9911796707
TMI Blog2013 (8) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... were obtained during the stabilization of wet natural gas, immediately upon its extraction – Decided against assesse. Mis-declaration of goods – Confiscation Of Goods – Redemption Fine – Penalties u/s 111(a) - Whether there was a mis-declaration on the part of the appellants inviting confiscation, redemption and imposition of penalties upon the assesses under Customs Act, 1962 – Held that:- The penalties imposed upon the appellants under Section 111(a) of Customs Act, 1962 shall be restricted to the differential duty sought to be evaded after re-calculating the differential duty liability - The assesses had the knowledge of imported goods being good quality petroleum oil but the same was blindly accepted to be a crude oil condensate on the basis of statements given - all the assesses had knowledge of good quality petroleum oil which they agreed to be classifiable under CTH 2710 19 90 and accordingly confiscation of imported goods and imposition of penalties had been correctly made by the adjudicating authorities – When samples of imported goods were shown the same to be good quality petroleum oil and that they agree to pay differential duty - All other assesses who purchased the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ian of tank No. 106 i.e. GAPL, reported that as against manifested quantity of 5221 MTs shown in IGM as well as Bills of Lading, only 4722.042 MT was received in the said tank and a protest to this effect was lodged by them with the master of the vessel. 3.3 The above goods were sold to the following buyers on high sea sale basis who sought clearance by claiming classification of imported goods under CTH 2709 00 00 of First Schedule to CTA, 1975 attracting basic Customs Duty of 10% + Rs. 50 per MT towards National Calamity Contingent Duty (NCCD). S. No. High Sea Sale Buyer Bill of Entry & date Quantity as per Bill of Entry (MT) Quantity cleared (MT) Balance Quantity (MT) 1 Paswara Papers Ltd. F-95, dated 27-4-2004 172.040 750.000 Nil 2 Paswara Papers Ltd. F-144, dated 27-5-2004 500.000 102.660 69.382 3 Brahmand Chem. & Allied Indus., Buldhana (Mah.) F-90, dated 27-4-2004 500.000 335.190 164.810 4 Brahmand Chem. & Allied Indus., Buldhana (Mah.) F-133, dated 6-5-2004 500.000 Nil 500.000 5 Seven Oil Petroleum Pvt. Ltd., Taloja (Raigarh) F-89, dated 27-4-2004 500.000 132.350 367.650 6 Zaff Petrochemicals, Bandra, Mumbai F-88, dated 27-4-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our; IBP °C: 58.0; distillation upto 225°C was 2782% w/w; The sample was mixture of hydrocarbons; the analysis do not conclude the samples to be pure condensate or a mixture of condensate and kerosene; The distillation cuts collected at different temperature ranges does not match with either kerosene or the condensate, which were analyzed in their laboratory. 4. On 27-5-2004, the remaining goods lying with the custodian were seized and further investigations completed, leading to show cause notice dated 4-11-2004 which culminated into the adjudication order dated 27-12-2009. 5. Similar investigations were done for 507.737 MT condensate imported by M/s. Modern Chemicals, Paswara House, Baghpat Road, Meerut, which culminated into Order-in-Original No. KDL/Commr/17/2006, against which appeals No. C/800/2006, C/798/2006, and C/799/2006, have been filed on the same ground. 6. The main issues involved in these appeals are :- (i) What should be the correct classification of the imported goods declared as 'Condensate or Crude Petroleum Oil' or CPO imported by the appellants? (ii) Whether there was a misdeclaration on the part of the appellants inviting confiscation, redemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) that no grounds were given to reject the first test report dated 20-5-2004 on the basis of which initial clearance was allowed. (viii) that the request of the appellants for granting opportunity to cross examine the representatives of the labs, who rendered subsequent reports, was not allowed by the adjudicating authorities. (ix) that as per the subsequent RTI information obtained by the appellants those laboratories where subsequent testings were done did not have the equipments to test the goods imported. Appellants relied upon the judgment of Oil India Ltd. v. CCE, Shillong - 2002 (148) E.L.T. 802 (Tri.-Del.), which was maintained by Hon'ble Supreme Court as per 2004 (170) E.L.T. A116, and Tariff Advice No. 125/81, dated 17-11-1981. (x) On enhancing the assessable value, it was argued that no evidence in the shape of import documents of the alleged comparable imports made by M/s. Karnataka State Co-operative Marketing Federation, Bangalore was ever placed on record and/or supplied to the appellants. It was thus argued that in the absence of the above the declared value was enhanced without any basis. (xi) That no penalties can be imposed upon the appellants as Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued by Senior Advocate on the same lines as in other appeals fled by M/s. Paswara Impex Ltd. & others. As the issue involved in all the above appeals filed is the same, therefore, they are being taken up together through this common order. 