2008 (10) TMI 445 - AT - Central Excise

DEEC licence - Marble - Import of marble - Board Circular No. 40/2002-Cus. dated 11-7-02 - Held that - Having sent the sample to CRCL and having received the report which is in conflict with the report of Geological Survey of India, the refusal to permit retesting and refusal of cross-examination are not justified - appeal allowed.

Summary

Issues:
1. Conflict between test reports from CRCL and Geological Survey of India regarding the nature of imported goods.
2. Preference of test report from Geological Survey of India over CRCL's report.
3. Interpretation of relevant legal provisions and circulars in determining the nature of imported goods.
4. Justification for allowing retesting and cross-examination in case of conflicting test reports.
5. Application of legal principles regarding the formation of marble from limestone.
6. Timeliness of issuing clarifications by the Board in relation to the import.

Analysis:
1. The case involved a dispute over the classification of imported goods as marble under Chapter 25.15 based on conflicting test reports. CRCL identified the goods as marble, while the Geological Survey of India classified them as a variety of limestone, leading to a demand for duty, confiscation, and penalties by the original authority, upheld by the Commissioner (Appeals).

2. The Department argued for the preference of Geological Survey of India's report over CRCL's based on the agency's specialization in geology and a circular suggesting sending samples specifically to Geological Survey of India for testing. Reference was made to a Supreme Court decision emphasizing the importance of microscopic examination to determine if a product is marble.

3. The Tribunal analyzed the chemical composition of marble and limestone, highlighting their similarity and the formation of marble through metamorphism of limestone. The judgment in Akbar Badruddin Jiwani's case supported this view, emphasizing the need for microscopic examination. The Tribunal noted that the CRCL report confirmed the physical characteristics of marble, raising questions about the refusal for retesting and cross-examination.

4. The Tribunal found the refusal to permit retesting unjustified, especially considering the conflicting reports and the lack of opportunity for cross-examination. Additionally, the import occurred before the Board's clarification in 2002, which favored Geological Survey of India's reports, further complicating the interpretation of relevant legal provisions and circulars.

5. In light of the circumstances, the Tribunal concluded that the appellant presented a valid case for interference. Accordingly, the orders of the Commissioner (Appeals) were set aside, and the appeals were allowed with consequential relief, highlighting the importance of considering all relevant factors in determining the nature of imported goods and resolving disputes arising from conflicting test reports.