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2015 (1) TMI 366 - AT - CustomsWaiver of pre deposit - classification - imported coal containing a calorific value limit on moist more than 5833 Kcal/kg - Steam Coal or not - Benefit of exemption under Serial No.123 of Table appended to Notification No.12/2012-Cus. dt. 17.3.2012 - Held that - decision of Bangalore Bench of the Tribunal in the case of Maheswari Brothers & Others and M/s.Coastal Energy Pvt. Ltd. 2015 (1) TMI 208 - CESTAT BANGALORE are contrary to the decision of the Chennai Bench of the Tribunal in the case of TNPL 2009 (8) TMI 656 - CESTAT, CHENNAI . In such cases, the Hon ble Supreme Court in the case of Union of India Vs Paras Laminates (P) Ltd. 1990 (8) TMI 140 - SUPREME COURT OF INDIA observed that on identical question when there is a contrary view of the Co-ordinate benches it should be referred to the Hon ble President for decision to constitute a Larger Bench Both the Ld. Senior Advocates and other Ld. Advocate submitted that the instant issue has an impact on the entire industry all over the country. We have also expressed our prima facie view in favour of the decision of the Tribunal of Chennai Bench in the case of Tamil Nadu Newsprint & Papers Ltd. 2009 (8) TMI 656 - CESTAT, CHENNAI . Since we are referring these matters to the Hon ble President for constitution of Larger Bench, we waive the predeposit of duty along with interest and penalty till disposal of the appeals. - Stay granted.
Issues Involved
1. Classification of imported coal. 2. Applicability of ASTM standards for testing coal. 3. Requirement of chemical testing by the department. 4. Conflicting decisions by different benches of the Tribunal. Detailed Analysis Classification of Imported Coal The applicants imported Non-Coking (Steaming) coal, classified under sub-heading 27011920 of the Customs Tariff, 1975, and claimed exemption under Serial No.123 of Notification No.12/2012-Cus. The Revenue contended that the coal should be classified under sub-heading 27011200 as Bituminous Coal, based on calorific value limits, thus attracting a 5% customs duty under Sl.No.124 of the notification. The adjudicating authority upheld this classification and confirmed the demand for customs duty along with interest. Applicability of ASTM Standards The applicants argued that the Revenue based their classification on load port reports containing residual moisture, which inflates the calorific value. They contended that if the samples were tested for inherent moisture as per ASTM standards, the calorific value would be lower, fitting within the limits of sub-heading 27011920. The ASTM standards differentiate between inherent moisture (natural state) and residual moisture (post-air drying), and the applicants emphasized that the correct method involves testing for inherent moisture. Requirement of Chemical Testing by the Department The applicants argued that the department did not conduct any chemical tests on the imported coal samples to determine the calorific value on inherent moisture, which is necessary for accurate classification. The Chennai Bench of the Tribunal in the case of Tamil Nadu Newsprint & Papers Ltd. (TNPL) held that the department should carry out chemical tests if there is doubt about the description of the goods. This view was not followed by the Bangalore Bench in Coastal Energy Pvt. Ltd. and Maheswari Brothers, which relied on load port reports. Conflicting Decisions by Different Benches The Chennai Bench's decision in TNPL allowed the appeal based on the absence of chemical tests by the department, while the Bangalore Bench in Coastal Energy Pvt. Ltd. and Maheswari Brothers relied on load port reports and upheld the classification as Bituminous Coal. The applicants argued that the Bangalore Bench did not consider ASTM standards and other technical parameters, leading to conflicting views between the two benches. Conclusion and Referral to Larger Bench Given the conflicting decisions, the Tribunal referred the following issues to a Larger Bench for resolution: 1. Whether the calorific value limit on inherent moisture should be determined based on load port reports on Air Dried Basis (ADB) as held by the Bangalore Bench. 2. Whether the department should conduct chemical tests to determine the calorific value limit on inherent moisture as per ASTM standards for classification purposes, as held by the Chennai Bench. 3. Which decision, between the Bangalore Bench in Maheswari Brothers and the Chennai Bench in TNPL, correctly enunciates the law. The Tribunal waived the pre-deposit of duty, interest, and penalty until the Larger Bench resolves the issues.
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