2020 (8) TMI 615 - AT - Customs

Classification of imported goods - Calcite Sand (Calcite Powder) - classifiable under CT 2503 9030 as claimed by the Appellant or required to be classified under CTH 2836 5000 as confirmed vide the impugned order? - HELD THAT - While in general, it is true that test report of CRCL cannot be brushed aside lightly, however, when CBEC itself categorically admits that for calcite powder, their Labs were not equipped to test the same till 2019, as evident from Circular No.43/2017-Cus dt.16.11.17 as also Circular No.15/2019-Cus dt.7.6.19, the Kandla Customs Chemical Lab reports as relied upon in the impugned order have to be discarded. The present case is identical to that in the case of C.C. C.E. S.T. -NOIDA VERSUS MANIKYA CREATIONS PVT. LTD. 2018 (7) TMI 1227 - CESTAT ALLAHABAD and M/S PAVAS POLYCHEM PVT. LTD., SHRI PAWAN KHATRI, DIRECTOR VERSUS COMMISSIONER OF CUSTOMS, KANPUR 2018 (2) TMI 1573 - CESTAT ALLAHABAD . It therefore must be held that in absence of any independent cogent evidence to reject the classification under CTH 2503 9030 as claimed by the Appellant, the claim of the revenue to classify the very goods under CTH 2836 5000 has no support and must fail. Since the test reports cannot be relied upon in light of the categorical admission in Circular No.43/2017-Cus dt.16.11.17 regarding lack of infrastructure in Customs Labs to test calcite powder, it is not deemed necessary to examine whether the sampling was properly done as per applicable BIS including Clause 4.1- APPEDIX B OFIS 918 1985 or otherwise. There is no option but to go by the technical data sheet/description provided by overseas supplier for the products in question. Nowhere the suppliers refer to the product to be of Precipitated form at all. In fact, the presence of other minerals, the Oil Absorption Ratio shown in the technical data sheet otherwise show that the product in question is not Precipitated and hence, the classification sought for by the Appellant under CTH 2503 9030 therefore has to be upheld - the differential duty demand, interest, fine and penal action is not sustainable - Appeal allowed.

Summary

Issues: Classification of Calcite Sand (Calcite Powder) under CT 2503 9030 or CTH 2836 5000

Analysis:
1. The issue in this case revolves around the classification of Calcite Sand imported by the Appellant. The dispute arises from whether the product should be classified under CT 2503 9030, as claimed by the Appellant, or under CTH 2836 5000, as confirmed in the impugned order.

2. The facts of the case reveal that samples were drawn from the imports, and the Kandla Customs Laboratory reported the goods as "Uncoated Precipitated Calcium Carbonate." This led to a differential duty demand being raised on the Appellant, which was confirmed in the impugned order. The Appellant contested the sampling process and the capability of the Kandla Customs Chemical Lab, citing the judgment in Tata Chemicals Ltd. case. The Appellant also highlighted circulars indicating the lab's incapability to test calcite powder until 2019. Several case laws were relied upon to support the classification under CT 2503.

3. The Appellant emphasized the importance of "Oil Absorption ratio" and "particle size" in determining the nature of Calcium Carbonate. They obtained an independent test report to support their claim that the imported products were natural calcite powder. Reference was made to Indian Standards and product literature to demonstrate that the goods did not meet the criteria for Precipitated Calcium Carbonate.

4. On the other hand, the Authorized Representative for the revenue argued that the case laws cited by the Appellant were not directly applicable as they pertained to Calcite powder, whereas the Appellant imported Calcite sand. The lab's ability to test the goods was defended, and reliance was placed on various case laws regarding test reports and contemporaneous imports.

5. The Tribunal examined the submissions and records, noting that the lab reports could not be relied upon due to the lab's admitted lack of infrastructure to test calcite powder until 2019. The case laws cited by the Appellant were found to be applicable, leading to the conclusion that the goods should be classified under CT 2503 9030. The argument about the distinction between sand and powder forms was addressed, emphasizing the importance of technical data and supplier descriptions.

6. Ultimately, the Tribunal held that the differential duty demand, interest, and penalties were not sustainable. The impugned order was set aside, and the appeal was allowed in favor of the Appellant. The decision was based on the technical data provided by the overseas supplier and the failure of the revenue authorities to dislodge the classification assessed by the Appellant.

This detailed analysis showcases the thorough examination of the classification issue and the application of legal principles and precedents to arrive at a well-reasoned judgment in favor of the Appellant.