2013 (12) TMI 1194 - AT - Customs

Classification of goods - Mis declaration of goods - Import of oil - Classification under heading 3402.9020 or heading 3403.9900 - Discrepancy in reports - Held that - reference by Commissioner (Appeals) to the earlier test report by Kanpur Research Centre which was in favour of the assessee, was not called for. The earlier order of Commissioner (Appeals) has accepted the discrepancies in the two reports, had remanded the matter to the original adjudicating authority, calling for a fresh retest report. The earlier order has not been challenged by the Revenue. As such, it was not permissible for Commissioner (Appeals) to refer the said fact - appellant is entitled to unconditional dispensation of duty and penalty and to stay recovery of the same till disposal of the appeal, inasmuch as retest report supports their claim - Stay granted.

Summary

Issues:
1. Dispensing with the condition of pre-deposit of duty and penalty.

Analysis:
The appellant sought dispensation of the pre-deposit condition of duty and penalty amounting to Rs. 1,00,476. The dispute arose from the classification of imported oil declared by the appellants as sulphonated fish oil under heading 3402.9020. However, conflicting test reports from CRCL and the Regional Centre for Extension and Development, Central Leather Institute, Kanpur, classified the goods as mineral oil and additives under heading 3403.9900 and sulphonated fish oil, respectively.

The original adjudicating authority initiated proceedings against the appellant, resulting in an order confirmed by the Commissioner (Appeals). The Commissioner set aside the original order and remanded the matter for a fresh report from CRCL due to contradictory test reports. A retest report from CRCL concluded that the goods were sulphonated fish oil (other than fish oil) but free from mineral oil, leading the Assistant Commissioner to drop the demand against the appellant.

The Revenue appealed the decision, arguing that the first CRCL report should prevail as the appellant's favorable report was not based on a sample drawn in the presence of Revenue officials. The Appellate Authority accepted the Revenue's contention, setting aside the Assistant Commissioner's order. However, the Tribunal found the Commissioner's reference to the earlier favorable report unnecessary, as the discrepancies were acknowledged, and a fresh report was already sought in the previous order, unchallenged by the Revenue.

Considering the retest report supporting the appellant's claim and the earlier order not challenged by the Revenue, the Tribunal held that the appellant was entitled to unconditional dispensation of duty and penalty. Consequently, the Tribunal allowed the stay petition, ordering the stay of recovery until the appeal's disposal.

In conclusion, the Tribunal granted the appellant's request for dispensation of the pre-deposit condition of duty and penalty, emphasizing the significance of the retest report supporting the appellant's classification of the imported oil as sulphonated fish oil.