2006 (3) TMI 442 - AT - Customs

Summary

Issues:
- Denial of DEPB credit based on purity of exported goods under the DEPB Scheme.
- Violation of Principles of Natural Justice by the Commissioner (Appeals).
- Discrepancy in purity test results conducted by the Customs House Laboratory.
- Interpretation of the DEPB rate schedule regarding the purity requirement for "Acetic Acid Glacial."

Analysis:

1. Denial of DEPB Credit: The appeal was filed against the denial of DEPB credit to the appellants for exporting "Acetic Acid Glacial" due to discrepancies in the purity test results. The Customs House Chemical Laboratory initially reported the purity at around 85%, which later increased to 95.3%, falling short of the required 99.8% purity specified in the DEPB book. The lower authority upheld the denial, leading the appellants to seek relief from the Tribunal.

2. Violation of Principles of Natural Justice: The appellants contended that the Commissioner (Appeals) decided the case without granting a request for a postponement of the personal hearing, alleging a violation of the Principles of Natural Justice. However, the Tribunal did not delve into this issue in its final decision.

3. Discrepancy in Purity Test Results: The appellants argued that the significant variation in the purity test results conducted by the Customs House Laboratory raised doubts about the accuracy of the initial test. They highlighted that the purity discrepancy, coupled with the lapse of time between tests, suggested that the product's original purity of 99.8% might not have been accurately reflected in the second test.

4. Interpretation of DEPB Rate Schedule: The Tribunal analyzed the DEPB rate schedule for Product code No. 62 Sl. No. 750, which describes "Acetic Acid Glacial" without specifying any purity requirement. The appellants contended that since the DEPB book did not explicitly mention a purity level for this product, they should be eligible for DEPB credit without strict adherence to the purity aspect. The Tribunal agreed with this interpretation and found no justification for denying the credit based solely on the purity discrepancy.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of considering additional evidence, such as the Consignee's Certificate attesting to the product's purity, in cases where test results show significant variations.