TaxTMI 
TaxTMI 
2024 (2) TMI 314
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....ismissed the appeal preferred by the appellant. Therefore, the present appeals. 1.2 The following four issues involved in the present appeals:- (i) Whether the Rubber Processing Oil imported by the Appellant is classifiable under Chapter Heading No. 27101990 as classified by the Appellants or under Chapter Heading No. 27079900 as classified by the Revenue. (ii) Whether the value of the imported RPO can be enhanced based on the consent letters given by the directors of the Appellants at the time of release of the goods, without following the due process of law as contemplated under Section 14 of the Customs Act read with Customs (Determination of Value of imported value) Rules, 2017 (iii) Whether the Appellants mis- declared the Country of Origin in the Bills of entry filed by them. (iv) Whether the quantum of penalties and redemption fine imposed disproportionate to differential duty involved in the matter 1.3 The order of the Adjudicating Authority was based on the test report of Custom House Laboratory at Kandla. Few test reports of Custom House Laboratory, Kandla and the statements of the Director of the appellant M/s. Rajkamal Industria....
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....ise- 2001 (134) ELT 285 wherein it was held that the test report can be the basis of classification only for those products for which the goods were tested. 2.2 Without prejudice to the above, he further submits that it is an obligation upon the Laboratory to provide a method of testing. In the present case none of the reports provides the testing method and therefore, the same is not applicable. In the following cases, it is held that whenever the method of testing is relevant, the method adopted ought to be mentioned in the test report. He takes support of the following judgments:- • UK Paints Industries vs. Collector of Customs - 1994 (74) ELT 392 (T) • Samdur Manganeze & Iron Ores Ltd vs. Commissioner of Customs - 2004 (177) ELT 1094 (Tri.Mum) • Samdur Manganeze & Iron Ores Ltd vs. Commissioner of Customs - 2007 (218) ELT 291 (Tri. Mum) 2.3 As regard the enhancement of the value of the goods, he submits that both the lower authorities enhanced the value based on the consent letters by the director of both the importers. It is settled law that the burden lies upon the revenue to show that the value declared by the importer is incorrec....
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....rector. 2.6 Without prejudice to the aforesaid, it is also submitted that there is no intention on the part of the appellant of the director to evade custom duty, the appellant have classified the disputed goods under Chapter Heading No. 27101990 based on valuation under same heading and the decision of Sah Petroleum Ltd (Supra) however, value ought not to have been enhanced on the basis of the Consent letters. There is no undue benefit in declaring another country of origin. Therefore, he prays that the appeals may be allowed with consequential relief. 3. Shri Himanshu P Shrimali, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that the main issue to be decided in the present case is the classification of Rubber Processing Oil imported. The lower authorities have decided the classification under Chapter Heading No. 27079900 on the basis of a test report of Custom House Laboratory, Kandla. The basis of department's claim for classification of RPO is the chapter note 2 of chapter 27 of Customs Tariff Act which is rep....
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....he appellant has not claimed any preferential rate of duty. iii. Enhancement of declared value twice, from USD 500 PMT(C &F Kandla) to USD 531.500 PMT(C & F Kandla) and therefore, further enhancement to USD 585 on the basis of the copy of invoice received from shipping agent. 1.1 xxxxxx 1.2 xxxxxx 2. xxxxx 3. xxxxx 4. We have carefully considered submissions made by both the sides, and perused the rerecords. In the present appeal, issue to be decided by us in the appeal filed by M/s. Amit Petrolubes Pvt Ltd are as under :- i. Classification of Rubber Processing Oil (RPO) ii. Country of origin of said goods iii. Enhancement of declared value twice. 4.1. As regards classification of Rubber Processing Oil (RPO), we find that was held by the revenue under CTH 27079900 treating the parameters of aromatic constituents is 50% i.e. more than non-aromatic constituents on the basis of test report dated 26.09.2012 issued by Customs laboratory. 4.2. The submission of the appellant is that test report of Customs laboratory, Kandla does not mention, the method adopted by customs laboratory for test....
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....sidered by the Tribunal in Agrawal Industrial Corporation Ltd. v/s. Commissioner Of Customs, Manglore, 2020 (373) ELT 280 ( Tri.- Bangalore), whereby the Hon'ble Tribunal has set aside the redemption fine and penalty imposed under Section 112(a) and 114AA of Customs Act, 1962 on the ground that the country of origin was mis-declared in the bill of entry by taking note of the fact that the importer had not claimed any preferential rate of duty on this basis. 4.6. Considering the said decision of the Tribunal and fact of the present case, we hold that no penalty is sustained on this ground. 4.7. As regards the 3rd issue i.e. enhancement of the value of the imported goods twice, we find that once the value was enhanced from USD 500 PMT to USD 515 PMT , which was accepted by the appellant. However, the value was further enhanced to USD 585 only on the basis of one invoice bearing No. TOP SPL /CP/34 dated 09.07.2012 produced by the shipping agent. 4.8. On this basis, the assessable value is determined by adding freight @20 % and insurance @ 1.125%. We find that the appellant tendered copy of Bill of Lading No. MYPKGINIXY517631 dated 12.07.2012 for the subject ....
