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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 ..... n 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 the 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. From the report, it is clear that the coal imported by the appellant is weak coking coal having Ash content much below 12%. It is also observed that the entire agreement for import of coal is in respect of weak coking coal and not for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsignment declared in the import documents, the department 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the samples drawn are not in accordance with Law and drawn with 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj Petroleum Products Ltd 2013 (292) ELT 125 (Tri.Mum) 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 colum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Indian Standard Institution specification ISI: 1448 (P. 31) - 1968 as in force for the time being. From the above notification, at Serial No. 1 exemption is provided to coking coal of ash content below 12%. Accordingly, the coal imported by the appellant should confirm that the coking coal of ash content should be below 12%. The Revenue has decided the matter solely on the basis of CRCL, New Delhi test report No. 65-Cus/97 dated 20.06.1997. The said test report scanned below: From the above report it is observed that there is no dispute that the sample is of coal in which ash content is 10.29%. In the bottom of the report it is mentioned as, no specification for weak coking coal with respect to its physico-chemical properties are available in the technical literature. However in the chemical analysis result, it does not show that whether it is weak coking coal or otherwise. Therefore, the test report 65-Cus/97 only confirms that the sample is of coal and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is eligible for exemption notification 19/94-Cus. This identical issue has been considered in the case of Adani Export Ltd Vs. CC, Jamnagar 2010 (249) ELT 93 (Tri.Ahmd.), wherein the following judgment has been passed: Both the appeals are being disposed off by a common order as the same arise out of the same set of facts and circumstances. Appeal No.45/05 is against the order vide which the benefit of Notification No.11/97-Cus dated 01.3.97 stands denied to the appellant in respect of the Weak Coking Coal imported by them and appeal No.C/1206/05 is against the order confirming the demand of duty, as a consequence of passing of the first order. 2. As per facts on record appellant imported Weak Coking Coal and filed a bill of entry on 04.04.97, declaring the Ash Content of the coal less than 12% and under the claim of benefit of concessional rate of duty in terms of Notification No.11/97-Cus. The said notification granted concessional rate of duty, if the Ash Content 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals that the passage of time has the effect on the Ash Contents of the coal and as such the said reports cannot be relied upon. 6. He has further submitted that the cross examination of the inspector, who drew the samples reveals that the samples were not drawn in accordance with the prescribed standards, as he was not aware of the sampling methods prescribed under the relevant standards. In the cross examination of chemical examiner conducted before the adjudicating authority, he has accepted that the test results would vary depending upon the sampling process, the sample itself and the test method adopted by the testing agencies. As such he submits that the inconsistency in the Ash Contents is on account of inaccuracy in the sampling method as also on the basis of time gap and as such the said sample results cannot be relied upon. 7. He has further submitted that the two testing reports produced by the appellant conclusively established that the Ash Content in the said goods is below 12%. On the other 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 show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 10. It is seen that Revenue drew the sample on 25.4.1997 and the same was sent to Chemical Examiner, Customs House Laboratory, Kandla by the Superintendent under the coverage of letter dated 08.09.97. As rightly pointed out by the learned advocate though the samples were drawn in the month of April 1997, the same were sent for testing purposes in September 1997. There is no explanation coming from the Revenue as to why the samples were kept in the custody of the Revenue for a period of around four months. We further note that while sending the said samples to the chemical examiner the same were described as Low Ash Coking Coal whereas the goods imported by the appellant were Week Coking Coal. The report of the chemical examiner sent on 30.09.97 is as under: Report The sample is coal in the form of black coloured coarse powder. Ash.(ADB)15.9% whether it is Low Ash Coking Coal could not be ascertained here. The duplicate sample may be forwarded to Central Fuel Research Institute, Dhanbad . As is clear from above report a suggestion was made to send the sample for further testing to Central Fuel Research Institute. Accordingly, the sample was sent and a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word Week in Week Coking Coal pertains to coking properties of the Coking Coal whereas the word Low Ash in Low Ash Coking Coal pertains to Ash Contents. The two products could be same or otherwise depending on their parameters. He also clarified that there are many methods like ISI, ASTM etc. available for testing and a small variation is always possible in the results due to the person testing the sample, laboratory situation, instructions, variations etc.. He also accepted that the test results will depend on whether the sampling was proper and homogenous. In cases like Blended Thermal Coals such variations have been observed. He accepted that if sampling has not been done properly there is a likelihood of there being a difference in test results. As is clear from above depositions made by the chemical examiner the variation in Ash Contents would depend upon the method used and most importantly the drawing of sample. As we are all aware coal is in the form of huge and small lumps as also in powder form. The drawing of samples of coal is required to 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reports in the case of Commissioner of Customs, Ahmedabad Vs. Rajkot Engineering Association reported in 2000 (123) ELT 968 (Tribunal) it was observed that as the test result of National Testing House, Alipur was not made as per specified standards and sending of sample was not proper, the same cannot be held to be acceptable. Similarly, variance in the test results obtained from the chemical examiner and Chief Chemist were not appreciated by the Tribunal in the case of Commissioner of Central Excise, Madurai Vs. Ponjestly Filament (P) Ltd. reported in 2003 (154) ELT 629 (Tri. Chennai) and the test result of IIT New Delhi which was in terms of ISI standard and was got conducted by the assessee was held to be examined by the lower authorities. 16. As we have already observed that the drawing of the samples in accordance with the ISI and testing of the same in accordance with such standards is not forthcoming from the records. Even the two test reports which got conducted by the Revenue are at variance with each other. The remark of Dhanbad Laboratory showing that the sample was not representative as per ISI standards, further places the said report under doubt. The infirmiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng methods etc. and contradictions in the two reports) and the availability of favourable report, which lead us to discard the chemical examiners and CFRI report relied upon by the authorities below. In view of the above, we set aside the impugned orders and allow both the appeals with consequential relief to the appellant. From the above judgment, it is observed that the appellant s case is on much better footing inasmuch as the Ash content in adani s case as per the chemical examiner report was 13.2%, whereas in the present case even as per CRCL, New Delhi report the Ash content admittedly is 10.29 %. The above judgment of adani Exports was taken by the Revenue to the Hon ble Gujarat High Court by way of Tax Appeal No. 141 of 2010 which was dismissed by reporting as, CC Preventive Vs. Adani Exports Ltd, 2013 (295) ELT 678 (Guj.). In case of JSW Steel Ltd Vs. CC, C.EX. ST, Goa 2016 (343) ELT 717 (Tri.Bom), the coordinate Bench of Tribunal categorically held that no end use conditions are provided in the notification, therefore, the usage cannot be determining factor. In view of these judgments, the finding of the Commissioner (Appeals) regarding end use is incorrect and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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