2023 (6) TMI 1259 - GUJARAT HIGH COURT

Maintainability of appeal - import of Superior Kerosene Oil (SKO) or not - prohibited goods or not - discharge of burden of prove - re-testing of the samples - mis-declaration and mis-classifications of goods - absolute confiscation - penalty - HELD THAT:- It is required to be noted that whether the subject goods fall within one category or other would essentially be a question of fact. However, even while deciding the same, if the Tribunal overlooks certain basic principles of law applicable to the case on hand and records a finding which could be termed as perverse, then definitely, such decision of the Tribunal would give rise to a question of law.

In the case of Rajkamal Industrial Pvt. Ltd. [2022 (2) TMI 264 - GUJARAT HIGH COURT], this Court held Where the determination of an issue depends upon the appreciation of evidence or materials resulting in ascertainment of basic facts without application of any principle of law, the issue raises a mere question of fact.

In the present case, to arrive at the conclusion that the product is SKO, there are eight parameters which need to be tested. As per the Test Report, three parameters were tested. However, the Test Report of the Chemical Examiner categorically suggests that the goods imported by the importer are meeting with the specification of Kerosene - In the case of Rajkamal Industrial Pvt. Ltd., 14 parameters were tested and on the basis of the report submitted by the concerned laboratories, this Court has, after applying the principle of “reasonable doubt” and “preponderance of probability” quashed and set aside the order passed by the learned CESTAT and the Tax Appeals filed by the Revenue were allowed.

The appeal is admitted for considering the following substantial questions of law:

(i) Whether the Tribunal was right in holding that the Department has not discharged the onus to establish the cargo as Superior Kerosene Oil (SKO)?

(ii) Whether in the facts and circumstances of the case, the CESTAT was correct discarding Chemical Examiner’s Report as inconclusive, especially when the importer had not sought re-testing of the samples before the Original Adjudicating Authority or during investigation?

(iii) Whether in the facts and circumstances of the case, the CESTAT was correct in setting aside the directions of absolute confiscation of Prohibited Goods under section 111(d), 111(m), 111(o) & 118 and penalty under section 112(a) of the Customs Act by the Adjudicating Authority, despite the mis-declaration and mis-classifications of goods?