TaxTMI 
TaxTMI 
2024 (9) TMI 1933
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....lomite Blocks and declared under classification 25181000 claiming exemption Notification No. 50/2017-CUS dated 30.06.2017 (Sr. No. 120) from basic custom duty and Notification No. 01/2017 Integrated Tax Rate dated 28.06.2017 from IGST. An intelligence was gathered by the officers of revenue intelligence zonal unit, Ahmedabad (hereinafter referred as DRI) indicated that M/s. NITCO was importing Rough Marble blocks classified under Custom Tariff Heading No. 2515 by mis-declaring rough dolomite block/ dolomite block and mis- classifying the same under Custom Tariff Heading No.25181000 and availing the exemption from payment of BCD and IGST. Intelligence gathered further stated that the goods rough dolomite block were actually rough marble block and the same should be classified under Custom Tariff Heading No. 25151210. Thus, the mis-declaration of the description and the classification is being done with intention to evade the payment of higher rate of custom duty including IGST applicable on Custom Tariff Heading No. 25151210 in comparison to Custom Tariff Heading No. 25181000. 1.2 Based on the above intelligence, a search was carried out at the factory premises of NITCO Ltd at Si....
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....e issued to the assessee which detailed below:- (1) Show Cause Notice F.No. VIII/10-28/Commr./O&A/2021-22 dated 08.08.2022 issued by the Commissioner of Customs, Ahmedabad demanding the differential Customs Duty amounting to Rs. 1,29,15,992/- (covering 5 Bills of Entry) in respect of the imports at Adani Hazira port (INHZA1), Hazira, Strat and ICD Tumb(INSAJ6), Taluka- Umbergaon, Dist- Valsad, Gujarat. The details of the Bills of Entry involved in the said Show Cause Notice are as under: Sr. No. Bills of Entry No. & Date No. & Date Value of Goods of Imported (Rs.) Duty Paid (Rs.) Actual duty to be Paid (Rs.) Duty Short paid/to be recovered (Rs.) Ports/ ICDs of imports 1 2 3 4 5 6 7 1. 3103627 dated 04.09.2017 23,24,493 2,41,922 13,51,533 11,09,632 Adani Hazira Port (INHZA 1) 2. 3103627 dated 04.09.2017 51,85,821 5,39,714 30,15,244 24,75,530 3. 3103656 dated 04.09.2017 28,09,258 2,92,374 16,33,415 13,41,042 4. 3269532 dated 16.09.2017 88,89,574 9,25,182 51,68,754 42,43,572 5. 5616596 dated 09.11.2019 74,17,517 7,99,237 45,45,454 37,46,217 ....
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....ropped and demand of Rs. 42,43,572 was confirmed and corresponding fine, penalty and interest was also confirmed. Being aggrieved by the Order-In-Original dated 25.01.2023, the revenue filed an appeal for the dropped demand amounting to Rs. 2,03,52,753/- and corresponding penalty, confiscation etc. Against the common impugned order the assessee also filed an appeal against the confirmation of demand amounting to Rs. 42,43,572/- with corresponding interest, penalty and fine and other co-noticees also filed appeals challenging the imposition of penalties. 2. Shri Narendra Kumar Pati, Learned Chartered Accountant with Shri Girish Nadkarni, Advocate appearing on behalf of the assessee in the appeals filed by the assessee submits as under:- "The appellants, dissatisfied with the order, have filed this appeal, contesting the decision on various grounds and seeking reconsideration of the issues addressed by the adjudicating authority. 1. Impugned Order's Lack of Legal Standing: The appellant argues that the impugned order is illegal and unsustainable as it was passed without proper application of mind, using inconsistent standards for adjudicating the sam....
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....t contends that the department's reliance on general descriptions from the supplier's website, while ignoring detailed mineralogical composition data, is legally unsound. Further, the e- commerce website www.stoneconnect.com has been relied on establish Volakas Marble is a marble quarried in Greece and to therefore conclude that the goods imported by the Appellant are nothing but marble. Further it is settled position in law that information from websites cannot be relied as authentic source of information and thus do not support the case of notice, in any manner. 6. Misinterpretation of Emails: The appellant argues that the department misinterpreted emails from Mr. Ujwal Phadtare, twisting the context to support their case. The emails merely clarified the correct customs classification for dolomite, not a misdeclaration of goods. The email has not communicated that the documents be amended for the purpose mis-declaration and that Marble be replaced with Dolomite. It merely states that the correct CTH for Dolomite was 25181000 or 25182000. Drawing adverse inferences for the said email is uncalled for and is not sustainable. 7. Reliance on Statemen....
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....ted emails from Mr. Ujwal Phadtare, twisting the context to support their case. The emails merely clarified the correct customs classification for dolomite, not a misdeclaration of goods. It is further stated that a conclusion cannot be drawn merely from the subject of the email and the contents of the said email needs to be read along with the context of the same. The email has not communicated that the documents be amended for the purpose mis- declaration and that Marble be replaced with Dolomite. It merely states that the correct CTH for Dolomite was 25181000 or 25182000. Drawing adverse inferences for the said email is uncalled for and is not sustainable. 3. The Test Report of the sample drawn from the goods of the concerned BOE are conclusive in nature: The Test Report of the sample drawn from the goods of the concerned BOE were analysed by three distinct and independent government laboratory (Dy. C.C. Laboratory, JNCH, Nhava Sheva, CRCL, Vadodara and Geological Survey of India, Nagpur). The Test Reports from all the three labs conclusively stated that the goods were 'Dolomite Block' and not 'Dolomitic Marble'. It is further stated that the Appellant Authorit....
