2015 (12) TMI 432 - AT - Customs

Waiver of pre deposit - bituminous coal - denial of the benefit of Notification No. 12/2012-Cus. Dated 17/03/2012 - Classification of coal - Held that - As per the explanatory Note 2 to Chapter 27, bituminous coal means coal having a volatile matter limit (on a dry, mineral-matter-free basis) exceeding 14% and a calorific value limit (on a moist, mineral-matter-free basis) equal to or greater than 5833 kcal/kg. Any coal satisfying the above definition would merit classification as bituminous coal under CTH 2701 12 notwithstanding the fact that the goods may be known otherwise in the commercial/trade parlance. As held by the hon ble apex Court in the case of Indo International Industries vs. Commissioner Of Sales Tax, Uttar Pradesh 1981 (3) TMI 77 - SUPREME COURT OF INDIA if any term or expression has been defined in the enactment, then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. In the present case, since the Customs Tariff defines bituminous coal by means of certain specifications and if those specifications are satisfied, the goods will have to be classified as bituminous coal only and not otherwise. - Partial stay granted.

Summary

Issues:
Classification of imported coal as bituminous coal under CTH 2701 1200, benefit of Notification No. 12/2012-Cus., differential duty demand, interest liability, penalty imposition, provisional release of goods, trade nomenclature vs. statutory definition of bituminous coal.

The judgment pertains to an appeal and stay petition against an Order-in-Original passed by the Commissioner of Customs, Central Excise & Service Tax, Panaji, Goa, confirming a differential duty of ` 1,00,55,335/- on 13000 MTs of imported coal classified as bituminous coal under CTH 2701 1200. The appellant, M/s. Millenium Steel India Pvt. Ltd., imported coal declaring it as steam coal under CTH 2701 1920, seeking the benefit of a concessional basic customs duty of nil under Notification No. 12/2012 dated 17/03/2012. The Customs department's investigation revealed characteristics of bituminous coal in the imported coal, leading to a show cause notice and subsequent confirmation of demands, interest, penalty, and provisional release of goods. The appellant contested the classification, arguing based on trade nomenclature, technical literature, gradation of non-cooking coal, and past imports treated as steam coal without objection from Revenue, seeking a stay.

The appellant's counsel argued that the product should be classified as steam coal based on trade nomenclature, gradation, functional utility, and predominant usage, challenging the department's computation of volatile matter content and gross calorific value. The appellant highlighted past imports declared as steam coal without objections from Revenue. In contrast, the Revenue's representative relied on the statutory definition of bituminous coal, emphasizing characteristics like volatile matter content and gross calorific value for classification. Referring to a previous Tribunal decision, the Revenue sought a pre-deposit of duty demand, considering the normal period of demand.

The Tribunal analyzed the definitions and specifications of bituminous coal under the Customs Tariff, emphasizing adherence to statutory definitions over commercial parlance. Citing legal precedents, the Tribunal held that if goods meet the defined specifications, they must be classified accordingly. Referring to a similar case, the Tribunal maintained a prima facie view that coal meeting specified characteristics falls under CTH 2701 12, not as steam coal. Considering lack of financial hardship evidence and a prima facie case for waiver, the Tribunal ruled in favor of Revenue, directing the appellant to make a pre-deposit of the entire duty demand within a specified period, with subsequent waivers and stay of recovery during the appeal.

In conclusion, the Tribunal upheld the classification of imported coal as bituminous coal under CTH 2701 1200, emphasizing adherence to statutory definitions, and directed the appellant to make a pre-deposit of the duty demand within a specified timeline. The judgment balanced legal interpretations, technical specifications, and past practices, ultimately ruling in favor of Revenue based on the absence of a prima facie case for waiver and financial hardship evidence.