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2017 (2) TMI 708 - AT - CustomsClassification of imported goods - Brass Honey Scrap - Held that - in view of the divergent reports of different Chartered Engineers, the position with regard to classification of impugned goods was not free from doubt. Thus, in such a case, the Department should have extended the benefit of favorable report submitted earlier to support the classification declared by the appellant. The appellant had specifically requested the Id. Commissioner (Appeals) for cross examination of Shri M.N. Mathur, but the request was turned down on the ground that cross examination cannot be claimed as a matter of right under Section 124 of the Customs Act, 1962. Since, the appellant has been denied with its rights to cross-examine the expert, his report cannot be relied on for assessment of the Bill of Entry, which is contrary to the claim of the appellant. Appeal allowed - decided in favor of appellant.
Issues:
Classification of imported goods under Customs Tariff Act, 1975 based on conflicting reports by Chartered Engineers, violation of principles of natural justice by denying cross-examination of expert witness, reliance on expert report by Department for assessment without considering earlier reports, imposition of duty, confiscation of goods, and penalties. Analysis: Classification of Imported Goods: The appellant imported Brass Honey Scrap but faced a discrepancy in classification by the Department, leading to conflicting reports by Chartered Engineers. The Department classified the goods as 'Mixed Brass and Copper Scrap' based on the report of Shri M.N. Mathur, disregarding earlier reports. The Tribunal found that the standing of Shri Mathur was questionable as he was not an expert in the field of metals. The Tribunal cited the Indian Evidence Act, stating that Mathur's report could not be considered expert testimony. Referring to legal precedents, the Tribunal emphasized that when two opinions are possible, the benefit of doubt should favor the assessee. Therefore, the Tribunal held that the classification based on Mathur's report was not reliable, and the appellant should be given the benefit of the doubt. Violation of Principles of Natural Justice: The Tribunal noted a violation of natural justice as the appellant was denied the right to cross-examine Shri Mathur, the expert witness whose report influenced the classification and assessment of the goods. Citing a Supreme Court judgment, the Tribunal highlighted that denying cross-examination of a witness amounts to a violation of natural justice. The Tribunal concluded that since the appellant's request for cross-examination was rejected, Mathur's report could not be relied upon for the assessment. The Tribunal referred to legal precedent to support its decision and emphasized the importance of upholding principles of natural justice in such cases. Reliance on Expert Reports: The Tribunal criticized the Department for not considering earlier reports by experts in the field of metals and solely relying on Mathur's report for classification. The Tribunal found that the earlier reports were discarded without proper justification, and the Department should have given weight to the favorable reports submitted earlier by other experts. By not considering the earlier reports, the Department's decision to rely solely on Mathur's report was deemed unjustified. The Tribunal emphasized the need for a fair and thorough assessment process based on all available expert opinions. Conclusion: In conclusion, the Tribunal set aside the impugned order, allowing the appeals in favor of the appellants. The Tribunal found that Mathur's report could not be relied upon for the change in classification, confirming duty demand, confiscation of goods, and imposition of penalties. The decision was based on the lack of expert credibility, violation of natural justice, and the failure to consider all relevant expert opinions in the assessment process. Note: The judgment was pronounced on 09.01.2017 by the Appellate Tribunal CESTAT NEW DELHI, with Mr. S.K. Mohanty and Mr. Ashok K. Arya as the Members. The legal representatives present during the proceedings were Mr. Jatin Mahajan for the Appellant and Mr. K. Poddar for the Respondent.
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