2018 (2) TMI 586 - AT - Customs

Classification of goods - imported sulphonated fish oil - perusal of retest report - Held that - It was not within the jurisdiction of Commissioner (Appeals) to rely upon the first test report which was taken note of in the first order of Commissioner (Appeals) and was set aside. Further as per the re-test the goods are free from mineral oils thus taking them out of the ambit of Chapter heading 3403 - the order passed by the Original Adjudicating Authority is proper - appeal allowed by restoring the Order-in-Original.

Summary

Issues: Classification of imported oil under different headings, reliance on test reports, jurisdiction of Commissioner (Appeals)

The judgment by the Appellate Tribunal CESTAT, ALLAHABAD involved a dispute regarding the classification of imported oil. The appellants declared the oil as sulphonated fish oil under heading 3402.9020, but test reports from CRCL revealed conflicting results, with one report classifying it as mineral oil and additives under heading 3403.9900, and another report confirming it as sulphonated fish oil. The Original Adjudicating Authority passed an order confirming the demand, which was appealed by the appellant. The Commissioner (Appeals) set aside the original order and remanded the matter for a fresh report from CRCL due to the contradictory test reports.

Subsequently, a retest report from CRCL indicated that the goods were sulphonated fatty oil (other than fish oil) but free from mineral oil. The Assistant Commissioner accepted this report, dropping the demand against the appellant. However, the Revenue appealed this decision, arguing that the first CRCL report should be relied upon as it was against the appellant, and the subsequent report was not based on a sample drawn in the presence of the Revenue.

The Appellate Authority sided with the Revenue, setting aside the order based on the first CRCL report. The appellant contended that the reliance on the first report was inappropriate, as it had been set aside in the remand order for fresh testing. The appellant argued that even if the oil was sulphonated fatty oil, it should still be classified under heading 3402.

Upon hearing both sides, the Appellate Tribunal found merit in the appellant's arguments. They concluded that the Commissioner (Appeals) should not have relied on the first test report that had been set aside. The retest report confirming the absence of mineral oil justified the classification under heading 3402. Therefore, the impugned order of the Commissioner (Appeals) was set aside, and the appeal was allowed by restoring the Order-in-Original.