2015 (2) TMI 957 - AT - Customs

Import of Non-Alloy Steel slabs - benefit of Customs Notification No. 21/2002-Cus. dated 1.3.2002 (Sl. No. 190B) - Mis-declaration of goods - NML vide their report dated 27.10.2004 had opined that the samples are not prime quality and can be considered as Non-Alloy Steel slabs non-prime - appellant requested to retest of the samples, which was rejected by the Department - Held that - Adjudicating authority examined the MSME test report dated 21.4.2009 as per direction of the Hon ble High Court and observed that the report of MSME mentioned, the goods are of uniform size and shape whereas, as seen from the factual data presented, there is a huge heterogeneity in the dimensions of the consignment. The findings of the report and the conclusion are not in tandem. The adjudicating authority reproduced observed value of MSME Report in the adjudication order. On perusal of the MSME Testing Report, we find that the observed value as reproduced in the adjudication order is incomplete. The adjudicating authority observed that NML is a specialized agency dealing with metals and therefore, it has accepted the conclusions given by them. It is further observed that its materials evaluation and characterization facilities compare with the best in the world. We are concerned with the particular test report NML and MSME and therefore we would not like to express any opinion on the competency of expert opinion of NML and MSME. In this context, it may be referred that the Tribunal in the case of Sabari Exim Pvt. Ltd. (2004 (10) TMI 460 - CESTAT, CHENNAI) rejected NML report and accepted imported non-alloy steel blooms as prime quality on the basis of report of other agency, imported in December 2002 and extended the benefit of exemption Notification No. 21/2002-Cus. Apart from that, as contended by the appellant, the Department released the goods in respect of six Bills of Entry on the basis of the same MSME Report. After examining MSME Report as per order of the High Court, we are of the view that MSME report should be accepted, wherein it has been opined that the goods in question are of prime chemistry and meet the quality requirements of prime quality. Accordingly, the demand of duty, penalty and confiscation of goods and imposition of penalty are not sustainable. So, we set aside the impugned order - Decided in favour of assessee.

Summary

Issues Involved:

1. Classification of imported goods as prime or non-prime quality non-alloy steel slabs.
2. Entitlement to concessional rate of duty under Customs Notification No. 21/2002-Cus.
3. Validity and acceptance of test reports from different laboratories.
4. Legitimacy of documents and translations provided by the Department.
5. Adjudication process and compliance with judicial directions.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The appellant imported non-alloy steel slabs and declared them as prime quality, seeking the benefit of concessional duty under Customs Notification No. 21/2002-Cus. The initial test by the National Metallurgical Laboratory (NML) concluded that the slabs were non-prime quality. However, after judicial intervention, a retest by the MSME Testing Centre concluded that the slabs were of prime quality. The adjudicating authority's reliance on the NML report was challenged, and the Tribunal found that the MSME report, which concluded the slabs were of prime quality, should be accepted.

2. Entitlement to Concessional Rate of Duty:
The appellant claimed the benefit of a concessional rate of duty under Notification No. 21/2002-Cus. based on the classification of the slabs as prime quality. The Tribunal noted that the MSME report, which was in conformity with IS 2830 specifications, supported the appellant's claim. The adjudicating authority's decision to deny this benefit based on the NML report was overturned.

3. Validity and Acceptance of Test Reports:
The Tribunal emphasized the importance of the MSME report, which was obtained following a High Court order. The MSME report found the slabs to be within the limits specified by IS 2830, thus confirming their prime quality. The Tribunal criticized the adjudicating authority for not considering the MSME report in its entirety and for overlooking the remarks indicating compliance with IS 2830 specifications.

4. Legitimacy of Documents and Translations:
The adjudicating authority relied on documents received from overseas sources, which were in French and accompanied by an unofficial English translation. The Tribunal found that these documents were not certified and could not be accepted as evidence under the Evidence Act. Furthermore, the documents did not dispute the genuineness of the invoices or explicitly classify the goods as second quality.

5. Adjudication Process and Compliance with Judicial Directions:
The Tribunal highlighted the sequence of judicial directions, including orders from the High Court and the Supreme Court, which mandated a retest of the samples. The MSME report obtained as per these directions was to be the basis for adjudication. The Tribunal found that the adjudicating authority failed to comply with these judicial directions by not fully considering the MSME report.

Conclusion:
The Tribunal concluded that the MSME report, which classified the slabs as prime quality, should be accepted. Consequently, the demand for differential duty, penalties, and confiscation of goods was not sustainable. The appeals were allowed, and the impugned order was set aside, granting consequential relief to the appellants.