2011 (3) TMI 977 - AT - Customs

Waiver of pre-deposite - Assessee where 1/4th of the product exported has been returned by the buyers and the ship was already on its way and was half the way of its voyage - Evidence is available to show that samples were drawn from the tanks after the product was loaded on to the ship and since the tests done in the refinery under the supervision of independent agency, had fulfilled the conditions, without waiting for the results of the sample test, the ship sailed and subsequently only when in respect of three tanks the test had failed, the product contained in those tanks has been re-imported - Therefore, prima-facie, it appears that appellant have made out a very strong case for waiver of pre-deposit.

Summary

Issues:
1. Classification of imported goods under CTSH 27101930 and exemption under notification No. 94/1996-Cus.
2. Failure to deposit entire amount of duty demanded leading to dismissal of appeal.
3. Discrepancy in flash point of imported goods and compliance with BIS standards for HSD classification.
4. Rejection of independent surveyor's report on samples drawn from ship's tanks.
5. Request for waiver of pre-deposit and stay during appeal proceedings.

Classification of Imported Goods and Exemption:
The case involved the appellant filing a bill of entry for re-import of High Speed Diesel (HSD) claiming classification under CTSH 27101930 and exemption under notification No. 94/1996-Cus. The appellant had earlier exported HSD but faced rejection due to quality issues upon arrival. The impugned order dismissed the appeal for failure to deposit the entire duty demanded.

Discrepancy in Flash Point and Compliance with Standards:
The advocate argued that the product did not meet HSD specifications based on the chemical examiner's report. The Commissioner's decision to treat the product as HSD despite a lower flash point was contested. The advocate highlighted the importance of BIS standards specifying a minimum flash point of 350C for HSD classification.

Rejection of Independent Surveyor's Report:
The rejection of the independent surveyor's report on samples drawn from the ship's tanks was challenged. The appellant argued that the product was re-imported due to non-compliance with standards, indicating a genuine problem of contamination. The discrepancy in treatment of reports from the refinery and the ship's tanks was emphasized.

Request for Waiver of Pre-Deposit and Stay:
The Tribunal considered the arguments presented and found merit in the appellant's case for waiver of pre-deposit and grant of stay during the appeal. The matter was remanded for fresh consideration on merits, with directions to the Commissioner (Appeals) to hear the case without insisting on pre-deposit. The Tribunal clarified that its observations were made solely to assess the prima facie case and did not express a final opinion on the issues involved.

This comprehensive analysis of the judgment addresses the classification of imported goods, compliance with standards, rejection of reports, and the request for waiver of pre-deposit and stay during appeal proceedings. The Tribunal's decision to remand the matter for further consideration highlights the complexity of the case and the need for a detailed review of the issues involved.