2011 (8) TMI 940 - AT - Customs

Goods Exported - Composition of Stainless Steel, Chromium 26% and Nickel 8.7% as per specification for grade ER 312 the required percentage in chromium 28-32% and Nickel 8 to 10.5% - Show Cause issued - Product did not conform to the specification claim for export thus DEEC Scheme denied and also to impose penalty under Section 114 - Held That - It is on record that the Deputy Chief Chemist s laboratory did not have the facilities for determination of the various constituents of the export product. The lower appellate authority s finding that the test report is incomplete and hence cannot be relied upon cannot be faulted. In previous exports the products being of specification was agreed by department therefore respondent has to be given the benefit of doubt. Departmental appeal dismissed.

Summary

Issues:
Departmental appeal against rejection of export under DEEC Scheme due to non-compliance with product specifications.

Analysis:
The case involved an appeal against the rejection of an export under the DEEC Scheme due to non-compliance with product specifications. The respondent exported Stainless Steel Wires under advance license but faced rejection as the chromium content was found to be 26%, below the required range for grade AWS ER 312. The Commissioner (Appeals) initially set aside the rejection for lack of due process but later, after a show cause notice, upheld the rejection. The adjudicating authority confirmed the rejection, leading to another appeal. The appellate authority found the test report incomplete and highlighted previous instances where the same party's exports were accepted under the same grade. The respondent argued that the wire rods used for manufacturing the wires had the correct composition, and the incomplete test report should not be the sole basis for rejection. The appellate tribunal agreed, considering the evidence of previous exports and the incomplete test report, granting the respondent the benefit of doubt and dismissing the department's appeal.

The main issue revolved around the compliance of the exported Stainless Steel Wires with the grade ER 312 specifications under the DEEC Scheme. The department argued that the chromium content of 26% did not meet the required range of 28-32% for the grade, justifying the rejection. However, the respondent contended that the wire rods used for manufacturing the wires were of the correct grade, supported by import details and previous acceptance of similar exports. The incomplete test report and lack of facilities for comprehensive analysis were crucial in the appellate authority's decision to grant the benefit of doubt to the respondent.

The case highlighted the importance of complete and accurate testing reports in determining compliance with product specifications under export schemes. The respondent's argument, backed by import records and previous acceptance of similar exports, emphasized the need for consistency and fairness in evaluating compliance. The tribunal's decision to consider the incomplete test report alongside the historical acceptance of the respondent's exports demonstrated a balanced approach to resolving the dispute. Ultimately, the benefit of doubt was granted to the respondent based on the evidence presented, leading to the dismissal of the department's appeal.