2017 (1) TMI 1745 - AT - Customs

Validity of Shipping Bills - allegation is that the goods were not in conformity to the required norms of finished leather - shipping bill filed in Delhi which is nearer to Kanpur whereas goods bought in Kanpur - HELD THAT - The assessee-Respondents attempted to export Leather of beige colour along with certificate of Central Leather Institute (CLRI). Customs drew sample of the goods and sent it for testing to CLRI which certified that sample did not satisfy the norms and conditions laid down in the Public Notice No. 21/2009-14 dated 01.12.2009 on the ground that there was absence of finishing coat, without which the goods cannot be allowed to be exported in terms of the said order. On being asked as to how the earlier certificate did not raise this objection, CLRI clarified that sample tested earlier was not the same as the one sent by the Customs. There are force in the submissions of the learned counsel as in the entire order there is no finding that the impugned leather was not finished leather or was semi-finished leather and the only finding is that does not satisfy the norms and conditions for the type of finished leather as declared. There is no other evidence to suggest any contumacious conduct or deliberate mis-declaration. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Discrepancy in the quality of exported leather goods.
2. Interpretation of the Customs Act, 1962 regarding export norms.
3. Reliance on certification from Central Leather Research Institute (CLRI).
4. Justification for setting aside the order-in-original by the Commissioner (Appeals).

Analysis:
1. The case involves a dispute over the quality of exported leather goods. The Customs Officer found that the goods did not meet the required norms and conditions for finished leather, specifically noting the absence of a finishing coat. This discrepancy arose when the Central Leather Research Institute (CLRI) certified that the sample did not comply with the standards set in a Public Notice. The CLRI clarified that the earlier certified sample was not the same as the one tested later, leading to divergent opinions on the quality of the goods.

2. The Customs Act, 1962 was invoked to address the violation of export norms by the Exporter/CHA. The issue at hand was whether the goods met the prescribed standards for export, as per the Public Notice. The Tribunal considered the arguments presented by both parties, focusing on the specific requirements outlined in the legislation and the subsequent certification from the CLRI. The absence of a finishing coat was a crucial factor in determining the non-conformity of the goods.

3. The reliance on the certification provided by the CLRI played a significant role in the decision-making process. The Tribunal scrutinized the reports from CLRI, emphasizing the discrepancies between the initial and subsequent findings regarding the quality of the leather goods. The clarification provided by CLRI regarding the differences in the samples tested highlighted the complexity of the situation and the challenges in ensuring compliance with export standards.

4. The Commissioner (Appeals) set aside the original order, providing consequential relief to the assessee-Respondents. The Department, aggrieved by this decision, filed the present appeal. The Tribunal, after hearing arguments from both sides and examining the records, upheld the decision of the Commissioner (Appeals). The Tribunal found merit in the submissions made by the counsel for the assessee-Respondents, emphasizing the lack of concrete evidence to support allegations of deliberate mis-declaration or contumacious conduct.

In conclusion, the Tribunal dismissed the appeal filed by the Department, affirming the decision of the Commissioner (Appeals) based on the analysis of the discrepancies in the quality of the exported leather goods, the interpretation of relevant legal provisions, the reliance on CLRI certification, and the justification for setting aside the original order.