TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 144
X X X X Extracts X X X X
X X X X Extracts X X X X
....0,436/-, adjusted the duty amount of Rs.1,57,737/- paid and imposed a penalty of Rs.1,24,000/- under Section 112(a)(iii) of the Customs Act, 1962 for mis-declaring the description of the goods with an intention to avail exemption under Customs Notification No. 12/2012 dated 17.03.2012 (S.No. 117). 2. The facts of the case are the Appellants had imported 106 Tons (2680 bags) of "Black Sand" from Siera Leone (West Africa) vide Bill of Entry No. 8531780 dated 20.11.2012 and have classified the same under Customs Tariff Heading (CTH) 26140090. The Appellant sought to avail the benefit of concessional rate of Basic customs duty @2.50% in terms of Sl.No. 117 of Notification No. 12/2012 Customs dated 17.03.2012. 3. A representative sample was drawn and sent to Regional Ore Dressing Laboratory, Bengaluru (the lab) for the purpose of testing and vide report No. k-26011/5/2012/BNG-ODL dated 26.12.2012, the lab stated that the sample mainly consists of Quartz and Rutile with minor amounts of limonite/goethite, leucoxene, staurolite, tourmaline, Zircon and amphibole. The test report is extracted below for ready reference: - Mineral Percentage Quartz 55-60 Rutile 25 - 30 Limonite / goe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Rutile (25% to 30%) which is undisputedly ore for Titanium. iii. That the reliance on the report for treating the major content as quartz and thereby reclassifying the product as Quartz sand is incorrect. iv. That the rejection of value on the basis of contemporary imports is without any logic as the comparison lacks clarity as to the quantity of import, country of import, whether under a contract, etc. 6. After the due process of adjudication, the Original Adjudicating Authority has confirmed the allegations made in the Show Cause Notice on the following grounds: - i. That the Regional Dressing Ore Laboratory is well equipped with sophisticated equipment for providing region wise facilitation for carrying out R&D studies in the field of mineral beneficiation and mineral characterization and analysis of environmental studies. ii. The report provides that predominant element available is Quartz and rutile bearing is only 25-30%. Further, no evidence has been provided to substantiate that titanium ore can be extracted from the said material. iii. Further, for the purpose of classification, weight and usage of the predominant element needs to be duly considered, which i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....23 (10) TMI 364] wherein it was held that in case of undervaluation where there are no supporting documents/evidence then the benefit of doubt must go to the importer. The said decision has been followed by Chennai CESTAT in the following decisions: - i. M/s. Rajendra Textiles [2023 (8) TMI 265] ii. M/s. New Era Traders [2024 (1) TMI 1087] iii. M/s. Albany Molecular Research Hyderabad Research Centre [2024 (10) TMI 465] vii. Since there is no misclassification, confiscation and penalty are not imposable and prayed for setting aside the impugned order. 9. Per Contra, the Ld. Authorized Representative Ms. O.M. Reena appearing for the Revenue, re-iterated the findings in the order in appeal and submitted the appeal is liable to be rejected. 10. Heard both sides and considered the rival submissions including the evidence available on appeal records and the case laws relied upon. 11. The issues that arise for consideration are: - i. Whether the classification of the Black sand imported merits classification under CTH 2614 0090 as claimed by the Appellant or merits classification as Quartz Sand under CTH 2505 1020 as determined by the Department? and, ii. Whether the Origi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Gold bearing or Platinum bearing sands, Zincone sands, Rutile sands etc., are classified under Chapter 26. The relevant extract of the same is reproduced below: - "On the other hand, this heading does not include gold-bearing or platinum-bearing sands, zircon sands, rutile sands and ilmenite sands, nor monazite sands (monazite!) which are classified as thorium ores; all these fall in Chapter 26. Nor does the heading cover tar sands or "asphaltic sands" (heading 27.14)" 16. The significance and weightage enjoyed by HSN Notes was expounded by the Hon'ble Supreme Court in the case of Wood Craft Products Ltd (1995 (77) ELT 23] as follows: - "12. It is significant, as expressly stated, in the Statement of Objects and Reasons, that the Central Excise Tariffs are based on the HSN and the internationally accepted nomenclature was taken into account to 'reduce disputes on account of tariff classification'. Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN. This being the expressly acknowledged basis of the structure of Central Excise Tariff in the Act and the tariff class....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Quartz Sand imported @834 USD FOB per Metric Ton in respect of the Bill of Entry No. 8044762 dated 25.09.2012. The details of the import by whom from where and in what quantity have not been communicated to the importer thus violating the principles of natural justice. The Appellant has submitted that the enhancement of value based on one contemporaneous import cannot be accepted owing to lack of supporting documents. He submitted that the Department has failed to produce any documentary evidence to the effect that same/similar goods were imported as relied upon Bill of Entry and there were no means to verify the Country of Origin, commercial quantity, etc. In this connection, the Ld. Advocate placed his reliance on Ganpati Overseas [2023 (10) TMI 364 - SUPREME COURT] wherein it was held by the Hon'ble Apex Court that in cases where the charge of undervaluation cannot be supported by Department either by evidence or information about comparable imports, the benefit of doubt must go to the importer. Therefore, the onus lies on the Department to prove that identical imports of "Black Sand" have been done at higher rates with documentary evidence. In the absence of any such do....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder of Commissioner (Appeals), in respect of the valuation aspect. We find that the Commissioner (Appeals) has rightly applied the precedent decisions to the facts of the case and has rightly rejected the Revenue's stand on the assessable value of the goods. Accordingly, we reject the appeal filed by the Revenue". (ii) In Commissioner of Customs, New Delhi vs. Marble Art [2013 (289) E.L.T. 346 (Tri. - Del.)] it was held as given below: - "3. On going through the order of Commissioner (Appeals), we find that he has set aside the order of the original adjudicating authority enhancing the value of the imported rough marble blocks from different countries. The said enhancement was done by the Assistant Commissioner on bill of entry itself. The appellate authority had observed that no reasons stands given by the Assistant Commissioner for enhancing the value and no reasons stand given by him for rejection of the transaction value as such, by following the Tribunal's decision in the case of M/s. Prasad Enterprises, Order Nos. 1329-36/04-NB dated 21-11-2004 also by following the Supreme Court decision in the case of Eicher Tractors, 2004 (41) RLT 621 = 2000 (122) E.L.T. 321 (S.C.), h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the value of contemporaneous imports were higher, but on the other hand he refers to various factors like numerable types of descriptions, grades, country of origin, place of exportation and importation, etc., which would apply in equal force in respect of the value of the imported goods as well. 7.4 The quantity of import is much higher than the quantity of import in respect of the contemporaneous imports. Hence, so-called contemporaneous imports were in fact in comparables, due to which the rejection of the value of import as declared by the appellant is without any basis. 8. In view of the above, we are satisfied that the re-determination of the import value by the Revenue is without any basis and certainly not in accordance with the spirits of law, for which reasons the same deserves to be set aside." 7.2 A similar view was also expressed by this Bench in the case of M/s. Shah B Impex v. Commissioner of Customs (Imports), Chennai [Final Order No. 40917 of 2023 dated 12.10.2023 in Customs Appeal No. 40823 of 2014 - CESTAT, Chennai], the relevant portion of which is reproduced below: - "4.1 We have perused the table reproduced by the original authority at paragraph 6 of h....