2019 (1) TMI 1189 - AT - Customs

Import of coking coal or not - provisional assessment - case of Revenue is that the provisional assessment was not ordered merely for test report but also because no original document was produced at the time of assessment by the appellant.. The root of the dispute is if the product imported is coking coal‟ or not? Held that - As far as the period when the imports were made is concerned, there was no definition or description prescribed under the Customs Act or Tariff with respect to Coking Coal . It is seen that the supplier has described the product as Coking Coal in the invoice. The test report which accompanied the consignment describes the product in the general description as Indonesian Coking Coal N Bulk - The chemical examiners reports or the orders of lower authorities do not identify the parameters which are used to differentiate between them. We find that significant merit in the argument of Ld. Counsel. Nowhere in the proceedings, Revenue (or for that matter the importer) has produced any concrete literature which describes coking coal and identifies parameters that differentiate between coking coal and other coals - In these circumstances, it would not be possible to finalize the issue. The impugned order is, therefore, set aside and the matter is remanded to the original Adjudicating Authority, to decide afresh after identifying specific parameters duly supported by literature on which they wish to rely on for differentiating between coal and coking coal - appeal allowed by way of remand.

Summary

Issues Involved:
Appeal against demand of customs duty by denying notification benefit for imported coal; Interpretation of what constitutes "coking coal"; Validity of test reports in determining coal classification.

Analysis:

Issue 1: Appeal against demand of customs duty
The appellant, engaged in importing coking coal, challenged the denial of notification benefits for imported coal. The appellant imported coal, with a portion unloaded at Mudra port treated as coking coal under notification 21/02-Custom. However, another portion unloaded at Porbandar was classified as "other than coking coal" based on test reports. The appellant argued that all coal was coking coal, supported by supplier certificates and contract descriptions. The appellant contended that provisional assessment without valid reasons was unjustified, citing the Tata Chemicals Ltd. case. The respondent argued that original documents were not produced during assessment.

Issue 2: Interpretation of "coking coal"
The Tribunal analyzed the definition of "coking coal" under notification 21/2002 and subsequent explanations. The absence of a clear definition under the Customs Act at the time of import raised ambiguity. Test reports from various laboratories conflicted, with none definitively labeling the coal as coking coal. The Tribunal highlighted the lack of specific parameters in the reports to differentiate coking coal from other types. The Commissioner's reliance on general literature excerpts was criticized for not being shared with the appellants during proceedings.

Issue 3: Validity of test reports
The Tribunal noted discrepancies in the test reports' conclusions and the absence of clear parameters for classifying coking coal. The reports did not provide specific criteria for identifying coking coal based on moisture content, ash content, volatile matter, or CSN number. The Tribunal emphasized the necessity for concrete literature defining coking coal parameters to make a conclusive determination. Consequently, the impugned order was set aside, and the matter remanded for fresh adjudication by the Adjudicating Authority with specific parameters supported by literature for distinguishing between coal types.

In conclusion, the Tribunal allowed the appeal by remanding the case for a fresh decision based on identified parameters for differentiating coking coal from other coals, emphasizing the need for clear literature-supported criteria in coal classification.