2011 (7) TMI 140 - AT - Customs

Concessional rate of duty / exemption from payment of duty - the burden lies upon the importers to establish their entitlement to the benefit under the relevant notifications - Failure to extend cross-examination of officers of M/s.Kreglinger (Australia) Pvt. Ltd. and the persons who had issued the test reports produced by the importers before the Indian Customs and Mr.Jackson will therefore not vitiate the proceedings as the department has been able to prove that the test reports covering 25 consignments (past clearances) produced by the importers were fake and the mean fiber diameter of the wool was below 32 microns - Hence reject the contention of the importers that the demand on the past clearances is not sustainable as those goods had been provisionally assessed on execution of test bond which would clearly indicate that the samples were available for testing but had not been tested - Held that - hold that the importers have not substantiated their claim to the benefit of Notification No.20/99 and the benefit of Notification No.22/99 is also not available as the imported goods are not sold as such but further processed in the scouring unit of the importer s factory. Confiscation duty demand and penalties are therefore justified - Decided against the assessee.

Summary

Issues:
1. Misdeclaration of goods and wrongful claim of concessional rate of duty and exemption from SAD.
2. Authenticity of test certificates and mean fiber diameter of imported wool.
3. Confiscation of goods, duty demands, and penalties imposed by the Commissioner of Customs.
4. Burden of proof on importers to establish entitlement to benefit under relevant notifications.
5. Failure to cross-examine officers and authenticity of test reports.

Analysis:
1. The case involved importers filing Bills of Entry for Greasy Raw Wool with a mean fiber diameter of 34.0 microns, claiming concessional duty rates and exemption from SAD. However, investigations revealed discrepancies in the test certificates and actual mean fiber diameters of the imported wool, leading to a seizure of the consignment and issuance of a show cause notice proposing confiscation, duty demands, and penalties.

2. Further investigations uncovered past clearances where importers had availed benefits based on forged test certificates. The authenticity of the certificates was confirmed to be fabricated by the Australian Wool Testing Authority (AWTA). The importers were unable to provide substantial evidence to refute the findings, resulting in a show cause notice for multiple Bills of Entry.

3. The Commissioner of Customs adjudicated the case, upholding the proposals for confiscation, duty demands, and penalties. The importers appealed the decision, contesting the findings and penalties imposed. The tribunal reviewed the evidence, including test reports, statements, and clarifications from AWTA, ultimately affirming the Commissioner's order.

4. The tribunal emphasized that the burden of proof lay with the importers to establish their entitlement to the benefits claimed under the relevant notifications. The failure to cross-examine relevant officers and the authenticity of test reports did not invalidate the proceedings, as the department successfully demonstrated the fraudulent nature of the test certificates.

5. Considering the lack of substantiated claims by the importers and the processing of imported goods in their factory's scouring unit, the tribunal upheld the confiscation, duty demands, and penalties imposed. The appeal was rejected, affirming the impugned order of the Commissioner of Customs based on the evidence and legal provisions presented in the case.