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2016 (3) TMI 655 - CESTAT MUMBAI

2016 (3) TMI 655 - CESTAT MUMBAI - TMI - Classification of coking coal - whether the product is other than “Coking coal” - validity of test report - Held that:- samples drawn by the department were not in accordance with IS436. The CSN on re-testing increased from 1 to 5 or 5.5. This does throw doubt on the method of drawing samples as well as the testing method and does not inspire confidence in the procedures followed. The Hon’ble Supreme Court in the case of Tata Chemicals Ltd. Vs. Commission .....

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the test reports were not handed over to the appellant immediately but were handed over after long periods. The delay assumes significance especially when the load port reports of testing by a reputed agency showed CSN of 1 and above. Commissioner has merely held that the appellant should have sought re-testing where the delay in handing over the test report was minimal and has not discussed the periods of delay but forget to consider that delay may lead to deterioration of the properties of co .....

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ppellant with his own supporting evidence. - The Commissioner ought to have appropriately justified his finding on the issue that if the MMR value in the load port report is acceptable, then the CSN value should also be acceptable. Also he does not discuss the issue in respect of consignments for which such exemption was claimed quantification of demand. He failed to discuss the point that in cases where the final invoice value is higher than the provisional invoice value, the former was ado .....

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TECHNICAL) AND MR. RAMESH NAIR, MEMBER (JUDICIAL) For the Petitioner : Shri V.K. Jain Advocate, with Ms. Manya Bharadwaj, Advocate For the Respondent : Shri V.K. Singh, Spl. Counsel ORDER PER : P.S. PRUTHI These appeals are against demand of duty on goods declared as coking coal , which on test by the Department, was found to be other than Coking coal . The dispute is regarding classification and rate of basic duty of customs. Period is from 01.03.2011 to 19.10.2012. 2. Coking coal is classifiab .....

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number (CSN) of more than 2 (explanation added to S. No. 68 in notification No. 21/2002 Cus. by Notification 21/2011-Cus. dt. 1.3.2011). (ii) From 24.03.2011 to 16.08.2011- Exemption i.e. NIL basic duty was also made available to Coal having swelling index or crucible swelling number (CSN) of 1 and above and mean reflectance of above 0.60, for use in the manufacture of iron or steel using Corex, Finex or PCI technology. This was subject to the condition that the importer follows the procedure s .....

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8.2011 read with corrigendum dated 25.08.11 ) 3. Appellant imported goods declared as corex coal and sought benefit of NIL basic customs duty in terms of Sl. No 68 to notification number 21/2002- Cus. The goods were provisionally assessed pending test. Samples were drawn and sent to the Customs Lab in Goa Custom House. On test, the CSN of the goods covered under these appeals was found to be 0 . Hence assessment was finalized denying the benefit of exemption and reclassifying the goods under t .....

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which are covered by 15 different Orders-in-Original, benefit of Customs exemption available to coking coal in terms of S. No.68/66A of Notification 21/2002-Cus dated 1.3.2002,as amended, has been denied. 4.1. In each of the 15 consignments in question, the contract with its overseas supplier specifically provided that the coal being supplied should have a minimum CSN of 1. The load port test report from an independent third party agency also showed that the CSN was 1 or more in each of the 15 .....

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the time when the Bills of Entry were taken up for finalization. They could not seek re-test in view of the fact that due to weathering, the coking properties in the coal had been negatively impacted. Coking coal being perishable in nature, its properties deteriorate significantly with the passage of time. Relevant extracts of technical literature relied upon in this regard are as below: 1. Beneficiation of Weathered Coal by G.J. de Korte, Division of Mining Technology, CSIR. Where coal in inde .....

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t is particularly important to bear in mind that increase in oxygen content of about 1% suffice to totally destroy the caking property of prime metallurgical coal To prevent Oxidation of coal samples, it is suggested that temperatures during storage be kept as low as possible (though above 32 degree F) and the samples be stored in an oxygen free or substantially oxygen free atmosphere, or under water 3 Deterioration of Coking Coal Quality in Samples and Stockpiles by Dr. Ross Leeder, et al : Cok .....

