2023 (10) TMI 248 - AT - Customs

Misdeclaration of export goods - Iron Oxide - goods are Iron Oxide Dry Powder, or Iron Ore? - to be classified under Tariff Item 2821 1010 or under Customs Tariff Heading 2601 1119? - violation of principles of natural justice - HELD THAT - It can be seen from the above test report that the consignments consisted of Iron Oxide and the only evidence on the basis of which it has been held that the subject consignments are of Iron ore/ concentrate by the Adjudicating Authority is Joint Director CRCL s letter dated 12.02.2016 which has neither been provided to the appellant nor that was existing at the time of issuing SCN - the Joint Deputy CRCL s letter not taken into cognizance as the Adjudicating Authority has failed to provide the same to the appellant and therefore has grossly violating the principals of natural justice following the principle of the natural justice. At the same time since the initially two reports clearly holds that export consignments are made of the Iron Oxide. There is no mis-declaration in the export consignments, the classification of the export consignment under the CTH 2821 1010 of the Customs Tariff Act is based on facts and there are no mis-declaration in this case. The impugned order in original and order in appeal are without any merit - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are mis-declaration of export consignment, classification under Customs Tariff Heading, reliance on test reports, violation of principles of natural justice.

Mis-declaration of export consignment:
The Department alleged mis-declaration of export consignment as "Iron Ore" instead of "Iron Oxide" under Customs Tariff Heading 2601119, based on a test report. However, subsequent test reports confirmed the consignments consisted of Iron Oxide with an iron content of 97.84%. The Adjudicating Authority's reliance on a report not provided to the appellant was deemed a violation of natural justice. The Tribunal held that mis-declaration charges were not established, and the classification under CTH 2821 1010 was correct.

Classification under Customs Tariff Heading:
The appellants classified their export product under Tariff Item 2821 1010 as Iron Oxide. The Department contended the consignments were "Iron Ore" under CTH 2601119, issuing a show-cause notice demanding duty at 30%. However, subsequent test reports confirmed the consignments were Iron Oxide, leading to the Tribunal's decision that the classification under CTH 2821 1010 was appropriate.

Reliance on test reports:
The initial test report and a subsequent clarification confirmed the consignments were of Iron Oxide with high iron content, contrary to the Department's view of them being Iron Ore. The Tribunal emphasized the importance of test reports in determining the nature of export products and concluded that the initial reports clearly indicated the consignments were Iron Oxide, leading to the dismissal of mis-declaration allegations.

Violation of principles of natural justice:
The Tribunal highlighted a violation of natural justice due to the Adjudicating Authority relying on a report not provided to the appellant, which played a crucial role in the mis-declaration allegations. The failure to provide essential documents to the appellant was considered a breach of natural justice, leading to the Tribunal setting aside the impugned orders.