2026 (3) TMI 517

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....and had imported Hard Coking Coal of Australian origin through Karaikal Port under six Bills of Entry during the period 30.08.2011 to 28.03.2012. The goods were declared as "Coking Coal" under CTH 2701 19 10 and exemption from Basic Customs Duty was claimed under Sl. No. 68 of Notification No. 21/2002Cus as amended. The goods were provisionally assessed under Section 18 pending test reports. 1.3 Samples were drawn and sent to the Chemical Examiner, Custom House, Chennai. The Chemical Examiner reported Crucible Swelling Number (CSN) above 1 in all cases but did not report Mean Reflectance (MR) for want of facility. The Assistant Commissioner finalized the provisional assessments accepting the classification as Coking Coal and extended exemption based on CSN reported by Customs Laboratory and MR as per load port surveyor's certificate. 1.4 Thereafter, the Commissioner issued Show Cause Notice dated 13.06.2013 proposing denial of exemption for all six Bills of Entry primarily on the ground that MR had not been ascertained from Customs laboratory and that CSN values as per load port reports were not reliable. Subsequently, remnant samples were sent to CIMFR, Dhanbad, which report....

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....LT 285 (SC). 5.1 Per Contra, the Ld. Authorized Representative submitted that exemption notification prescribes strict compliance of twin conditions of MR above 0.60 and CSN above 1. The Chemical Examiner had not reported MR. Therefore, finalization of assessment without ascertaining MR from authorized laboratory was improper. 5.2 It was contended that CIMFR is a premier government laboratory and its report shows CSN of 0.5, which is below the prescribed limit. Therefore, the goods do not qualify as Coking Coal. The respondent supports the findings recorded in paragraphs 18 to 23 of the impugned order and submitted that exemption being conditional must be strictly construed. 5.3 It was further contended that Section 28 proceedings are maintainable even after finalization of provisional assessment in cases of short levy, and reliance was placed upon the reasoning recorded in paragraph 24 of the impugned order. 6. We have carefully heard the submissions advanced by both sides, examined the appeal records in detail, and the case Laws cited. 7. Upon consideration, the following issues arise for determination: - i. Whether the impugned order travelled beyond the ....

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....d upon the judgments of the Hon'ble Supreme Court in CCE v. Ballarpur Industries Ltd. 2007 (215) ELT 489 (SC), CC v. Toyo Engineering India Ltd. 2006 (201) ELT 513 (SC), and Caprihans India Ltd. v. CCE 2015 (325) ELT 632 (SC), to contend that adjudication cannot travel beyond the show cause notice. We note that these authorities unequivocally lay down that the notice is the foundation of the proceedings and that no new ground can be introduced at the stage of adjudication. 8.7 We observe that the Department contended that the CIMFR reports were furnished during the adjudication and that the Appellant was given an opportunity to rebut the same. We find that this submission does not cure the fundamental defect because the infirmity here is jurisdictional in nature and not merely procedural. We note that the adjudicating authority cannot retrospectively expand or substitute the foundation of the Show Cause Notice. The mere supply of documents during adjudication cannot substitute a proper allegation in the Show Cause Notice. 8.8 We further observe that the original basis in the Show Cause Notice, namely reliance on the text "Coal Geology" for CSN 8+, has been expressly rejected ....

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....l of samples. We observe that the Appellant has relied upon technical literature explaining that coal is hygroscopic and that oxidation and weathering may result in deterioration of caking properties over time. 9.5 We note that the Appellant has relied upon the judgment of the Hon'ble Supreme Court in Dunlop India Ltd. v. Union of India 1983 (13) ELT 1566 (SC), wherein it was held that classification must be determined based on the condition of goods at the time of import. 9.6 We observe that the Appellant has further relied upon the decisions of this Tribunal in Ruchi Soya Industries 2006 (193) ELT 499 (Tri.-Bang.) and Godrej Industries Ltd. 2017 (357) ELT 899 (Tri.) to contend that belated testing which may be affected by passage of time cannot override contemporaneous evidence. 9.7 We find that the CIMFR testing was conducted more than two years after the samples were drawn. We observe that the impugned order does not record any finding regarding storage conditions of remnant samples during this prolonged period. We note that there is no material on record to show that the samples were preserved in conditions preventing oxidation. 9.8 We observe that the Chemical Exa....