2023 (11) TMI 1209 - AT - Customs

Classification of imported goods - import of furnace oil from UAE - to be classified under CTH 27101950 (furnace oil) as declared by the appellant or under CTH 27109900 (waste oil) as alleged by the revenue? - entire case of classification of the goods imported by the appellant was decided on the basis of test report of CRCL- Vadodara - Confiscation - redemption fine - penalty under Section 112(a) of Customs Act, 1962. HELD THAT - From the perusal of all the Circulars, it is found that the facility to test waste oil or furnace oil was made available only as per the circular dated 07.06.2009 prior to that the CRCL Vadodara or as the case may be CRCL Delhi, did not have the facility to test the waste oil/furnace oil. Admittedly in the present case, the tests of goods in question were done prior to the issue of Circular No. 15/2009-Cus. Accordingly, the testing done by CRCL Vadodara/Delhi cannot be said to be the correct test as these Laboratories did not have the facilities for testing waste oil/furnace oil. It is a settled law that the Board Circulars are binding on the departmental officer as held by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS M/S RATAN MELTING WIRE INDUSTRIES 2008 (10) TMI 5 - SUPREME COURT . In view of above undisputed fact that during the relevant time as per Board Circular the CRCL Vadodara or as the case may be CRCL Delhi being not equipped with the facility to test waste oil/furnace oil the test report of the said laboratories cannot be accepted. Since the goods were supposed to be released as per the High Court order, the act of department is clearly the non-compliance with the High Court order for which if any action to be taken it is by the High Court. Therefore, even after prima facie finding that the goods were supposed to be released this Tribunal can not give any direction in this regard with reference to the Hon ble High Court in GAURAV LUBRICANTS INDUSTRIES PRIVATE LIMITED VERSUS UNION OF INDIA 2018 (10) TMI 2016 - GUJARAT HIGH COURT . However, since in the present case the matter decided on merit, the appellant is otherwise entitled for release of the goods. Since the test report of CRCL Vadodara/Delhi cannot be accepted the declaration made by the appellant in respect of nature of goods, classification and also valuation are found to be absolutely correct. The impugned orders are set aside - Appeals are allowed.

Summary

Issues Involved:
1. Legality of the test report conducted by CRCL Vadodara.
2. Compliance with High Court orders regarding provisional release of goods.

Summary:

1. Legality of the test report conducted by CRCL Vadodara:
The appellant challenged the classification of imported furnace oil as waste oil based on CRCL Vadodara's test report. The appellant argued that CRCL Vadodara was neither authorized nor equipped to test the subject goods during the relevant period, citing Circulars No. 30/2017-Cus, 43/2017-Cus, 11/2018-Cus, and 15/2019-Cus. The Tribunal found that during the relevant period, CRCL Vadodara and CRCL Delhi did not have the facilities to test waste oil/furnace oil, as confirmed by Circulars No. 43/2017-Cus and 11/2018-Cus. The Tribunal referenced several judgments, including Asian Granito India Vs. CC, Mundra, and Chem Plast Vs. C.C- Jamnagar, which supported the view that test reports from laboratories not equipped to test specific goods cannot be accepted. Consequently, the Tribunal determined that the test report from CRCL Vadodara was not valid, and the appellant's declaration regarding the nature, classification, and valuation of the goods was correct.

2. Compliance with High Court orders regarding provisional release of goods:
The appellant contended that the department failed to comply with the High Court's order to release the goods provisionally upon furnishing a bank guarantee. The Tribunal acknowledged the High Court's order dated 17.09.2018, which directed the department to release the goods upon the appellant furnishing a bank guarantee. Despite the department's letter dated 31.10.2018 requesting the appellant to take charge of their goods, the goods were not released. The Tribunal noted that non-compliance with the High Court's order is a matter for the High Court to address. However, since the Tribunal found the appellant's declarations to be correct, the appellant was entitled to the release of the goods.

Conclusion:
The Tribunal set aside the impugned orders, allowing the appeals with consequential relief, and confirmed that the appellant's declarations regarding the nature, classification, and valuation of the goods were correct.