TaxTMI 
TaxTMI 
2025 (9) TMI 144
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....Rs.5,07,136/- on enhanced value of Rs.54,20,436/-, 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 Percenta....
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....examination of the sample. ii. That the report confirms that imported item as natural sand and as Rutile bearing sand and thus confirms the presence 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 tha....
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....o the effect that the same/similar goods were imported and there were no means to verify the Country of origin, commercial quantity, etc. In this regard, reliance is placed on the ruling of Supreme Court in the case of Ganapati Overseas [2023 (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 f....
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....d according to the terms of the headings of the tariff and any relative Section notes or Chapter notes and thus, gives precedence to this while classifying a product. 14. Since the section notes or chapter notes do not explicitly provide for inclusion or exclusion, reference is made to HSN Explanatory Notes issued by World Customs Organization. 15. Under the specific heading 2505, it is clearly stated that the heading does not include Metal Bearing Sands. In terms of explanatory Notes to HSN, 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....
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....ered that the sample appears to be natural sand sample and is Rutile Bearing Sand. As such, the issue of classification of imported goods is decided in favour of the Appellant. 18. With regard to the second question, on perusal of records, we find that the Department has not provided sufficient justification for rejection of value. The issue is no longer res-integra and has been squarely covered by various judgments of Higher Judicial fora. The declared transaction value was rejected and the value was redetermined taking the basis 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 qua....
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....eas [2011 (274) ELT 546]: - "5.------ Further, the reliance on the NIDB data by the original adjudicating authority cannot be held to be in accordance with declaration of law and the Tribunal's decision in the case of M/s. Gaitri Export refers (supra) would be fully applicable to the facts of the case. Furthermore, we also find that there is no allegation, much less any allegation to the effect that any additional payments were made by the respondent to their foreign supplier. In the absence of the same and in view of our foregoing discussion, we find no infirmity in the order 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 ....
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....al, but however, that such reliance on the contemporaneous imports itself has been doubted by the adjudicating authority when he holds that the value of the imported goods could not be determined under Rule 4 and Rule 5 due to variable factors like numerable types of descriptions, grades, country of origin, etc.; Rules 7 and 8 also could not be applied for want of quantifiable data at the place of exportation and importation respectively. By this, the approach of the assessing officer in comparing the import value with that of the contemporaneous imports stood diluted. In other words, on the one hand the officer says that 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 i....