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....amples and in case of Appellant M/s. Bagwan Petroleum, test report of four samples were issued. The appellant vehemently argued that the department's claim of classification at the most shall apply only in respect of the numbers of samples tested. We find that this issue has been considered in the case of Shalimar Paints (Supra) wherein the Tribunal has passed the following order:- "7. The first grievance of the appellant is that though the classification lists in question covered about 30 products, test reports relatable to only 4 products are available and there is absolutely no material against the appellant in so far as the remaining 26 products are concerned. He submits that presuming though denying that the test reports of CRCL are correct, the same can be made the basis for classifying only those products to which the test report relates. The same cannot be made applicable to the other items for which no samples were either drawn or if samples were drawn, there is no test report. For this proposition he relied upon the Tribunal's decision in the case of S.D. Kemexc Indus. v. CCE - 1995 (75) E.L.T. 377. In the said decision assessee was manufacturing 22 different....
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....ng emamels, lacquers and distempers), prepared water pigments of a kind used for finishing leather. 9. A comparative reading of the above entries supports the appellants' contention that the goods were being classified by them under Erstwhile Tariff Item 14 because the same specifically cover the Bitumen and coal tar blacks. Under the new tariff Bituminous mixtures came to be classified under Heading 27.15 and there was no mention of the same under Heading 32.10. We agree with the ld. Counsel that there is no estoppel under the law and their claim for classification under Heading 27.15 cannot be rejected on the ground that under the Erstwhile Tariff the goods were being classified under item relatable to paints, varnishes etc. especially when the entire tariff structure has been changed and the classification under the new Tariff Act is required to be made in the light of interpretative rules, chapter notes and section notes with guidance from explanatory notes in Harmonised commodity description and coding system. In this matter the appellant has referred to a number of decisions. It is seen that there is no dispute about the said legal position that in the matter of clas....
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....d there can be Bituminous varnishes based on Bituminous/asphalt ingredients. But such paints and varnishes based on Bituminous ingredients have to be first paints and varnishes which are essentially based on resins. 14. Now the question arises as to whether the test report of CRCL (New Delhi) can be pressed into service for supporting the Revenue's contention. The goods were first chemically examined by the departmental chemical examiner, Calcutta according to which the samples were black coloured free flowing liquid compound of Bitumen in solvents. Admittedly no other constituent, whatsoever, was found by the examiner in the said samples. The said report in fact favoured the appellants inasmuch as the goods consisting of only Bitumen and solvents and nothing but Bitumen, are classifiable under heading 27.15. As for the report of CRCL is concerned, the appellants have challenged the same on various grounds and have questioned the correctness and authenticity of the same. In their written submissions filed during the course of hearing the appellants have submitted as under in respect of the said report of the CRCL :- "(i) The said samples were sent to CRCL on 8.12.....
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....quired to give the composition of the goods and it was beyond its jurisdiction of authority to comment on the classification thereof. The wholly arbitrary nature of the said purported report given by CRCL would also be evident inter alia from this that CRCL has not even given the composition of the goods as found by it which is primary job of any testing authority. (v) In support of the aforesaid submissions the appellant relies on the following decisions:" 15. After going through the above points raised by the appellants we fully agree with them. There was no mention of presence of any epoxy resin in the first report of the chemical examiner. The appellants' production records also do not show that any resin has been used by them. This was also not the case of the Revenue in the show cause notice. The appellants' request for giving composition of the goods was also turned down. In these circumstances there remains no doubt that such a report given by CRCL after a period of one year and three months of drawing of the sample cannot be given much evidenciary value, especially when the same is contrary to the earlier report and the other entire facts on record. If th....
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....samples tested. Since in the present case tests of all the goods were not carried out, the claim of the classification of the department is applicable only in respect of goods contained in the containers from which the samples were drawn and not for the other containers and we hold so. 4.5 As regard enhancement of the valuation, we find that the enhancement was made merely on the consent letters given by the directors of the appellant. In our view on hear say from director valuation cannot be decided if there is any doubt on the valuation, the due process of law as contemplated under Section 14 of the Customs Act read with Customs (Determination of Value of imported value) Rules, 2017 must be complied with. However, in the present case neither any contemporaneous value was adopted nor any method as prescribed under Section 14 read with Custom Valuation Rules, 2007 was followed. Therefore, merely on the basis of statements of director valuation cannot be enhanced. Therefore, the enhancement of the value is not sustainable in the facts of the present case. This issue has been considered in the case of Guru Rajendra Metal Alloy wherein the tribunal held that only on the basis of th....
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....plied to him by the supplier based at UAE. Further no document has been produced by Revenue on record to show the involvement of appellant in any way in the said misdeclaration. Further, I find that in the present case the appellant has not claimed any preferential rate of duty. After examining the provisions of Section 111(d) and 111(m), I find that both the provisions are not applicable in the fact and circumstances of this case. Further, I find that no mala fides has been brought on record on the part of appellant so as to impose penalties on the appellant under Section 112(a) and Section 114AA of the Customs Act, 1962. Further, I find that in the case of Oriental Containers Limited v. Union of India (cited supra), the Hon'ble High Court of Bombay in para 9 has observed as under : "9. Having heard the Counsel on both the sides, we are of the opinion that in the present case, it is admitted by the Customs authorities that the petitioners are not party to the fraud and there was no mala fide intention on the part of the petitioners in importing the Tin Plate/Waste instead of Tin Plate Prime. In fact, the petitioners have paid to the foreign supplier the price of tin plate....