2013 (11) TMI 595 - AT - Customs

Custom duty on coking coal Assessee imported coal and filed 19 Bills for clearing what was declared in some of the bills of entry as coking coal and in some others as semi-soft coking coal - Claimed exemption from customs duty under Notification No. 21/2002-Cus., dated 1-3-2002 Serial.No.68 & 68A - coking coal was fully exempted from customs duty - Customs department demanded duty with view that the goods imported were not coking coal - Held that - The description that the supplier adopts for his goods in contract by itself cannot be conclusive in deciding applicability of a customs exemption especially when the scope of the description of the goods used in Customs Notification in India is not clear and gives room for an argument that the goods fits into the description. In the absence of a clear definition, we should go by natural meaning. The explanations in the notification prior to the period of import and later to the period of import provide certain technical characteristics and do not provide for monitoring that coal is to be used actually for conversion into coke before using it in metal extraction. During the period of import there was no explanation at all - We feel that adoption of a new technology enabling use of coal, which could be converted into coke in admixture with other coal, without conversion of such coal into coke cannot be a reason to deny the exemption - The Chemical Examiner does not state the criteria based on which he opined that the goods were not coking coal . In the absence of such details the Chemical Examiner s report is only an opinion and not a report of chemical analysis. An opinion formed by chemical examiner has very limited value because such opinion is formed without hearing the party - Following decision of COMMISSIONER OF CUSTOMS, TRICHY Versus JSW STEEL LTD. 2013 (1) TMI 301 - CESTAT, CHENNAI - Decided in favour of assessee.

Summary

Issues:
Waiver and stay sought for dues adjudged against JSW Steel Ltd. and its functionaries under Section 112 of the Act.

Analysis:
The main issue in this case involved the demand of customs duty and penalties imposed on JSW Steel Ltd. and its functionaries. The company imported goods declared as coking coal and semi-soft coking coal between March 2009 and March 2010, claiming exemption under Notification No. 21/2002-Cus. The adjudicating authority denied the benefit of the notification, alleging that the imported goods were not coking coal. The appellant challenged this decision on various grounds, including retrospective effect given to certain amendments in the notification, the actual use of imported materials, and the nature of the imported commodity. The appellant also highlighted favorable decisions in similar cases by other benches and argued that the demand of duty was beyond the normal period of limitation due to ongoing disputes with the customs authorities.

The Tribunal carefully considered the arguments presented by both sides. There was a contentious issue regarding the identity of the imported goods, with the adjudicating authority basing its decision on the 2011 amendments to the notification, trade parlance, and chemical examiner's reports. The Tribunal noted the debatable nature of the issue and referred to a previous Final Order by a co-ordinate bench that favored the importer's eligibility for exemption under the notification and rejected the retrospective effect of the 2011 amendments. The Tribunal also considered the plea of limitation, acknowledging the confusion surrounding the amendments and the ongoing dispute about the classification of coking coal during the import period. The Tribunal found merit in the appellant's arguments and granted waiver of pre-deposit and stay of recovery for the balance amount of duty and penalties imposed on the appellant-company and its functionaries.

In conclusion, the Tribunal granted the waiver and stay sought by JSW Steel Ltd. and its functionaries, considering the debatable nature of the issue regarding the imported goods' classification, the confusion caused by the amendments to the notification, and the ongoing dispute about the nature of the imported commodity. The Tribunal also took into account the amount already paid by the importer and enforced through a bank guarantee, ultimately ruling in favor of granting relief to the appellants.