2012 (4) TMI 313 - HC - Customs

Import of two consignments of non-alloy steel slabs - The petitioner sought for clearance of the goods, availing the benefits of the Customs Notification No.21/2002, Sl.No.190B one consignment was detained and samples were drawn - the petitioner sought for drawal of fresh samples for the purpose of re-test, by a reputed International Agency as per the notification dated 21.5.1955 - test report was in favour - communication by Assistant Commissioner of Customs, the second to carry out a further test, in respect of the 25% of the cargo detained by the authorities of the Customs Department Held that - the second respondent does not have the authority or power to order re-testing of the cargo detained by the authorities of the Customs Department, based on the reason that the report of the earlier test done, in respect of the said goods, is in favour of the petitioner - not be open to order re-testing after a lapse of a number of years in favour of assessee.

Summary

Issues:
1. Clearance of imported goods under concessional rate of duty.
2. Dispute regarding testing and re-testing of imported goods.
3. Authority of Customs Department to order re-testing of detained goods.
4. Completion of adjudication process by Customs Department.

Analysis:

Issue 1: Clearance of imported goods under concessional rate of duty
The petitioner imported non-alloy steel slabs and sought clearance under a concessional rate of basic customs duty. While one consignment was cleared, the other was detained for examination and testing. The petitioner filed a writ petition seeking permission for re-testing of the detained goods.

Issue 2: Dispute regarding testing and re-testing of imported goods
The National Metallurgical Laboratory conducted the initial testing, concluding that the goods were non-alloy steel/slab-seconds. The petitioner disputed this conclusion and requested re-testing by an international agency, which was initially rejected. Various legal proceedings ensued, including writ petitions, appeals, and special leave petitions before the Supreme Court.

Issue 3: Authority of Customs Department to order re-testing of detained goods
The Customs Department ordered further testing of a portion of the detained cargo despite a favorable test report in favor of the petitioner. The petitioner contended that the Customs Department lacked the authority to order re-testing, especially after the lapse of several years and exposure to weather conditions.

Issue 4: Completion of adjudication process by Customs Department
The Customs Department had not completed the original adjudication process even after receiving a test report. The Commissioner of Customs decided on a third test based on a contradictory report from a different testing agency. The court found the decision for re-testing inappropriate and directed the Commissioner to complete the adjudication process based on the earlier test report within twelve weeks.

In conclusion, the court held that the Customs Department's decision for re-testing was unsustainable in law, especially after previous testing and legal proceedings. The court directed the completion of the adjudication process based on the earlier test report and ordered the Commissioner to pass appropriate orders expeditiously.