2017 (3) TMI 1431 - AT - Customs

Classification of imported goods - Alloy Steel Melting at pre-shipment stage - The Revenue s main arguments are that the DGFT authorised agency who issued certificate at pre-shipment stage was not authorised to issue certificate on the status of the goods - natural justice - Held that - considering the fact of non-allowing cross-examination to the respondents by the original adjudicating authority and because of lack of cross-examination of experts, Commissioner (Appeals) in the impugned order calls these reports as cannot be relied and incomplete - However, instead of totally discarding the expert reports given by the Revenue in support, it would be appropriate to allow cross-examination to the respondents of the concerned experts, on whose reports Revenue is relying and thereafter decide on the reliability of the said expert reports, which are supporting the case of mis-declaration against the respondent importer. Consequently, we set aside the impugned order-in-appeal and remand the matter to Commissioner (Appeals), who shall allow cross-examination of the concerned experts to the respondent importer - appeal allowed by way of remand.

Summary

Issues:
1. Revenue's failure to prove the subject goods were unused new grinding media balls.
2. Denial of cross-examination of experts by the original adjudicating authority.
3. Imposition of penalty under a non-existent clause.
4. Proceedings initiated against the respondent by Show Cause Notice without a proper charge.
5. Allegation of mis-declaration against the respondent importer.
6. Reliability of expert reports supporting different claims.

Analysis:

1. The main issue in this case is the Revenue's inability to establish that the imported goods were indeed unused new grinding media balls. The Commissioner (Appeals) noted that the Revenue did not examine a vital report certifying the goods as Alloy Steel Melting, and the scope of certification by the pre-shipment inspecting agency did not cover the description of the consignment for classification. The goods were found different upon customs examination, leading to suspicions of mis-declaration to evade customs duty.

2. Another critical issue is the denial of cross-examination of three experts by the original adjudicating authority. The respondent argued that the denial was justified, while the Commissioner (Appeals) found it a violation of natural justice. This denial played a significant role in the case's outcome, as it affected the reliability of the expert reports supporting the Revenue's claims.

3. The respondent raised concerns about the imposition of a penalty under a non-existent clause and the initiation of proceedings without a proper charge through the Show Cause Notice. These procedural irregularities were highlighted as grounds for challenging the penalty and the legality of the proceedings.

4. Furthermore, the respondent contended that the imported goods were not liable for confiscation under Section 111 of the Customs Act, as they believed in good faith that the goods were Alloy Steel Scraps. The respondent argued that they filed bills of entry based on this belief, indicating a lack of intent to evade customs duty.

5. The crux of the matter lies in the conflicting expert reports supporting different claims. The Commissioner (Appeals) based the decision on a set of reports different from those relied upon by the Revenue. The judgment emphasized the importance of allowing cross-examination of experts to ensure a fair assessment of the reliability of the reports, ultimately leading to the decision to remand the matter for further proceedings.

6. In conclusion, the Tribunal allowed the Revenue's appeal by way of remand, setting aside the impugned order-in-appeal. The case was remanded to the Commissioner (Appeals) to permit cross-examination of experts, provide an opportunity for personal hearing and submission of evidence, and decide the matter afresh within a specified timeframe.