11. The first issue required to be deliberated is as to what should be the correct classification of the imported goods described as 'Crude Petroleum Product' or 'Crude Petroleum Oil or Condensate'. The appellants have claimed that their imported goods merit classification under CTH 2709 whereas the Revenue is of the view that the imported goods are classified under CTH 2710 19 90 based on the chemical testing done from the agencies tabulated in Para 3.4 above. The Revenue has also relied upon HSN explanatory notes in support of their case. The relevant headings of Customs Tariff are reproduced below. 2709 00 00 Petroleum oils and oils obtained from another bituminous minerals, crude 2710 Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht fractions with a view to returning them to the oil-deposits in order to improve the drainage and maintain the pressure (6) The addition of only those hydrocarbons previously recovered by physical methods during the course of above mentioned processes (7) Any other minor process, provided it does not change the essential character of the product The heading also covers gas condensates, i.e. crude oils obtained during the stablisation of natural gas immediately upon its extraction. This operation consists of obtaining, mainly by cooling and depressurization, the condensable hydrocarbons (C4 to approximately C20) from the wet natural gas." 13. From the above HSN explanatory notes also, it is evident that Condensate hydrocarbon (C4 to C20 approx.) should be obtained from wet natural gas. No documentary evidence has been produced by the appellants that the goods imported (containing a mixture of hydrocarbons) are obtained during the stabilization of wet natural gas, immediately upon its extraction. 14. As per 14th Session of Scientific Sub-Committee Report dated 19-1-1999 relied upon by the appellant as well as the AR, the following paras of this report are very relevant :- "Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between natural gas condensates and similar products of heading 27.10, the Secretariat does not possess any precise information. It believes, however, that some Administrations have already had experience in this area. If so, such Administrations are requested to provide information on their experience or possible distinguishing criteria. Valid information in this regard could be added to the above definition or description." 15. A careful reading of the above report of the World's Technical Expert Committee will reveal that there could be natural gas condensates obtained from the wet natural gas and condensates of CTH 2910 which will have similar mixtures of hydrocarbons. Further, the highest body of experts in the world on the field is also convinced that it is very difficult to distinguish both categories of gas condensates of CTH 2709 and 2010. Under the circumstances, it cannot be possible for any testing organization in India without having adequate testing equipments to straight away opine whether a hydrocarbon mixture will be gas condensate or crude oil of Heading 2709 or similar gas condensates of CTH 2710. Moreover, a chemical testing laboratory/organization is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the goods imported by the appellants has to be under CTH 2710 and duties were required to be discharged accordingly. Our view is also supported by this Bench in its Order Nos. A/951-957/WZB/AHD/2011, dated 28-1-2011/6-6-2011 in the case of M/s. Pushpal Exports Pvt. Ltd. v. CC, Kandla. 17. So far as enhancing the assessable value on the basis of contemporary import value of M/s. Karnataka State Co-operative Marketing Federation, Bangalore is concerned, the adjudicating authority has held that value is required to be enhanced on the basis of relied upon contemporary imports. However, products like gas condensates are mixture of hydrocarbons from C4 to C20 and such products are not standard products. Moreover, the composition of such mixtures of hydrocarbons can vary greatly from source to source. There is no evidence that appellants have repatriated more value in addition to the transaction value paid to the supplier of the goods. The chemical test reports of the relied upon consignments are not made available to the appellants. In the absence of these factors, it cannot be appreciated that the relied upon imports were contemporary imports and will be sufficient to reject the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
