Custom, Excise & Service Tax Tribunal
-Kolkata(Port) vs Neo Carbons Pvt Ltd on 23 February, 2023
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.1
Customs Miscellaneous Application No.75367 of 2022 (Stay)
(On behalf of Appellant)
In
Customs Appeal No.75817 of 2022
(Arising out of Order-in-Appeal No.KOL/CUS(Port)/AKR/342/2022 dated 02.08.2022
passed by Commissioner of Customs (Appeals), Kolkata.)
Commissioner of Customs (Port), Kolkata
(15/1, Strand Road, Custom House, Kolkata-700001.)
...Appellant
VERSUS
M/s. Neo Carbons Private Limited
.....Respondent
(14B, Canal Street, Kolkata, West Bengal-700014.) WITH Customs Miscellaneous Application No.75368 of 2022 (Stay) (On behalf of Appellant) In Customs Appeal No.75818 of 2022 (Arising out of Order-in-Appeal No.KOL/CUS(Port)/AKR/343/2022 dated 02.08.2022 passed by Commissioner of Customs (Appeals), Kolkata.) Commissioner of Customs (Port), Kolkata (15/1, Strand Road, Custom House, Kolkata-700001.) ...Appellant VERSUS M/s. India Carbon Limited .....Respondent (Temple Chambers, 4th Floor, 6 Old Post Office Street, Kolkata, West Bengal- 700001.) 2 Customs Appeal Nos.75817, 75818 of 2022 APPEARANCE Shri Manish Mohan, Authorized Representative for the Revenue Shri Sudhir Mehta, Advocate for the Respondent (s) CORAM: HON'BLE SHRI ASHOK JINDAL, MEMBER(JUDICIAL) HON'BLE SHRI K. ANPAZHAKAN, MEMBER(TECHNICAL) MISCELLANEOUS ORDER NO_____75061-75062/2023 FINAL ORDER NO__75121-75122/2023 DATE OF HEARING : 23 February 2023 DATE OF DECISION : 23 February 2023 ASHOK JINDAL :
Both these Appeals are having common issue, therefore, both are disposed of by a common order along with Stay Applications.
2. Briefly stated the facts of the case are that the Respondent namely M/s. India Carbon Ltd. is a calciner and runs a factory to manufacture Calcined petroleum Coke for anode making in aluminum industry. The Respondent imports raw petroleum coke under the license granted to it.
2.1 Regarding import of raw petroleum coke (RPC), a public interest litigation was filed in the Hon'ble Supreme Court of India to regulate import of raw petroleum coke [ITC (HS) 27131100)] by various industries which was free at the material time. The Respondent was also one of the parties in the said proceeding as it was importer of RPC. The Hon'ble Supreme Court directed the Environment Pollution (Prevention & Control) Authority for NER (EPCA) to submit a report for the purpose of regulating import of RPC by various users. EPCA recommended that import of RPC is essential to the country and recommended for issue of license to selected users. For calciners, the Supreme Court accepted the Report of EPCA to permit it to import RPC as calciners use RPC not as fuel but as feed stock. The Supreme Court observed that calciners use high sulphur content RPC and that since it uses as feed stock, it would be allowed to import specified quantum of RPC. The Respondent was allowed to import RPC for end use of anode 3 Customs Appeal Nos.75817, 75818 of 2022 making for aluminum industry. The Hon'ble Supreme Court interpreted the BIS requirement also.
2.2 EPCA in its report also recommended utilization of 7 to 8% sulphur content in raw petroleum coke for manufacturing CPC where sulphur content need to be less than 3.5% for anode making in aluminum industry. A copy of the report of EPCA was placed before the Hon'ble Supreme Court of India and accepted by it. 2.3 Since the Hon'ble Supreme Court allowed the calciners to import a limited quantity of RPC. DGFT authorities who were also party to the proceeding, in implementation of the order of the Hon'ble Supreme Court amended the Policy by Notification No.42/2015 dated 23rd October 2018 and permitted import of RPC with end use restriction for anode making in aluminum industry in accordance with IS 17049. 2.4 Condition of import of RPC was end use in anode making in aluminum industry. The Respondent being a calciner and party to the proceeding in the Supreme Court was granted license to import RPC for anode making in aluminum industry dated 27th May 2021 with an end use condition that RPC would be used for anode making in aluminum industry conforming to Indian Standard 17049. 2.5 The DGFT Notification and license was issued to implement Supreme Court directive in relation to import of RPC where in calciners were allowed to import RPC upto aggregate quantity allowed by the Supreme Court. The license was issued to the Respondent for anode making in aluminum industry conforming to IS 17049. RPC itself is not used for anode making in aluminum industry. Calcined CPC made from RPC is used for anode making in aluminum industry conforming to IS 17049. "Anode making in aluminum industry confirming to IS 17049" is end use of imported RPC. It is not under dispute that Respondent fulfills all the relevant criteria of IS 17049 and sulphur in finished product CPC is less than 3.5%. The condition of license and notification is to be read in the context of Supreme Court directives and recommendation of EPCA.
