2015 (10) TMI 189 - AT - Customs

Waiver of pre-deposit condition Inordinate delay in supply of adverse test reports - Applicants imported coal and filed Bills of entry declaring goods as Bespoke Optimum Semi Soft Corex Coke Goods were assessed and provisional assessments were finalized by denying benefit of Notification claimed by applicants Commissioner upheld decision of adjudicating authority denying benefit of Notification Therefore, applicants seeking waiver of pre-deposit of duty Held that - applicants are disputing Chief Examiner s report showing CSN Zero and At present stage, re-test will not serve any purpose, as goods in question is perishable in nature Also adverse test reports were supplied to applicants with inordinate delay In said circumstances, adverse test report cannot be relied in light of load port certificate showing CSN is one or more Purchase contract shows that applicants have asked for supply of coal as load port certificate having CSN of one or more In case of Adani Exports Ltd. v. Commissioner of Customs, Jamnagar 2009 (8) TMI 439 - CESTAT, AHMEDABAD Tribunal held that without discarding load port certificate, test report of Chemical Examiner is not acceptable Therefore, non-supply of adverse report to applicants in time is violation of principles of natural justice Claim of applicants with regard to classification of steam coal instead of coking coal before finalization of provisional assessment which may be resulted in refund, has not been considered by both lower authorities. Concurring View Coal is not perishable commodity However, applicant has produced evidence how samples get oxidized and CSN changes in samples Admittedly in Customs Act there is no right to seek retest In fact in old Central Excise Rules there was concept of retesting However, there is delay in providing test report to applicant Therefore Applicants have made out case for complete waiver of pre-deposit of duty stay granted.

Summary

Issues:
1. Waiver of pre-deposit of duty demand confirmed by the impugned order.
2. Dispute on classification and rate of duty.
3. Reliability of Chemical Examiner's report.
4. Non-consideration of the claim for refund.
5. Prima facie case for complete waiver of pre-deposit of duty.
6. Listing of appeals for final disposal.

Analysis:

1. Waiver of Pre-deposit of Duty Demand:
The applicants sought waiver of pre-deposit of duty demand confirmed against them by the impugned order. The ld. Commissioner (Appeals) passed a common order against 19 Orders-in-Original, leading to the disposal of all stay applications through a common order. The applicants imported coal under provisional assessment, which was later finalized by the adjudicating authority, resulting in a duty demand. The applicants, dissatisfied with the decision, filed appeals seeking waiver of pre-deposit of the duty.

2. Dispute on Classification and Rate of Duty:
Out of the 23 Bills of Entry, 15 pertained to exemption claims, 3 involved rate of duty disputes, and 5 had classification disputes. The applicants argued that the delay in receiving adverse test reports rendered them unreliable, especially considering the nature of the imported goods. They highlighted discrepancies in the CSN values reported by the Chemical Examiner and emphasized the reliability of their in-house laboratory tests and the Load Port Certificate. The applicants also contended that their claim for concessional rate of duty applicable to steam coal had not been examined, potentially entitling them to a significant refund.

3. Reliability of Chemical Examiner's Report:
The applicants questioned the reliability of the Chemical Examiner's report, citing delays in receiving the reports and discrepancies in CSN values. They argued that the adverse report's delayed supply violated principles of natural justice and that the Load Port Certificate and their in-house test results supported their claims. The Tribunal found the delay prejudicial to the applicants and considered the in-house test report and purchase contract as having evidentiary value.

4. Non-Consideration of Claim for Refund:
The lower authorities failed to consider the applicants' claim for classification of steam coal instead of coking coal, which could potentially result in a refund of a substantial amount. The Tribunal noted this oversight and emphasized the importance of addressing all aspects of the applicants' claims before finalizing the assessment.

5. Prima Facie Case for Complete Waiver of Pre-deposit:
After considering the arguments from both sides and the evidence presented, the Tribunal found that the applicants had made out a prima facie case for complete waiver of pre-deposit of duty. Given the substantial revenue involved and the unaddressed claim for refund, the Tribunal waived the requirement of pre-deposit and stayed the recovery of the duty during the appeals' pendency.

6. Listing of Appeals for Final Disposal:
Due to the significant revenue implications and the urgency of resolving the appeals, the Tribunal directed the registry to list the appeals for final disposal on a specified date to expedite the process and provide a timely resolution to the parties involved.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT MUMBAI and the comprehensive considerations leading to the decision regarding the waiver of pre-deposit of duty demand and the listing of appeals for final disposal.