2015 (2) TMI 741 - AT - Customs

Classification of imported Coal - Bituminous coal or Steam coal - Extended period of limitation - Identical issue already decided by the co-ordinate bench of tribunal - Held that - It is a settled position in law as held by the hon ble apex court in the case of Indo-International Industries 1981 (3) TMI 77 - SUPREME COURT OF INDIA that- if any term or expression has been defined in the enactment, then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment, the meaning of the term in common parlance or commercial parlance has to be adopted. In the present case, the Customs Tariff defines bituminous coal by means of certain specification and if those specifications are satisfied in the case of imported coal, they will have to be classified as bituminous coal notwithstanding the fact that in commercial parlance they might be known otherwise. The argument of the appellant since Inherent Moisture is calculated on dry air basis, the same should be considered as Residual Moisture, this argument does not stand to any reason. The test certificate clearly defines the parameter as Inherent Moisture and not as residual moisture. The said test reports have been accepted by the appellants and they have never disputed the same. From the records, it is seen that the customs authorities had referred the matter to the Central Revenue Control Laboratory who had confirmed that the values of Ash content, sulphur content and Btu are to be applied on Air Dry Basis (ADB). There is nothing on record nor any evidence to the contrary led by the appellant to rebut the correctness of the calculation done by the Revenue. In this factual scenario, we do not find any merit in the contention that there is an error in the computation made by the Revenue. We further observe that a co-ordinate bench of this Tribunal at Bangalore had considered an identical issue involving the same goods imported by some other importers, at length and had passed a final order classifying the goods as bituminous coal under CTH 2701.12 and rejecting the contention of the importers that the goods are classifiable as steam coal . In the absence of any evidence to the contrary, judicial discipline mandates that the said decision be followed by other benches of the Tribunal. Therefore, we do not find any reason to adopt a different view, at the interim stage of stay. As regards the issue of time bar raised by the appellant, it is both a question of fact as well as law. Nevertheless, considering the fact the appellants have been importing these goods since a long time and the test reports at the load port were available, it is surprising that the customs authorities had not examined the matter earlier. Therefore, there is some merit in the contention of the appellants in this regard. As regards the contention that since the goods originated from ASEAN countries, they would be eligible for the benefit of exemption under notification 46/2011-Cus, this contention is also quite valid. The appellants have not pleaded financial hardship in spite of a query from the bench in this regard. Therefore, the balance of convenience lies in favour of revenue in the absence of a prima facie case in favour of the appellant.The decision of the hon ble apex court in the case of Dunlop India ltd. 1984 (11) TMI 63 - SUPREME Court and Benara Valves Ltd. 2006 (11) TMI 6 - SUPREME COURT OF INDIA refer. Accordingly we are of the view the appellants should be directed to make pre-deposit of the duty demand for the normal period of limitation. Partly allowed in favour of appellant.

Issues Involved:
1. Classification of imported coal as 'bituminous coal' or 'steam coal'.
2. Calculation of Gross Calorific Value (GCV) by the department.
3. Revision of customs assessments without challenging the original assessments.
4. Assessment of goods based on commercial/trade parlance versus statutory definition.
5. Specific tariff entry preference.
6. Invocation of the extended period of limitation.
7. Eligibility for concessional duty under notification No. 46/2011-Cus for ASEAN origin goods.

Issue-wise Detailed Analysis:

1. Classification of Imported Coal:
The core issue revolves around whether the imported coal should be classified as 'bituminous coal' under CTH 2701 12 00 or 'steam coal' under CTH 2701 19 20. The department classified the coal as 'bituminous coal' based on its volatile matter content exceeding 15% and gross calorific value exceeding 5833 Kcal/kg, as per the test reports from the load port. The appellants contended that the coal should be classified as 'steam coal' based on its end use and commercial parlance.

2. Calculation of Gross Calorific Value (GCV):
The appellants argued that the department's calculation of GCV using the formula was incorrect due to an error in the figure used for inherent moisture (IM). They claimed that if the correct IM was considered, the GCV would be less than 5833 Kcal/kg, thus classifying the coal as 'steam coal'. The department, however, relied on the Parr formulae prescribed in ASTM D388-12 and confirmed by the Central Revenue Control Laboratory, which supported their GCV calculations.

3. Revision of Customs Assessments:
The appellants argued that the customs authorities had accepted their declarations and assessed the goods to duty at the time of import. Therefore, the authorities could not revise the assessments without challenging the original assessments through an appeal before the competent authority.

4. Assessment Based on Commercial/Trade Parlance:
The appellants contended that since the import and commercial documents described the goods as 'steam coal', the assessment should be based on commercial parlance rather than statutory definitions. However, the tribunal held that as per the customs tariff definition, any coal satisfying the specified criteria must be classified as 'bituminous coal', irrespective of its commercial name.

5. Specific Tariff Entry Preference:
The appellants argued that the specific tariff entry for 'steam coal' should be preferred over the general entry for 'bituminous coal'. The tribunal, however, upheld the classification based on the statutory definition provided in the customs tariff.

6. Invocation of Extended Period of Limitation:
The appellants argued that the extended period of limitation could not be invoked in disputes relating to the interpretation of law, as they had not suppressed any information. The tribunal acknowledged some merit in this argument, noting that the customs authorities had not examined the matter earlier despite the availability of test reports at the load port.

7. Eligibility for Concessional Duty:
The appellants claimed eligibility for the benefit of notification No. 46/2011-Cus for goods imported from ASEAN countries, which was not extended in the case of M/s Gupta Coal. The tribunal found this contention valid and noted that extending this concession would substantially reduce the duty demand.

Conclusion:
The tribunal directed M/s Finolex Industries Ltd. and M/s Gupta Coal India Pvt. Ltd. to make pre-deposits of Rs. 3.78 Crore and Rs. 73 lakhs respectively, approximately covering the duty demands for the normal period of limitation. Upon compliance, the pre-deposit of the balance dues would be waived, and recovery stayed during the pendency of the appeals. The tribunal's decision was influenced by the need to adhere to judicial discipline following a similar case decided by the South Zonal Bench and the absence of any financial hardship plea from the appellants.

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