4Customs Appeal Nos.75817, 75818 of 2022 2.6 The Respondent imported about 10,000 M.T. of green raw petroleum coke under the bill of entry No.4232598 dated 10th July 2021 under the said import license. Bill of entry was assessed to duty. The Respondent paid the duty and out of charge certificate was issued by the Custom Authorities. Out of 10,000 M.T. of green raw petroleum coke, the Respondent lifted about 9954 M.T. of green raw petroleum coke out of which 5544 M.T. of RPC was used in the factory as feed stock and 4510 M.T. of RPC was lying at stock yard of the Respondent and about 46 M.T. was lying at the Port pending lifting of the goods. 2.7 On 28th September, 2021 the DRI officers took the sample from the Dock as well as from its factory and sent the sample to the Central Revenue Control Laboratory (CRCL), Kolkata for testing for the purpose of sulphur content. Though the test of sulphur content was a test under Bureau of Indian Standard Act under the standard provided by IS 17049 and the said test would only be done by a notified Environment Laboratory. DRI sent the samples to its laboratory who are not equipped to test in accordance with IS Standard. A list of environmental laboratory notified CRCL, Kolkata is not a notified laboratory. 2.8 The Respondent objected to the test by CRCL, Kolkata by its letter dated 18th November 2021 and 24th November 2021. 2.9 On 19th November 2021, DRI seized unused stock of 4510 M.T. of RPC lying at its factory premises and 45.79 M.T. of RPC lying at K.P. Dock under Section 110 of the Customs Ac, 1962. 2.10 On or about 30th November 2021, the Respondent sought provisional release of goods under Section 110A of the Customs Act, 1962.
2.11 The Respondent challenges the Show Cause Notice on the ground of jurisdiction and illegality by filing a writ petition in the Hon'ble High Court at Calcutta which was first moved before the Hon'ble Justice Md. Nizamuddin on 14th March 2022. Later on, the Respondent preferred an appeal to the Division Bench which was disposed of by the Hon'ble Division Bench by an order dated 29th March 2022. The Hon'ble Division 5 Customs Appeal Nos.75817, 75818 of 2022 Bench directed disposal of the application under Section 110A of the Customs Act in terms of the order passed by the Hon'ble Trial Judge. 2.11 The Adjudicating authority issued notice for hearing of the application under Section 110A of the Customs Act on 4th April 2022 and 5th April 2022. The Respondent reiterate the contentions made in its written submissions.
2.12 On 27th April 2022, the Adjudicating authority passed an order rejecting the application for provisional release filed by the Respondent. 2.13 Against the said Order, the Respondent filed Appeal before the Ld.Commissioner(Appeals) and Ld.Commssioner(Appeals) after considering all the aspects passed the following Order:-
"18. I further find the aforesaid IS standard is prescribed for requirement for RPC and CPC in anode making in aluminium industry however, the appellant is a calciner and used the imported RPC as feedstock for making CPC from RPC for their customers with sulphur content ranging from 0.8% to 3.5%. I also find from the Chartered Accountant's certificate that the Appellant has sale CPC having sulphur content raging from 1% to 3%. Moreover, as per BIS, CPC for making anode in aluminium industry should have sulphur less than 3.5% which the Appellant complied with and there is not dispute on this score. It is also noted that EPCA report 91 which was considered by the Supreme Court in the aforesaid judgement, wherein for calciner Industry, nothing is mentioned regarding BIS standard. The said report only recommended that the Calciner industry should be allowed to import Pet Coke as its industry uses it for feedstock and not for fuel.
19. Further, in general course the appellant's request for retesting of the goods by any recognized notified Environment laboratory as the Customs lap is not a recognized laboratory under Environment Protection Act, should not be denied in the ordinary course in terms of the guidelines issued by the Board vide Circular No.30/2017-Cus dated 18.07.2017.
20. I further find that some of the seized goods has already been given clearance by the customs imported by the M/s. Neo Carbon Limited, on testing of the goods as order by the concerned assessing 6 Customs Appeal Nos.75817, 75818 of 2022 officer, hence, during the pending adjudication, the impugned goods merit provisional release as per provisions of the Customs Act.
21. In view of the discussion made above, I hold that the impugned order is liable to set aside.
22. In view of the above, I set aside the impugned Order by the Adjudicating authority and the detained / seized goods are ordered to be released provisionally under Section 110A of the Customs Act, 1962 as per the provisions of the Customs Act, 1962."