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uality by altering the chemical and physical properties in coal, in particular the Calorific value is lowered and caking is eliminated. 4.3 Appellant had, in the course adjudication, also questioned the manner in which samples were drawn, as also the method of testing adopted by the Chemical Examiner at the Customs laboratory in Goa. The adjudicating authority held that it was not open for the appellant to question the manner of drawing of samples as the same had been drawn in the presence of th .....

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d, one of the parameters that was tested was the CSN. Once the coal had been approved for Corex purpose, agreements for purchase of coal from those specific mines were entered into from time to time. 4.5 In respect of Bills of Entry covered by Orders-in-Original No. 85, 86, 88, 89, 90, 92, the assessment had been finalized by the adjudicating authority by adopting the CIF value as mentioned in the provisional invoice, instead of taking the value from the final invoice. The Respondent has, in res .....

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rected the assessments. Bill of Entry No. 3440661 dated 9.5.2011 where the provisional invoice value has been taken at the time of finalization of the assessment instead of the final invoice value. 5. The contentions of Ld Spl Counsel Shri V K Singh are: Coal consignments covered in OIO number 80 to 86/2013 DC(A) dated 30.09.2013 and in four Bills of entry in OIO number 98/2013 DC(A) dated 30.09.2013 (Appeal number C/86355,61/14 and C/86372/14 Cus Mum have been imported prior to 16.08.2011. Betw .....

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of principles of natural justice because the respondent failed to avail the opportunity of cross examination. Reliance is placed on the judgment of Honble Apex court in the case of Commissioner of Customs New Delhi vs Punjab Stainless steel Industries 2001(1320 ELT 16 10 (SC) and Honble Madras High Court judgment in the matter of Shree Ganesh Steel Rolling Mills Ltd vs Astt Commissioner of Cus Chennai 2006(132) ELT 76. 5.2. As regards non-calculation of differential duty on the basis of final .....

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results showed CSN values lower than those determined at load port as well as in-house by the appellant. In one particular case of Bill of Entry No. 7315865 dt. 6.7.2012 regarding imports at Marmagoa, on re-testing at CRCL Delhi, the CSN was found to be same as that of the test report of Customs Lab Marmagoa. The period of this import (July 2012) is close to the periods in respect of consignments covered by the 19 appeals. 5.4. The test reports had been made available to the appellant in respect .....

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wn in accordance with IS 436. In the case of Tata Chemicals Ltd. Vs. Commissioner of Customs (Preventive) 2015 (320) ELT 45 (S.C.), the Hon ble Apex Court observed that It is common ground that the samples so drawn had not been in accordance with IS436 . The Commissioner ought to have given his finding as to whether the analysis done in Custom House Laboratory as per IS 1350 and IS 1353 were appropriate or whether IS436 should been followed for drawl of samples. The letter from the chemical exam .....

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issal of this fact by stating that the CSN value was still less than the value of 7 & 8 determined in-house by the appellant in respect of those consignments. The fact remains that the CSN on re-testing increased from 1 to 5 or 5.5. This does throw doubt on the method of drawing samples as well as the testing method and does not inspire confidence in the procedures followed. 6.2. We note that the Hon ble Supreme Court in the case of Tata Chemicals Ltd. (supra) held that the words deems it ne .....

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ng periods. The delay assumes significance especially when the load port reports of testing by a reputed agency showed CSN of 1 and above. Commissioner has merely held that the appellant should have sought re-testing where the delay in handing over the test report was minimal. The Commissioner has not discussed the periods of delay. Whereas the Ld. Advocate has submitted sufficient technical material to support the contention that delay may lead to deterioration of the properties of coal includi .....

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he appellant with his own supporting evidence. 6.4 A contention raised by the appellant was that the MMR had not been tested by Customs and therefore, apparently, the MMR value in the load port report has been accepted. The contention appears to be that if the MMR value in the load port report is acceptable, then the CSN value should also be acceptable. The Commissioner ought to have appropriately justified his finding on this issue. 6.5 We also note that exemption was claimed by the appellant, .....

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