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2023 (12) TMI 796 - AT - CustomsClassification of imported goods - Rubber Processing Oil (RPO) - classifiable under CTH 27101990 as claimed by the appellant or under CTH 2707 99 00 as per final assessment ordered by the department? - country of origin - Singapore or UAE where the appellant has not claimed any preferential rate of duty? - penalty - Enhancement of declared value twice. HELD THAT - The submission of the appellant is that test report of Customs laboratory, Kandla does not mention, the method adopted by customs laboratory for testing the sample. Therefore, the said test report cannot be qualified as evidence to decide the classification - as against the above test report dated 26.09.2012. The Quality Certificate No. TOP 2012/COQ-148 dated 02.08.2012 provided by the supplier M/s. The Oceanic Petroleum Source Pvt Ltd., Singapore shows aromatic content as 35.8 measured by adopting ASTM D2140 method. Moreover, accredited laboratory namely Geo Chem also vide report dated 06.10.2012 reported aromatic content is 35% and since 50% shown by the custom laboratory test report which does not mention method of testing sample, preference has to be given to the Geo Chem test report dated 06.10.2012 coupled with Supplier's quality certificate according to which the aromatic content being 33.08% - 35% is less than the non-aromatic content - the Rubber Processing Oil (RPO) is correctly classified under CTH 27101990. Country of Origin - HELD THAT - The appellant had placed order with Oceanic Petroleum Source Pvt. Ltd, Singapore, who had shipped the goods from Malasiya. The Country of origin was shown in the invoice as UAE. The same was held as Malasiya by the lower authority, by relying on statement of Shri Hemant Shah, Director of appellant - it is found that, it is submitted that the appellant has not claimed any preferential rate of duty on the basis of declaration regarding country of origin. Penalty - HELD THAT - Without going into the fact that, which is the correct county of origin, since the appellant has not claimed any concession on the basis of country of origin the issue is only of aromatic content and having no revenue implication. Therefore no consequential penalty is sustainable. Enhancement of the value of the imported goods twice, from USD 500 PMT(C F Kandla) to USD 531.500 PMT(C F Kandla) - further enhancement to USD 585 on the basis of the copy of invoice received from shipping agent - HELD THAT - Once the value was enhanced from USD 500 PMT to USD 515 PMT , which was accepted by the appellant. However, the value was further enhanced to USD 585 only on the basis of one invoice bearing No. TOP SPL /CP/34 dated 09.07.2012 produced by the shipping agent - the assessable value is determined by adding freight @20 % and insurance @ 1.125%. We find that the appellant tendered copy of Bill of Lading No. MYPKGINIXY517631 dated 12.07.2012 for the subject goods confirming that freight was pre-paid. Therefore, when the freight is pre-paid and inclusive in the price, there is no requirement to add element of freight @20% for USD 585. It is also observed that about the invoice produced by the shipping line, the appellant had no knowledge and it is not also known when such invoice was produced before custom authority at the port of export - enhancement of the value from USD 531 to UD 585 is without any basis and the same is not sustainable. The impugned order so far it is against the appellant is set aside and consequential penalty imposed on Shri Hemant Shah, Director is also set aside. Accordingly, the appeals are allowed
Issues:
1. Classification of Rubber Processing Oil (RPO) 2. Dispute about country of origin 3. Enhancement of declared value twice Classification of Rubber Processing Oil (RPO): The appellant classified the goods under CTH 27101990, while the department ordered final assessment under CTH 2707 99 00 due to a test report showing aromatic content above 50%. The appellant argued that the test report did not mention the testing method, and presented evidence showing lower aromatic content. The Tribunal found in favor of the appellant, classifying the RPO under CTH 27101990 based on the supplier's quality certificate and an accredited laboratory report. Country of Origin Dispute: The appellant ordered goods from a supplier in Singapore, but the invoice showed the country of origin as UAE, later determined to be Malaysia. As the appellant did not claim any duty concession based on the country of origin, the issue was deemed to have no revenue implication. Citing a previous Tribunal decision, the penalty for misdeclaration of country of origin was set aside. Enhancement of Declared Value: The value of the goods was enhanced twice, first to USD 531.500 PMT and then to USD 585 based on an invoice from the shipping agent. The Tribunal noted that the freight was prepaid and included in the price, making the additional freight charge unjustified. As there was no evidence of extra payment by the appellant, and no contemporaneous import at the enhanced value, the Tribunal found the second value enhancement to be without basis and unsustainable. The Tribunal set aside the impugned order against the appellant, including penalties imposed, and allowed the appeals with consequential relief.
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