2018 (7) TMI 348 - AT - Customs

Classification of coal imported by the appellant/assessee - whether Steam Coal or Bituminous Coal? - Held that - Regarding the issue of classification of coal, different Benches of CESTAT rendered conflicting decisions. The channai Bench as well as Ahmedabad Bench held that coal imported would fall under steam coal attracting nil rate of duty. It was also followed by the Mumbai Bench. On the other hand, the Bangalore Bench of CESTAT held that the coal imported would be bituminous coal attracting duty @ 5%. Thus, in view of the conflicting decisions, the matter was referred to the Larger Bench and vide order dated 16.1.2017, the issue was taken up for consideration by the Larger Bench - Taking note of the fact that the decision rendered by the Bangalore Bench in the case of M/s. Maruti Ispat and Energy Pvt. Ltd. 2014 (10) TMI 944 - SUPREME COURT OF INDIA was appealed before the Hon ble Apex Court, the Larger Bench directed that the matter being subjudice before the Hon ble Apex Court, the assessees were granted opportunity to come again before the Tribunal after the verdict from the Hon ble Apex Court. The department has not filed any appeal against the above Larger Bench decision. Pursuant to the Larger Bench, which has given liberty to the appellants to await the outcome of the Hon ble Apex Court s decision, various Benches of CESTAT as in the case of CESTAT, Hyderabad as well as CESTAT, Ahmedabad have already disposed the appeals applying the Larger Bench decision, as stated supra. The CESTAT, Hyderabad has remanded the matter directing the adjudicating authorities to conduct denovo proceedings after the outcome of the decision of the Hon ble Apex Court. The appeals require to be remanded to the adjudicating authority for denovo consideration basing upon the outcome of the decision of the Hon ble Apex Court in Maruti Ispat and Energy Pvt. Ltd., as laid down by the Larger Bench of the Tribunal - appeal allowed by way of remand.

Summary

Issues:
Classification of imported coal under CTH 2701 1290 or CTH 2701 1200, waiver of predeposit by Tribunal, modification of waiver by department, conflicting decisions by different CESTAT Benches, reference to Larger Bench, applicability of Larger Bench decision, remand to adjudicating authority.

Classification of Coal Issue:
The dispute in the appeals revolves around the classification of coal imported by the appellant/assessee during the relevant period. The appellants imported coal from various countries, particularly Indonesia, classifying it as steam coal under CTH 2701 1290, attracting a nil rate of duty. Conversely, bituminous coal under CTH 2701 1200 attracted a 5% duty as per Notification No.12/2012-Cus. dated 17.3.2012.

Waiver of Predeposit and Modification Issue:
The department filed miscellaneous applications seeking to modify the waiver of predeposit granted by the Tribunal in these appeals. The department argued that despite the waiver, appellants should predeposit as per section 129E of the Customs Act, 1962, due to the Larger Bench's decision and absence of a stay by the Hon'ble Apex Court in a related case. Appellants' counsels opposed these applications, citing the subjudice status of the issue before the Hon'ble Apex Court and previous remands by CESTAT Benches awaiting the Apex Court's decision. They contended that the waiver order had merged with the High Court's directive and was no longer maintainable before the Tribunal.

Conflicting Decisions and Reference to Larger Bench Issue:
Different CESTAT Benches rendered conflicting decisions on the classification of imported coal, with Chennai and Ahmedabad Benches considering it as steam coal and Bangalore Bench as bituminous coal. Due to these discrepancies, the matter was referred to the Larger Bench, which directed appellants to await the Hon'ble Apex Court's decision before the Tribunal could proceed. The department did not appeal this decision, and subsequent CESTAT Benches, like Hyderabad and Ahmedabad, disposed of appeals in line with the Larger Bench's directive, remanding matters for denovo consideration post the Apex Court's decision.

Applicability of Larger Bench Decision and Remand Issue:
Considering the background and the Larger Bench's decision, the Tribunal concluded that the appeals should be remanded to the adjudicating authority for denovo consideration based on the outcome of the Hon'ble Apex Court's decision in a related case. The Tribunal set aside the impugned orders, dismissed the miscellaneous applications, and upheld the remand to the adjudicating authority, following the Larger Bench's ruling.

This detailed analysis covers the key issues of the legal judgment involving the classification of imported coal, waiver of predeposit, conflicting decisions by different CESTAT Benches, reference to the Larger Bench, and the subsequent remand to the adjudicating authority based on the Hon'ble Apex Court's decision.