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....nt he dropped the demand is not correct and legal, the same needs to be set aside and Revenue's appeal be allowed. 4.1 We have carefully considered the submission made by both sides and perused the records. We find that the core issue present in both appeals to be decided is that whether the goods imported by the assessee is Rough Dolomite Blocks, classifiable under Custom Tariff Heading No. 25181000 as declared by the assessee or classifiable under Custom Tariff Heading No. 25151210 as claimed by the Department. To ascertain the legality of the order passed by the Adjudicating Authority, it is necessary to read the finding of the Adjudicating Authority. In respect of the duty demand dropped by the Adjudicating Authority, the following finding is given in the impugned order :- 4.2 From the above detailed finding which is based on test reports of the department's own Central Excise and Customs Laboratory, Vadodara as well as independent Central Government Organization namely Geological Survey of India the Adjudicating Authority has decided that in respect of the goods imported by the assessee against 8 bills of entry out of 9 bills of entry is Rough Dolomite Blocks classif....
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....r arguinent that the product imported under this Bill of Entry was 'Dolomite' only. In the case of the Eight Bills of Entry, Test Reports of various Government Laboratories viz. Dy C.C Laboratory, JNCH, Nhava Sheva, CRCL, Vadodara and Geological Survey of India, Nagpur are on record and these Technical/Expert Reports overrule the contentions raised in the Show Cause Notices, as discussed at para supra. In absence of any Test result issued by a Government Laboratory with regard to the samples of the goods imported vide Bill of Entry No. 3269532 dated 16.09.2017, I have no option other than to agree with the proposal of the Show Cause Notice dated 08.08.2022 in respect of the goods imported vide the said Bill of Entry. 35.1 In view of the discussions in paras supra and the evidences on record, I am left with no option but to conclude that the goods imported by the Importer M/s. NITCO ltd. vide Bills of Entry covered in the two Show Cause Netices, except the Bill of Entry No. 3269532 dated 16.09.2017, are nothing but 'Dolomite Blocks' classifiable under Customs Tariff Heading No.25181000 and liable to applicable Customs Duty as per the said Customs Tariff Head....
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....er of the importation done under only one Bill of Er ty i.e. No. 3269532 dated 16.09.2017." 4.5 From the above finding, it can be seen that the demand in respect of the bill of entry dated 16.09.2017 which is subject matter of the Assessee's appeal was confirmed only on the ground that the assessee could not produce the test report. From the facts it is clear that for the goods of the bill of entry no. 3269532 dated 16.09.2017 also sample was drawn and a test was conducted but since the test report was not available with the assessee, they could not produce the same. It is the case of the revenue that the goods declared by the assessee is not correct. Therefore, the onus is on the department to bring on record tthetest report or other evidence, if available in the matter of classification. In this case only because the test report is not available with the assessee, burden to prove the correct classification cannot be shifted from department to assessee . It is settled law that burden to prove the classification as claimed by the revenue is on the revenue and not on the assessee. Moreover, in the facts of the present case when out of 9 consignment in respect of 8 consignments wh....
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....dia (1980) Cen-Cus 242D. This elementary and salutary rule of law has, in this case, been entirely ignored by the department. b) In the case of Heveacrumb Rubber (P) Ltd. Vs. Superintendent of Central Excise- 1983 (14) ELT 1685 the Hon'ble Kerala High Court has given the following view:- "3. It is interesting to note, that in the counter-affidavit filed by the respondents in paragraph 2, it is asserted that the products of the petitioner's factory are liable for Central Excise duty under Tariff Item 68. But in paragraph 3, it is stated that there is no adverse order passed by the respondents against the petitioner and in paragraph 7 it is repeated that Exts. P3 and P5 are still pending for consideration. This has to be taken along with the assertion made in Ext. P2 by the 1st respondent wherein it is stated in paragraph 2 that block or crump rubber produced in the petitioner's factory is liable for Central Excise duty under Tariff Item 68 of the Central Excise Tariff. The petitioner has filed detailed objections, evidenced by Exts. P3 and P5. In Ext. P3 the petitioner has also relied upon the decision of the Appellate Collector who has gone through the matter very....
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....ive of the principles of natural justice. The assessing authority will be acting arbitrarily and not fairly. That the statutory authorities invested with power, which when exercised will effect persons with civil consequences, should act fairly, reasonably and in just manner, has been laid down repeatedly by courts. But it is regretable that such principles are given a go-bye in many cases and parties are driven to resort to this court under Article 226 of the Constitution. Notwithstanding the very detailed objections the respondents have not cared to dispose of Exts. P3 and P5, but continued to insist that the petitioner should furnish certain details asked for. The procedure adopted is unwarranted." c) In the case of Tata Exports Ltd. Vs. Union of India and Ors.-1985 (22) ELT 732, the Hon'ble High Court of Madhya Pradesh have given the following finding:- "4. The Supreme Court in Union of India v. Delhi Cloth Mills - 1977 E.L.T (J 199) (S.C.) = AIR 1963 S.C. 791 has held that manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and....
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....s given the following view:- "7. The Department has referred to the Fertilizer Control Order as well as the Glossary of Terms used in Fertilizer Trade and Industry (IS 1304-1980). But this has been an exercise in futility as reference to both these authorities only establishes that ammonium chloride of high technical purity as well as lower purity is fully covered in the broad specifications applicable to fertilizers. In this situation, the burden of proof that the product in question, is not a fertilizer is on the Department and they have failed to discharge this burden. In view of the definitions contained in the Fertilizer Control Order, Glossary of Terms used in the Fertilizer Trade and Industry as well as the specific wording of Notification No. 164/69, there is hardly any justification for going into the end use of the product in question. We cannot also lightly brush aside the argument that if at all there was any doubt as regards the alternative classification, then as per accepted principles, a specific tariff entry is to be preferred to the general entry and also the view favourable to the assessee will have to be accepted. We are also quite clear that the allega....