TMI Blog1999 (1) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 20-3-1990 as amended. The whole of auxiliary duty of Customs was exempted on Sr. No. 17, Chapter No. 27 Coke with Phosphorous content of 0.035% or below; for manufacture of Pig-iron, vide Notification dated 14-3-1991 under No. 23/91-Customs, as amended. The whole of additional duty of Customs was also exempted on 27.04 Coke, vide Notification No. 36/90-Customs, dated 20-3-1990. The importers paid customs import duty at the rate of 40% ad valorem for Rs. 9,98/241/-, without availing the partial exemption, but availed full exemption of Auxiliary duty and Additional duty of Customs. The Bills of Entry referred above were assessed provisionally on 23-6-1991 for Chemical test result of the samples drawn. The National Test House, Alipore, Calcutta, under Test certificate No. CO(c) 91/9, dated 16-3-1992 reported; Phosphorous content by Mass=0.041 per cent; which exceeded the permissible limit of below 0.035% for granting exemption from the whole of Auxiliary duty of Customs by mass. The Central Fuel Research Institute Dhanbad, Bihar under Analysis report No. TU/AR/221/91, dated 27-9-1991, reported Phosphorous (on Coke) 0.023%. Therefore, auxiliary duty of Customs was leviable and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be more than the limit prescribed in the exemption notification. The reliance of the test report of National Test House, Alipore, Calcutta by the Assistant Commissioner is proper. The test result on the samples drawn by the respondent association tested through the same laboratory also indicates the same remarks as in red cloth packet . The test result of Dhanbad Laboratory in respect of samples drawn by the Respondent is also duly affixed with the same stamp and remarks as available on the test result of the samples drawn by the department. Thus, samples, drawn by the department. Thus, samples, drawn by the Respondents are not having any evidentiary value and the test report in that regard cannot be accepted, as a valid one. Notification should be interpreted on the basis of the language used therein and not on the basis of the intendment or by supplying words or ignoring them, for which there is no scope for any addition to its language or for taking away anything which is specifically provided in such notification. The words air dried basis are not available in the exemption Notification No. 23/91-Cus., dated 14-3-1991. The cumulative reading of the wordings of the exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e levy of Customs and exemption from Customs duty is applicable on the goods imported into India. The SGS certificate from Australia was based on the sample which was not drawn by the proper officer of Customs and were also not duly sealed by Indian Customs. The test report from a foreign country cannot be relied upon. The impugned order relying on such report is not proper and correct. The exemption notification is not interpreted in true spirit and the evidence is not properly appreciated, and the impugned order hamper the well settled principles of assessment as framed by law from time to time, and is based on assumption and presumption and deserves to be set aside. 3. The ld. Sr. Counsel appearing for the respondent has strongly supported the impugned order, and has analysed the whole case in the light of the material available in the case. The respondent is an association incorporated since 1972, and have tried to solve the problems of the members with the different Government authorities, and it deals with the import of the raw material from the concerned companies at the competitive rates, and distributes to the members at a landing cost + overseas expenses. The motive is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is produced to show that the test was defective. In the absence of it, not taking action immediately on the said report goes against the department. The time limit for issue of show cause notice starts from the date of test result is finalised. The show cause notice now issued without any allegation of suppression of facts etc. is clearly barred by time. When there are two contrary reports on the same samples the report which is fevourable to the party should be accepted, and not the other way, that is fevourable to the department. So on this count the demand made under the show cause cannot be upheld. The respondents cannot be denied the benefit of Notification No. 23/91, dated 14-3-1991 when the test report on the samples drawn by the Inspector of Customs shows the phosphorous content less than 0.035%. The test report given by the National Test House and CFRI, Dhanbad on the samples supplied by the respondents and the test result given by the CFRI, Dhanbad and the samples supplied by the department are only the reliable result. The 16-3-1992 test report of the National Test House, Alipore, Calcutta does not pertain to the samples