2018 (4) TMI 1190 - AT - Customs

Benefit of N/N. 12/2012-Cus dated 17.03.2012 - Due to the lack of facilities MMR could not be tested by the Chemical Examiner - main case of department is that the Chemical Laboratory did not have facility to conduct necessary tests for determining the MMR, the sample ought to have been sent to various other Laboratories which have the facility - Held that - It is responsibility of the department to send the sample to a Lab which has all the testing facilities to test the required parameters which are prescribed under the notification. In the absence of such test report, the authorities below have relied upon the report given by independent surveyor. The grounds of appeal itself states that the erroneous decision came to be passed because of failure to get the sample tested at the appropriate lab. For this deficiency, the appellant cannot be saddled with burden to pay duty by denying the exemption. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility for exemption under Notification No. 12/2012-Cus regarding imported coal.
2. Discrepancy between Chemical Examiner's report and independent surveyor's report in determining coal classification.
3. Reliance on load port certificate for fulfilling conditions of CSN and MMR under the Notification.
4. Responsibility of the department to ensure proper testing facilities for imported goods.

Analysis:
1. The case involved appeals by the department against an order granting exemption under Notification No. 12/2012-Cus for imported coking coal. The dispute centered around the classification of the coal based on parameters like Swelling Index, Crucible Swelling Number (CSN), and mean reflectance (MMR) as specified in the notification.

2. The department argued that the classification based on the independent surveyor's report was flawed due to discrepancies with the Chemical Examiner's findings. The absence of MMR testing due to the lab's limitations was highlighted as a crucial factor in determining the coal's eligibility for exemption. The Commissioner (Appeals) was criticized for not considering this discrepancy, leading to an erroneous decision.

3. On the other hand, the respondent contended that all imports met the CSN and MMR requirements as per the load port certificate from an international testing agency. Despite the Chemical Examiner's inability to test MMR, the load port certificate was deemed authentic. Citing precedence, the respondent argued that rejecting the load port certificate without valid reasons was unwarranted, emphasizing fulfillment of conditions for exemption.

4. The tribunal emphasized the department's responsibility to ensure proper testing facilities for determining the parameters specified in the notification. Due to the failure to conduct MMR testing at a suitable lab, reliance on the independent surveyor's report was deemed justified. The tribunal dismissed the appeals, stating that the department could not shift the burden of duty payment to the appellant due to testing deficiencies, thereby upholding the grant of exemption.

In conclusion, the judgment clarified the importance of adhering to testing requirements for imported goods to claim exemptions under relevant notifications. The case underscored the need for accurate classification based on prescribed parameters and highlighted the significance of valid testing procedures in determining eligibility for duty exemptions.