2018 (8) TMI 185 - AT - Customs

Classification of goods - Bitumen - Held that - The two test reports namely, that of the Deputy Chief Chemist and of the Central Revenue Control Laboratory being in conflict with each other, will not suffice for deciding upon the classification. However, the primacy accorded to certain reports of M/s Geochem Laboratories Pvt Ltd as well as that of the National Iranian Oil Refining Company which are neither authenticated nor certified for expertise is improper. It is therefore, strange that a chemical laboratory arrogating to itself the expertise of denying Iran as a source of natural bitumen has been accorded such credence in the adjudication order and with no support to substantiate the contents thereof. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported bitumen as natural or petroleum bitumen, reliance on test reports and expert opinions, imposition of duty, penalty, and confiscation.

Analysis:
The case involved the classification of imported bitumen by M/s Ashoka Buildcon Limited as natural bitumen under 2714 90 or petroleum bitumen under 2713.20 of the Customs Tariff Act, 1975. Initially, duty at 10% was allowed pending a test report from the Deputy Chief Chemist, who confirmed the goods as natural bitumen. Subsequently, a demand for duty recovery of &8377; 39,35,661 was made based on the classification of petroleum bitumen. The Central Revenue Control Laboratory also opined that the goods were petroleum bitumen. The appellant contested this, arguing that the reliance on reports and opinions was improper, especially as they sourced the goods from Iran and no evidence of non-production of natural bitumen in Iran was presented.

The impugned order confirmed a differential duty of &8377; 19,67,830.50, confiscated the goods, and imposed a fine and penalties on the directors and technical officer of the appellant. The adjudicating authority rejected the test reports and expert opinions, citing inconsistencies and lack of credibility. The appellant challenged the reliance on reports from Geochem Laboratories Pvt Ltd and the National Iranian Oil Refining Company, arguing that they were not authenticated or certified for expertise.

The Tribunal found that the conflicting test reports were insufficient for classification and criticized the reliance on unauthenticated reports. The Tribunal noted that natural bitumen is found in various countries, including Iran, and referenced historical evidence of bitumen existence. It concluded that the foundations for the duty demand and penalties were shaky or non-existent, leading to the setting aside of the impugned order and allowing the appeals.

In the end, the Tribunal's decision was based on the lack of concrete evidence supporting the classification of the imported bitumen as petroleum bitumen, highlighting the importance of authenticated and credible expert opinions in such cases.