2021 (11) TMI 517 - Commissioner - Customs

Classification of goods - Natural Abrasive - adjudicating authority rejected the declared description of Natural Abrasive and confirmed the classification as Natural Garnet and re classfied the goods under CTH 2513 2030 - Confiscation - penalty - HELD THAT - The export cargo was detained under panchnama dated 25.5.20 19 and samples were drawn from the live consignment and sent to CECL Vadodara. Test report received from CECL. Vadodara stated that the sample was pinkish red in colour coarse powder and composed of Silicates of Iron Aluminium. Calcium and that it had the characteristics of Garnet (natural almandine and Pyrope type). As it appeared that the goods meant for export were natural garnet and not Natural Abrasive as declared by the exporter the goods were placed under seizure on 31.5.2019. The appellant have relied upon Notification No. SO 2356 (E) dated 11.7.2016 issued under Section 11C of the Mines and Minerals (Development and Regulation) Act 1957 by the Central Government. Further reliance has been placed on the unstarred question No. 2879 answered on 10.7.20 19 in Lok Sabha by the Minister of State from the PMO. Since these were not covered in the impugned order comments were called from the adjudicating authority. However no response was received in the matter and therefore a reminder was sent for specific reply in the matter. However the adjudicating authority has not bothered to reply as yet. Hence remitting of the case has become sine qua non to meet the ends of justice. The appeal is remitted to the proper officer who shall examine facts documents submissions as discussed and then pass proper speaking order afresh following principles of natural justice and adhering to the legal provisions - appeal allowed by way of remand.

Summary

Issues:
Classification of exported goods as 'Natural Abrasive' or 'Natural Garnet', Confiscation of goods, Penalty imposition, Proper application of statutory notifications and legal provisions.

Classification Issue:
The appellant exported goods classified as 'Natural Abrasive' but were reclassified as 'Natural Garnet' by the adjudicating authority. The appellant argued that the goods were not produced from beach sand minerals, hence not subject to canalization through Indian Rare Earth Ltd. The Chemical Examiner's report was contested, claiming it did not conclusively prove the goods were from beach sand. The appellant cited previous exports of similar goods from a different port under the same Customs jurisdiction as evidence. The Commissioner remitted the case for re-examination due to lack of response from the adjudicating authority on statutory notifications and parliamentary answers cited by the appellant.

Confiscation and Penalty Issues:
The adjudicating authority ordered the confiscation of goods valued at Rs. 19,73,184 under Customs Act sections 113(d) and 113(i), with a redemption fine of Rs. 2,00,000 and penalties of Rs. 1,00,000 each under sections 114(1) and 114AA. The appellant contended that the reclassification caused wastage and loss of export value, emphasizing the legality of the export item's classification as a crucial point. The Commissioner's decision to remit the case for fresh examination implied no judgment on the merits, ensuring independent review by the proper officer following natural justice principles and legal provisions.

Statutory Notification and Legal Provisions Issue:
The appellant relied on Notification No. SO 2356 (E) and a parliamentary answer to support their argument regarding the classification of the exported goods. The lack of response from the adjudicating authority prompted the Commissioner to remit the case for re-examination, citing precedents allowing for such remands even after statutory amendments. The necessity for proper examination of facts, documents, and submissions was emphasized to ensure a fair and just decision in accordance with legal requirements.