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TMI Blog2018 (12) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... has observed that the appellant had wrongly availed the benefits of concessional rate of duty under Notification No. 19/1994-Cus in as much as the exemption under subject Notification was specifically for the Coking Coal of Ash Content below 10.29%. Accordingly, the SCN dated 15.05.1998 was issued to the appellant for recovery of differential Customs duty which was adjudicated Vide Order in Original wherein the differential Customs Duty was confirmed. Being aggrieved by the said Order in Original, the appellant filed appeal before Commissioner (Appeals) which came to be rejected, therefore, the present appeal. 2. Shri. P. P. Jadeja, Ld. Consultant appearing on behalf of the appellant submits that the appellant had entered into the agreement dated 27.12.1994 for import of 15.00 MT "Weak Coking Coal" with detailed specification and pre-shipment examination by independent Surveyors SGS with internationally credible and to import carried out pre-shipment inspections/analysis. As per the specification communicated by supplier to the appellant the goods description is Weak Coking Coal of ash Content 10 % maximum. He submits that as per Certificate of sampling and analysis issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h no regard whatsoever to IS: 436. That IS: 436 would apply but if the methods of testing of any items of the Central Excise Tariff are not mentioned that Indian Standard Institution Method should be apply. That these would apply to Customs Act, as well. He submits that OIO denied exemption on the ground that Chemical Examiner's Test Report shows goods as "Coal having ash content 10.29 %", whereas exemption is available to "Coking Coal having Ash content less than 12 %. The OIA is on the basis that imported coal is not used for manufacture of "Coke" in Materlogical Industry; therefore, it is not coking coal. He submits that expression "Coking Coal" used in exemption Notification No. 19/1994-Cus is a genus and would cover within its ambit different species thereof such as prime/hard coking coal, semi-hard coking coal, medium coking coal, soft coking coal, semi-soft coking coal, weak coking coal etc. He placed reliance on the Ministry of Coal Notification defining Coals other than coking or semi-coking or weakly coking coals as non-coking coals. The coal Directory of India also contains the very same definitions of semi coking and weakly Coking Coal. He submits that exemption to coki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ricoh India Ltd 2009 (247) ELT 433 (Tri.Mum) * Sah Petroleums Ltd 2009 (246) ELT 716 (Tri.Mum) 5. Sh. A. Mishra, Ld. Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He further submits that as per the test report No.65-Cus/97 dated 20.06.1997 of CRCL, New Delhi, it is clear that the goods imported is coal and not weak coking coal, therefore, the benefit of exemption was rightly denied to the appellant. 6. We have carefully considered the submissions made by both the sides and perused the records. We find that the whole issue to resolve is whether the goods imported by the appellant is weak coking coal having Ash content below 12% and consequently eligible for exemption notification 19/94-cus dated 01.03.1994, which is reproduced below: Effective rates for certain specified goods falling within Chapter 27 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of the Table hereto annexed and falling under the heading No. or sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Ash content is 10.29%. There is no dispute that the weak coking coal is also specie of coal ash content being 10.29% is well within the parameter prescribed in the entry Serial No of the notification i.e. below 12%. It can be seen that as per above report the remark of the chemical examiner regarding not mention of specification of weak coking coal is with reference to technical literature, it is nothing to do with actual analysis of coal conducted by the chemical examiner. Therefore, the report does not confirm that the goods imported by the appellant is not weak coking coal, therefore, only on the basis of the test report it cannot be concluded that the coal imported by the appellant is not weak coking coal. The department has nothing on record except aforesaid report to conclude that the coal imported by the appellant is not weak coking coal. Therefore, as regard the contention of the department that the coal imported by the appellant is not weak coking coal as per the test report is not correct, as the reports does not specifically gives the result that the coal is weak coking coal or otherwise. On the contrary, as per the certificate of Samples analyzed at the time of boardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the coal is less than 12%. 3. It is seen that at the time of filing of bill of entry, the appellant produced certificate of quality issued by the supplier of the goods at Indonesia and produced by them at the Load Port, certificating the Ash Contents in the coal to be 9.98% (Air Dried) in accordance with ASTM capital method. At the Discharge Port, samples were again drawn for every 2000 Metric tones of the said goods discharged by M/s. SGS India Ltd., who also conducted the tests and vide their test report dated 25.04.97 have certified the Ash Content as 10.20% (Air Dried). 4. The bills of entries so filed by the assessee were assessed provisionally. The Customs House at the Discharge Port drew samples and sent the same to the Customs House Laboratory, Kandla. The test report of the said laboratory showed the Ash Contents as being 14.4%. As the said laboratory suggested that samples be tested by Central Fuel Research Institute, Dhanbad, the same were sent to the said laboratory who by their test report dated 13.7.98 reported the Ash Contents to the tune of 13.2%. Based upon the result of the above two test reports conducted by Customs House Laboratory, Kandla and Central F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand the two reports produced by the Revenue are contrary to each other in as much as in the Customs House Laboratory, Kandla test report the Ash Contents has been shown as 15.9%, whereas the Dhanbad Laboratory has shown the same to be 13.2%. As such the decreased Ash Contents as shown by Central Fuel Research Institute, Dhanbad, as compared to the Ash Contents shown by Kandla Laboratory lead to only one fact that the said two reports are not reliable and should not be made the basis for confirmation of demand against them. He has also relied upon various Tribunal decisions to support his above pleas. 