2019 (4) TMI 1703 - AT - Customs

Import of Dawson Weak Coking coal - Benefit of Sl. No. 68 of the Notification No. 21/2002-Cus, dated 01.03.2002 - HELD THAT - There was no statutory definition of what is a coking coal in the notification during the relevant period. During subsequent periods, the principal selling index has been tested as a parameter and for some time CSN 1 and at other item CSN 2 was prescribed. Since there was no parameter fixed during the relevant period, the entitlement of the exemption would solely depend whether it had less than 12% ash content and is known in the trade as coking coal. There is overwhelming evidence that the coal in question was imported and used as coking coal and it has a CSN of 4 (according to the load port survey) or 1.5 (according to the CRCL report). At any rate, this cannot be held to be not coking coal. The appellant is entitled to the benefit of Exemption Notification No. 21/2002-Cus, dated 01.03.2002 in respect of the coking coal imported by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Notification No. 21/2002-Cus regarding exemption for coking coal.
2. Whether the imported coal qualifies as coking coal for the purpose of exemption.
3. Imposition of duty, confiscation of goods, redemption fine, and penalty.

Analysis:
1. The case involves the interpretation of Notification No. 21/2002-Cus, dated 01.03.2002, regarding the exemption for coking coal. The dispute arises from the absence of a specific definition of coking coal in the notification during the relevant period.

2. The main issue is whether the imported coal qualifies as coking coal for the purpose of exemption. The appellant argued that they are entitled to the exemption as the coal they imported had an ash content below 12% and was accepted as coking coal in trade. They presented evidence, including independent surveyors' reports, to support their claim. The Department, however, relied on a test report from the Chemical Examiner stating that the coal did not meet the parameters of coking coal.

3. The judgment analyzed the evidence presented by both parties. The Tribunal found that there was no fixed parameter for coking coal during the relevant period in the notification. The appellant had placed an order for coking coal, received coal with a survey indicating CSN '4', and used the coal for manufacturing processes. The test report from the Chemical Examiner was contested, and the Tribunal concluded that the coal in question was indeed coking coal. Therefore, the appellant was entitled to the benefit of the exemption notification, leading to the setting aside of the duty demand and related penalties.

4. Regarding the imposition of duty, confiscation of goods, redemption fine, and penalty, the Tribunal held that since the demand was set aside due to the appellant's entitlement to the exemption, the question of interest or penalty did not arise. The Department's appeal on the grounds of interest and redemption fine was also addressed. The Tribunal emphasized that once goods are confiscated, the adjudicating authority must decide on redemption fine under section 125, which was not imposed in this case. As the goods were found to be coking coal and entitled to exemption, the confiscation was set aside, and the question of redemption fine did not arise.

5. In conclusion, the Tribunal allowed the assessee's appeal, rejected the Revenue's appeal, and set aside the impugned order. The judgment clarified the entitlement to the exemption for coking coal and addressed the related issues of duty, confiscation, redemption fine, and penalty in a comprehensive manner.