drawn by the Inspector of Customs out of import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mple sent cannot be representative sample of entire cargo weighing 10450 M.T. Result and such sample cannot be relied upon. The test report obtained during the 1991 has to be considered in this case as the respondent has imported the metallurgical coke only in that year, and not either prior to or subsequent to it. The affidavit of the Secretary of the association of the respondent filed, clarifying the test certificates of National Test House, Calcutta, Central Fuel Research Institute, Dhanbad are based on the samples drawn by the respondents, and also the test report and the certificate supplied by the supplier from Australia, supports the case of the respondent that the metallurgical coke imported by it has the phosphorous contents, less than 0.035%. Even the test result based on the samples given by the department supports it. As against the solitary test report of National Test House, Alipore, Calcutta on which show cause notice is issued, there are 4 test reports supporting the case of the respondents. 5. Further the test report given by Shri B.N. Ghosh challenged by confronting him in the cross examination with the certificate of Prototype Development and Training Centre, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. dated 6-6-1991, CFRI, Dhanbad dated 24-7-1991 in favour of the respondents and its certificate dated 25-7-1991 issued to the Inspector Customs, and the test certificates of National Test House, Alipore, Calcutta the Bills of Entry of metallurgical coke 10 in number dated 15-6-1991, and the contract with minement USA dated 7-3-1991, and the cross examination of the witnesses, and the written submissions, and the orders of the lower authorities, and the appeal memorandum and the copy of the Notification No. 23/91, dated 14-3-1991 and No. 267/92-Cus., dated 3-9-1992. Also perused Section 144 of the Customs Act and relevant pages of IS 1350 (Part 5, 1979 and of IS:436 Part II) 1965 regarding the method for sampling of coal and coke revised, regarding sampling of coke of 1976 79, and also the affidavit dated 26-2-1994 of Ashwin Mehta of Honorary Secretary of the Respondents. The effect of phosphorous content on the composition of coke is a material factor to the case as per the finding given by the Collector in the impugned order, for the availment of the benefit of concessional notification for auxiliary duty in the imported metallurgical coke. Section 144 of the Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate of National Test House, Alipore is issued after more than six months of the receipt of the sample on 30-7-1991, after the subsequent correspondence ending with letter dated 3-2-1992 received from the Inspector, Customs, Navlakhi Port. The Coke is having volatile matter which plays a great role in the context of variation in the percentage contents in the items of contents present in coke if lying exposed for a long period in a varied weather condition. The two certificates issued by National Test House, Alipore, Calcutta with an interval of 5 months in this case, when compared, shows the variation in the percentage in the items of contents, due to the factor like human eyes reading and weather condition. Some degree of allowance has to be given. The percentage favourable to the respondents has to be applied. There are 5 test reports in this case out of which only one belatedly issued certificate shows the phosphorous content at 0.041% in the metallurgical coke, and it cannot be considered for levying auxiliary duty. Merely because of the different conclusion, it is not permissible to select the conclusion which suits the authority to levy the duty. So the demand has to be wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may pending completion of the test or inquiry or production of document or furnishing information assessed provisionally the importer or exporter furnishes such security deemed fit for the payment of defficiency if any between the duty finally assessed and the duty provisionally assessed. Sub-clause (2)(a) deals with the adjustment of the amount paid in the case of goods cleared for home consumption or exportation against the duty finally assessed. 