2009 (7) TMI 641 - AT - Customs

Chemical test report- M/s. Ashapura Minechem Ltd. Mumbai (AML) exported a consignment of Iron Ore Fines under Shipping Bill. The iron ore fines with Fe content above 62% attracts Customs Duty @ Rs. 300/- per MT and Cess of Re. 1/- per MT. According to the appellant AML it had paid Customs Duty @ Rs. 300/- per MT at the instance of the departmental officers. Vide letter dated 17-1-2008 AML were informed by the Assistant Commissioner Customs and Central Excise Nellore that as per the report of the Chemical Examiner on test of a sample of the consignment exported its Fe content was 63% and AML had paid Customs Duty at the applicable rate. The impugned order of the Commissioner (Appeals) affirmed the above communication as appropriate. Held that- The Tribunal had found that the opinion of Chief Chemist CRCL would prevail over that of any other expert in matters relating to classification of products resulting from chemical processes. In the instant case there is no opinion of the Chief Chemist; the goods involved for classification is iron ore and not a product of chemical processes. In these circumstances we remand the matter to the Original Authority to decide the matter afresh after giving the appellants a reasonable opportunity for presenting their case after furnishing them the relevant test reports.

Summary

Issues:
1. Correct classification of exported iron ore fines based on Fe content.
2. Allegation of forced payment of higher Customs Duty.
3. Reliance on test reports and violation of principles of natural justice.

Analysis:
1. The case involved the export of iron ore fines by a company, where the Fe content determined the applicable Customs Duty rate. The appellant contended they were forced to pay duty for Fe content above 62% despite test reports from reputable agencies showing Fe content below 58%. The Commissioner upheld the decision based on a report from the Chemical Examiner, which was not disclosed to the appellant. The Tribunal found a violation of natural justice principles as the report was issued after the initial communication, remanding the matter for a fresh decision.

2. The appellant argued they were compelled to declare higher Fe content due to authorities' pressure, leading to excessive payment of Customs Duty. Various reputable inspection agencies confirmed Fe content below 58%, contradicting the Chemical Examiner's report. The Tribunal emphasized the responsibility of customs officers to accurately assess goods, directing a reevaluation considering all test reports and ensuring the appellant's right to present their case.

3. The Tribunal critiqued the Commissioner's reliance on the Chemical Examiner's report over other reputable test reports, highlighting the lack of disclosure to the appellant and deviation from prescribed sampling methods. The decision to remand the case underscored the importance of natural justice, providing the appellant with an opportunity to present their case with access to all relevant test reports. The Tribunal emphasized the need for a fair and transparent process, setting a timeframe for the resolution to ensure timely justice delivery.