2007 (8) TMI 125 - AT - Customs

Method of sampling and testing Persons who tested the samples should be cross-examined Acceptance of sample by Custom House Lab. does not establish that sampling was done as per the instructions in Departmental Manual and as per the ISI procedures of sampling Appeal allowed

Summary

Issues:
1. Differential demand of Customs duty on imported goods due to excess phosphorous content.
2. Compliance with sampling and testing procedures.
3. Cross-examination of persons involved in testing the samples.

Analysis:
1. The judgment deals with an appeal against the confirmation of a Customs duty demand on imported Low Ash Low Phosphorous Coke from China. The Commissioner upheld the demand as the goods exceeded the stipulated phosphorous content percentage, leading to a differential duty of Rs. 30,89,223/- and Rs. 2,01,17,054/- on different consignments. The case underwent multiple adjudications, including a remand by the Tribunal for fresh adjudication. The issue revolved around the admissibility of concessional duty rates based on the phosphorous content of the goods.
2. The Commissioner's order was challenged on the grounds of non-disclosure of sampling and testing procedures to the importers, as directed by the Tribunal. The Tribunal found discrepancies in the procedures followed, noting that the examination reports did not detail the sampling method. The Commissioner's reliance on the acceptance of samples by the Custom House Laboratory was deemed insufficient to establish compliance with sampling standards. The judgment highlighted the necessity of adhering to prescribed sampling procedures to validate the test results accurately.
3. The judgment addressed the importers' right to cross-examine individuals involved in testing the samples, as directed by the Tribunal. Despite the Tribunal's order, the Commissioner denied the importers the opportunity for cross-examination, citing adherence to established procedures. The judgment referenced legal precedents emphasizing the importance of natural justice principles, including the right to cross-examine witnesses. The Commissioner's failure to permit cross-examination was deemed a violation of procedural fairness, leading to a remand of the case for compliance with the Tribunal's directives.

In conclusion, the judgment allowed the appeal by remanding the case to the adjudicating authority for a fresh determination. The order emphasized the need to provide importers with sampling and testing procedures, ensure compliance with prescribed standards, and grant the right to cross-examine individuals involved in testing. The decision underscored the significance of procedural fairness and adherence to legal principles in Customs duty disputes.