11. So the reading of the above provisions, clearly supports the contention of the respondents in this case it is complied. From the show cause notice it is clear that the respondent has paid the customs basic duty and claimed exemption under the Notification No. 23/91, dated 14-3-1991 of the payment of auxiliary duty. So under such circumstance question of adjustment doesn t arise because, the duty paid, and duty claimed are different. An opportunity is given to the respondents and is heard. So the requirement of Section 18(3)(b) are complied in this case. The contention of the respondent contrary to it cannot be accepted and it is rejected. The respondent has challenged the demand on the grounds of time bar, as beyond six months from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard does not hold gold. 13. Now coming to the merits of the case, the entire case depends upon the result of the various test reports either to demand duty or to avail exemption benefit of the Notification No. 23/91-Cus., dated 14-3-1991 regarding auxiliary duty of customs. As per the facts of the case, material available on record, and the observation in the order of the lower authority, only 16-3-1992. Test Report based on the sample sent by the Inspector of Customs in July, 1991 shows phosphorous content of 0.041% in the metallurgical coke imported by the respondent Association, which deprives the respondent of the benefit of exemption under Notification No. 23/91-Cus., dated 14-3-1991, which is upheld in the order-in-original, as it complies all the requirement of procedure prescribed for taking samples, and testing under the literature available in this case. The impugned order has objected to it, on the question of sample sent when was not as prescribed, and long delay in testing it, and the correction of Test Result in the light of cross-examination of sender of samples and testing authority and also failure of Assistant Collector is not getting clarification and addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity and weight of 6-6-1991, and the report of National Test House, Alipore, Calcutta dated 16-3-1992 on the sample of department are the remaining material. First priority is for 16-3-1992 report. As per 26-6-1991 letter of Inspector of Customs, Navlakhi to Chemical Examiner, NTH, Alipore, Calcutta shows the sample drawn from mixed P.O in answer to Batch No. of containers, it is loose, and quantity it is approximately 2 kgs. I ti sunder No. TM No. 12, dated 26-6-1991, 16-3-1992 report, in reply to it, describes sample received on 30-7-1991 in a cloth bag described as matellurgical coke, without mentioning the quantity of sample received, and the (4) in the report nature of coke is non-caking. The test is limited for carbon items only as required by the department i.e. (1) Proximate Analysis : (a) Moisture Content per cent by Mass : 2.9 (b) Ash content per cent by mass : 11.4 (c) Volatile matter content, per cent by mass : 3.5 (d) Mixed Carbon content (by difference) : 82.2 (2) Caloritic Value : (a) Calories Per Gram : 6690 (b) B.TH.U Per Pound : 12.042 (3) Colour of Ash : Grey (4) Sulphur Total per cent by mass : 0.74 (5) Phosphorous per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be of equal weight. It is essential that the sample should be taken by not less than the stated number of increments regularly and systematically collected, so that the entire quantity of coke sampled is representated proportionately in the gross samples. Table under clause 2.3 is as follows : Size Grade of Coke Normal Size MM Minimum Number of Increments Minimum Weight of Gross Sample Hard Coke-large 150 to 38 50 240 Hard Coke rubble 38 to 25 50 120 Hard Coke Smothy 35 to 12.5 50 120 Under IS 1350 (Part V)-1979 Indian Standard Method of Test for coal and coke under Clause 3.1 Method shall be as prescribed in IS : 436 (Part I/Sec I)-1964 for coal and IS (Part II)-1965 for coke. 3.2 - sampling. 3.2.0 General : Shall be followed in the preparation of samples sent to the laboratory. Besides the laboratory samples to be used for the analysis of coal and coke, special samples are recommended for moisture. 3.2.1 : The sample prepared in accordance with the above shall be received in sealed containers and shall consist of the following : (a) Analysis sample of about 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed in the impugned order, there is an abnormal day in testing the sample sent by Inspector of Customs in June, 1991 in March, 1992 for nearly 9 months, which is not properly explained delay for correspondence by the department is not satisfactory ground. As held in the impugned order even the drawal of sample by the Customs Inspector of the quantity of 500 gms. to 1 kg. out of 10450 metric ton of imported metallurgical coke is not in accordance with the specified procedure as narrated in detail in para 5 and 6. There is a lot of variation. Without replying by the National Test House, Alipore, Calcutta to the Customs Inspector, about this lacunae, the test is conducted, limiting to carbon items only as required by the department. For Testing moisture content and volatile content, the quantity of sample in different increments, was required more for 10450 Metric Ton of metallurgical coke. The certificate of Director of National Small Industries Corporation Ltd. a Govt. of India undertaking has opined that the report is not as per specified standard on the ground that since the sum total of percentage of volatile metal, ash and fix carbon is not 100% and it is accepted by Shri B ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
