurrage. The attitude of the staff should be helpful, unless malafides are strongly suspected. The course of action should be generally discussed with the Asstt. Collector. (ii) The Scrutinizing Appraiser, should avoid, as far as possible, calling for large and heavy items to be put up to him as samples. Wherever inspection is necessary, the scrutinizing appraiser should himself visit the docks and examine the goods. such inspection should be done on the same day. (adopted from g.i.m.i 25/5 /59-cus.(crc) dated 10-9-59 w.r.t. e.no.27/6/59-cus (crc) a.d.o.no.117/59) (iii) In all cases....
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.... continuity bonds or do not agree to payment of duty at the higher rate pending the result of test. Further, there may be certain importers who wish to be sure about the exact amount of duty leviable before the time of payment rather than to pay extra duty on demand on receipt of the test report. In such cases, therefore, it is necessary to resort to assessment under the first appraisement system. in the case of iron and steel goods, viz., standard products or goods of recognised brands which are regularly imported and supplied by the same manufacture, a sample should be drawn and tested only once during a specified period as prescribed in the standing instructions. In such cases facility of clearance against continuity bonds should not be denied provided that detailed specifications/test certificates/works analysis reports covering the goods described in the invoice are available to connect the goods with a particular manufacturer. This procedure is to be followed regardless of whether the goods are supplied directly by a manufacturer or by a supplier in the country of export. Drawing of Samples avoidance of Delay-Instruction Reg.: In order no.505/83-c t....
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....of drawing of sample of Coal is that provided in IS 436, which provides for Systematic Sampling by dividing the entire quantity of coal into sub-lots and drawing of gross sample from each sub-lot and arriving at the average of test results of all sub-lots. As against this, it is apparent from the Show Cause Notice (Page 19 of the Appeal) that only random sample was drawn and Systematic Sampling as per IS 436 was not carried out. 26.2 In the submissions dated 11-8-2023 filed by learned AR (Copy emailed to the Appellant's Advocate on 14-8-2023), the learned AR has placed on record letter dated 10-8-2023 of the Assistant Commissioner of Customs, forwarding extract from Appraising Manual Volume II. 26.3 The Appellant's response to the same is as follows. 5. Firstly, the year of the Appraising Manual is not indicated and it is not shown that the same pertains to the year 1995, when the import in the present case took place. On this ground itself no reliance can be placed on the said Appraising Manual. 26.4 Secondly, without prejudice to the aforesaid submission, it is submitted that there is nothing in the said Appraising Manual which prescribes the method/ procedure of drawing....
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..../ method of sampling had been prescribed in law for Coal and therefore the procedure/ method provided in IS 436 will apply, which requires dividing the entire quantity of coal into sub-lots and drawing of gross sample from each sub-lot and arriving at the average of test results of all sub-lots. 10. The Assistant Commissioner has in the said letter dated 10-8-2023 further contended that no objection as to the method of Random sample had been raised by the Appellant's representative at the time of drawing of sample. Such a contention of the department stands rejected by the Hon'ble Supreme Court in the said decision in Tata Chemicals Ltd v CC - 2015 (320) ELT 45 (SC), in which in Para 17, the Hon'ble Supreme Court has held that there can be no estoppels against law and since in law as laid down by the Hon'ble Supreme Court, sampling of coal ought to be as per IS 436, it had to be done in that manner only and since it was not done in that manner, it had no existence in law and merely because the Appellant did not object at the time of sampling, it will not convert the illegality into a legal act. 11. Further, the Hon'ble Supreme Court has held in Para 14 of the said judgment, that in....
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....awn from each sub lots by drawing of samples from the same sub lots. The appellant therefore, submits that the sampling not having been done as per the procedure laid down in IS 436. the samples drawn and the test result obtained were rejectable. Party has also relied upon the factum of delay in sampling of 11 months. Department on the other hand has relied upon the fact that the sample were sent for test immediately and therefore the delay if any is only in the receipt of the test report which was received after 11 months. Further, they also seek to rely on a reference letter dated 18.10.2013 and which was written decades after the result from CRCL. Same however does not being on record the exact date of test in those months. The letter states that gap in testing time will not make difference in ash content. We find that the learned Commissioner (Appeals) in para 13.2 has found as follows.- "13.2. It is an admitted fact that the appellant had imported a consignment of 1861.380 MT (with moisture 10.00%) of Indonesia origin at Porbander Port from Bengkulu and bill of entry No. F-5 dated 17.04.1995 was filed for clearance of the said consignment of 14861.380 MT (with moistur....
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....L has not been indicated by the department even while seeking explanation in the year 2013 from the CRCL authorities regarding their opinion as to what will happen to ash content of coal if coals samples are tested after long gap of time i.e. more than 11th months. As against, the opinion of CRCL which was given after gap of 18 years the appellant have relied upon the decision OF ADANI EXPORTS LTD.Vs. C.C.E as reported in 2010 (249) E.L.T 93 (Tri.-Ahd.) in which it has been held with the delay of even five months can make a difference. Decision of ADANI EXPORTS LTD in relevant portion reproduced below:- "9. After carefully considering the submissions made by both the sides and after having gone through the impugned order and the other documentary evidences, we find that the dispute required to be resolved in the present appeal is as regards the Ash Contents contained in the Weak Coking Coal imported by the appellant. Undisputedly, the certificate of quality procured at the Load Port disclosed the Ash Content on air dried basis as 9.98%. In the same report total moisture on "as received basis is 13.56% and inherent moisture (Air Dried), was 7.44%. The said certificate also ....