8. Countering the arguments learned SDR, Shri Rajendra Nagar, draws our attention to the impugned orders and submits that the authorities below have correctly relied upon the report of the Chief Chemist of Customs House Laboratory as also the Central Fuel Research Institutes report. The cross examination conducted by the appellant has nowhere established that the said reports were not correct. To challenge the said reports based upon the method of drawing of samples or on the basis of the time gap is not appropriate. He further submits that in as much as Ash Content was one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report a suggestion was made to send the sample for further testing to Central Fuel Research Institute. Accordingly, the sample was sent and a report was received from the said institute on 13.7.1998 i.e. almost after 10 months from the report of the chemical examiner. As per the said report moisture on air dried basis was to the extent of 9.5% and Ash on air dried basis was to the tune of 13.2%. It was disclosed in the said report that "sampling not done by CFRI". Further, the said report carried remark to the effect that "the quantity of the sample is not representative as per IS:436 (Part-1/ Sec-I) -1964 (Part-II)-1981." 11. The above two reports are the basis for denial of exemption notification to the appellant. As such the sole question is as to whether the said two test reports can be held to be reliable and more effective than the two certificates of Load Port and M/s. SGS India Lit., which are in favour of the assessee. 12. Learned advocate has drawn our attention to the various discrepancies so as to submit that the said two reports do not reflect the correct position. Apart from the fact that the sample was kept by the Revenue with them for a period of four months be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done in accordance with IS:436. There is nothing on record to show that the sample was drawn in accordance with IS:436. On the other hand the test report of CFRI shows that the quantity of the sample was not representative as per IS:436. In such a situation, can it be said that the samples were drawn in accordance with the law and the test was done accordingly. In fact we note that ISI prescribes standards for testing coal for its Ash Contents in IS:1350. Neither the report of the chemical examiner nor CFRI states that the said method of testing as prescribed in IS:1350 was adopted by them. On the other hand we have the Load Port certificate, certificating that samples were analyzed in accordance with ASTM method. Chemical examiner in his cross examination has accepted that ASTM method is one of the recognized methods for testing the samples. The cross examination of the inspector conducted during the course of adjudication also revealed that the sampling was not done in accordance with the ISI standards. 14. The appellants vide their letter dated 18.09.98 submitted that the test reports at the Load Port as also at the Discharge Port has been done by the internationally renou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the sample was not representative as per ISI standards, further places the said report under doubt. The infirmities in the two said reports do not prompt us to place reliance upon the same and to hold that they reflect the correct Ash Contents. 17. We would also like to discuss here the Tribunals judgment in the case of Commissioner of Customs, Ahmedabad Vs. TATA Chemicals Ltd. reported in 2004 (177) ELT 1038 (Tri. Mumbai), strongly relied upon by the learned DR. We have gone through the entire judgment very carefully. In para 8 of the said judgment, it stands observed by the Tribunal that the respondents (as it was Revenues appeal) failed to produce any other report except the one given by foreign surveyors to disapprove the results communicated by the department. In the present case we find that apart from the Load Port report there is GGS report also in favour of the assessee. Further, in para 18 it was observed that the method adopted for testing was gross air dried method which was adopted at the Load Port as also at the Port of Discharge and was universally recognized method of testing the Ash Content. In the present case though the two reports show the testing as air dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In view of these judgments, the finding of the Commissioner (Appeals) regarding "end use" is incorrect and not acceptable. We also gone through the judgment of Hon'ble Supreme Court in the case of Gujarat State Fertilizer Co. (Supra) wherein the Apex Court held that the fertilizer is of genus which may consist of various species of fertilizer namely, chemical fertilizer, soil fertilizer, animal or vegetable fertilizer as seen from description of various type of fertilizer found in chapter 31 of Central Excise Tariff Act, 1985 it was held that interpretation of expression under the Notification has to be given its due effect. Applying the ratio of above judgments in the present case, exemption is provided to weak coking coal which is genus of all coking such as prime/hard coking coal, semi-hard coking coal, medium coking coal, soft coking coal, semi-soft coking coal, weak coking coal etc. therefore, merely because the chemical examiner does not mention in the test result that whether it is a weak coking coal or otherwise, the exemption cannot be denied particularly when all other documents clearly establish that the coal imported by the appellant is weak coking coal of Ash conten ..... 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