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2009 (8) TMI 439 - AT - CustomsWeak coking coal- Notification No. 11/97-Cus dated 1.3.1997- appellant imported Weak Coking Coal and filed a bill of entry on 4-4-97, declaring the Ash Content of the coal less than 12% and under the claim of benefit of concessional rate of duty in terms of Notification No. 11/97-Cus. The said notification granted concessional rate of duty, if the Ash Content in the coal is less than 12%. It is seen that at the time of filing of bill of entry, the appellant produced certificate of quality issued by the supplier of the goods at Indonesia and produced by them at the Load Port certificating the Ash Contents in the coal to be 9.98% (Air Dried) in accordance with ASTM capital method. The bills of entries so filed by the assessee were assessed provisionally. The test report of the said laboratory showed the Ash Contents as being 14.4%. As the said laboratory suggested that samples be tested by Central Fuel Research Institute, Dhanbad, the same were sent to the said laboratory who by their test report dated 13-7-98 reported the Ash Contents to the tune of 13.2%. Based upon the result of the above two test reports conducted by Customs House Laboratory, Kandla and Central Fuel Research Institute, Dhanbad, showing the Ash Contents to be more than 12%, the benefit of Notification No. 11/97-Cus., dated 1-3-97 stands denied to the appellant, with the resultant confirmation of demand of duty. The appellant submit that difference of content due to delay in testing. In the light of the various decisions held that- Having already examined that the evidences which weighed with the Tribunal to come to a conclusion in favour of the Revenue, are not available in the present case. In fact there are so many infirmities (long time gaps between drawal of samples and testing and retesting of the same, non-observance of IS procedure for drawing of samples, no indication showing ISI adoption of testing methods etc. and contradictions in the two reports) and the availability of favourable report, which lead us to discard the chemical examiners and CFRI report relied upon by the authorities below. In view of the above, we set aside the impugned orders and allow both the appeals with consequential relief to the appellant.
Issues Involved:
1. Denial of benefit of Notification No. 11/97-Cus. for imported Weak Coking Coal. 2. Confirmation of duty demand based on higher Ash Content as per Customs House Laboratory and Central Fuel Research Institute reports. 3. Reliability of test reports from Load Port and SGS India Ltd. versus Customs House Laboratory and CFRI. Issue-Wise Detailed Analysis: 1. Denial of Benefit of Notification No. 11/97-Cus. for Imported Weak Coking Coal: The appellant imported Weak Coking Coal and claimed a concessional rate of duty under Notification No. 11/97-Cus., which required the Ash Content to be less than 12%. The appellant provided a certificate from the supplier at the Load Port indicating an Ash Content of 9.98% (Air Dried) and a subsequent test by SGS India Ltd. at the Discharge Port showing an Ash Content of 10.20% (Air Dried). However, the Customs House Laboratory at Kandla reported an Ash Content of 14.4%, and the Central Fuel Research Institute (CFRI) later reported 13.2%, leading to the denial of the concessional rate. 2. Confirmation of Duty Demand Based on Higher Ash Content: The Customs House Laboratory and CFRI reports, showing Ash Contents of 15.9% and 13.2% respectively, were used to deny the benefit of the notification and confirm a duty demand of Rs. 24,97,477/-. The appellant argued that the samples were not tested immediately and were kept for an extended period, which could have affected the Ash Content. Additionally, discrepancies in the sampling methods and the time gap between sample collection and testing were highlighted. 3. Reliability of Test Reports from Load Port and SGS India Ltd. versus Customs House Laboratory and CFRI: The appellant contended that the Load Port and SGS India Ltd. reports, which showed Ash Contents below 12%, should be considered reliable. The appellant pointed out that the samples were not drawn according to prescribed standards, as admitted during cross-examination of the inspector and chemical examiner. The chemical examiner acknowledged that test results could vary based on the sampling process, sample itself, and test method. The CFRI report also noted that the sample was not representative as per IS standards. Findings and Conclusion: The Tribunal found multiple discrepancies in the reports relied upon by the Revenue. The significant delay in sending samples for testing and the lack of adherence to IS standards for sampling and testing were critical issues. The Tribunal noted that the Load Port and SGS India Ltd. reports were conducted using recognized methods and showed Ash Contents below 12%. The Tribunal also referenced previous decisions emphasizing the importance of following ISI methods for sampling and testing. Given the inconsistencies and procedural lapses in the Revenue's reports, the Tribunal concluded that these reports could not be considered reliable. Consequently, the Tribunal set aside the impugned orders, allowed the appeals, and granted consequential relief to the appellant. Pronouncement: The judgment was pronounced in court on 30-8-2009.
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