TMI Blog2016 (9) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... e 12 (1) of Customs Valuation Rules, 2007, read with Section 14(1) of Customs Act - Held that: - The SPI classification for ‘base oil’ divides it into five groups based on three parameters.(i) Sulpher %(ii) Saturates %(III) Viscosity Index. The chemical examiner has not indicated the first two characteristics, viz, sulphur % and saturates in his report. Reference has been made only to one of the three parameters mentioned in API. This limited approach to decide the mis-declaration is incorrect. At the most, the viscosity index may raise doubt in our minds that the imported goods may be base oil. However, to conclude that the imported goods were not PDO but ‘base oil’ and allege mis-declaration on the part of the importer only on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tillate Oil (PDO). The Revenue has not proved beyond doubt that the imported goods were not PDO. The chemical examiner has only indicated that the material has the characteristic of base oil . On this basis, the imported goods cannot be said to be mis-declared, since the PDO, which arises prior to base oil, would have some characteristics of base oil . (ii) The Commissioner has not permitted Cross Examination of the chemical examiner. In the absence of cross examination, the report of chemical examiner is not admissible. (iii) The CRCL, where the sample was tested, in earlier cases, have given positive test report for PDO. However, in the present case, they have not given a categorical report. The benefit of doubt should be given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kinematic Viscosity @ 40 0 C 118.7 CST 95.526 CST Kinematic Viscosity @ 100 0 C 12.3 CST 10.59 CST Viscosity index 93 92.58 Total Acid Numbers (TAN) mgKOH/gm) 0.02 Nil Total base numbers (TBN) mgKOH/gm Nil Nil It has the characteristics of base oil. Note:- As per technical in the available in this laboratory no product in this name of pressed distillate was found. 5. The Commissioner in the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration on the part of the importer, the Commissioner proceeded to disregard the declared value of the imported goods in both the B.o.E. @ US$ 250 /MT of PDO. The Value of the imported goods in both b.o.e. s was steeply enhanced to US$ 940/MT, on the basis of the price at which base oil was imported vide B.o.E. no 9156907 dated 29-01-2013 filed at ICD, Tughlakabad by M/s.Mangali Enterprises Ltd., and the appellant was charged with demand of differential duty. Penalties were also imposed on the importer as well as other persons involved in the import. 7. On careful consideration of all the materials before us, we find that the chemical examiner s test reports are crucial in this case. In the reports (para 4 supra), we find that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cientist F. Retired), Indian Institute of Petroleum, Dehradun and (ii) Shri F. R. Khan, Principal Govt. Polytechnic, Ghaziabad. The above technical literature is useful to us only to the limited extent to understand that PDO is a product known in the lubricating oil industry and that it is an intermediate product arising in the manufacture of base oil . 9. Now we turn to technical literature advanced by the Revenue in the form of American Petroleum Institute classification for base oil (para 5- supra). The SPI classification for base oil divides it into five groups based on three parameters. (i) Sulpher % (ii) Saturates % (III) Viscosity Index 10. From the examiner s test reports, we find that the viscosity index of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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