3. With regard to Respondent M/s. Neo Carbons Pvt.Ltd., the brief facts of the case are that the Respondent imported two consignments of Raw Petroleum Coke (RPC) comprising of 9681.27 Mts. And 4919.00 Mts. Under two Bills of Entry Nos. 4633032 dated 10.07.2021 and 4632911 dated 10.07.2021 respectively under the import License No. 0111000247, which were assessed to duty under Section 17 of the Customs Act 1962 finally. Accordingly, the Respondent paid assessed duty and thereafter the respective clearance order under Section 47 ibid was passed by the proper officer of Customs for both the Bills of Entry. The Respondent removed and cleared about 8635.060 Mts. of aforesaid goods from the Port to its factory premises situated at Begusarai and 1046.210 Mts, of the goods were left to be lifted from Port under Bill of Entry No. 4633032 dated 10.07.2021. Out of lifted quantity 254.062 Mts. were lying at its factory at begusarai and 8380.998 Mts. of RPC were consumed as feedstock. Under the Bill of Entry No. 4632911 dated 10.07.2021, the Respondent removed 4908.44 Mts. of RPC from the port and 10.56 Mts. of RPC have been lying at Port and 3512.950 Mts. of RPC have been lying at factory at Begusarai (Bihar) and 1395.490 Mts. of RPC have been consumed as feedstock for manufacturing CPC for anode making in aluminium industry.
3.1 On about 19.11.2021 the officers of DRI at Kolkata Port as well as its officers posted at Begusarai wrongfully seized lawfully released goods cleared by assessing officer at Kolkata Port on the purported ground that the goods imported had sulphur not in conformity with IS 7 Customs Appeal Nos.75817, 75818 of 2022 Standard. However, seizure of the goods in respect of RPC imported under Bill of Entry No. 4632911 dated 10.07.2021 have been lifted by the officers of DRI by two revocation orders of seizure orders both dated 24th December, 2021. Both the revocation orders were issued after it was found on retest of the goods under the Bill of Entry No. 4632911 dated 10.07.2021 the sulphur content was less than 7%.
3.2 DRI officers took the samples from the Dock as well as from its factory and sent them to the Central Revenue Control Laboratory (CRCL), Kolkata for testing for the purpose of sulphur content. Though the test of sulphur content was a test under Bureau of Indian Standard Act under the standard provided by IS 17.49 and the said test could only be done by a notified Environment Laboratory, DRI sent the samples to it's laboratory which is not equipped to do test in accordance with IS Standard. The CRCL, Kolkata is not a notified laboratory. The Respondent demanded retest.
3.3 On 31.01.2022, the Respondent received a Show Cause Notice (SCN) under Section 124 of the Customs Act, 1962 issued by DRI for holding the goods imported under bill of Entry No. 4633032 dated 10.07.2021 liable to confiscation on the purported ground that RPC imported has sulphur content in excess of IS Standard.
3.4 On or about 25.02.2022, the Respondent sought provisional release of goods under Section 110A of the Customs Act, 1962.
3.5 The Respondent challenged the SCN on the ground of jurisdiction and illegality by filing a Writ Petition in the Hon'ble High Court at Calcutta which was first moved before the Hon'ble Justice Md. Nizamuddin on 14.03.2022, later on, the Respondent preferred an appeal to the Division Bench which was disposed of by the Hon'ble Division Bench by an order dated 29.03.2022. The Hon'ble Division Bench directed disposal of the application under Section 110A of the Customs Act in terms of the order passed by the Hon'ble Single Judge.
8Customs Appeal Nos.75817, 75818 of 2022 3.6 The Additional Commissioner of Customs (hereinafter referred as to "the adjudicating authority") issued notice for hearing of the application under Section 110A of the Customs Act, 1962 on 04.04.2022 and 05.04.2022.
3.7 On 27.04.2022. the adjudicating authority passed an order having No. KOL/CUS/ADC/PORT/Gr.I/34/2022 rejecting the application for provisional release filed by the Respondent, which was received by an email and downloaded by the Respondent on 29.04.2022.
3.8 The said order was challenged by the Respondent before the Ld.Commissioner(Appeals), who passed the following order.
"18. I further find the aforesaid IS standard is prescribed for requirement for RPC and CPC in anode making in aluminium industry however, the appellant is a calciner and used the imported RPC as feedstock for making CPC from RPC for their customers with sulphur content ranging from 0.8% to 3.5%. I also find from the Chartered Accountant's certificate that the appellant has sale CPC having sulphur content ranging from 1% to 3.5%. Moreover, as per BIS, CPC for making anode in aluminiun industry should have sulphur less than 3.5% which the appellant complied with and there is not dispute on this sore.
It is also noted that EPCA report 91 which was considered by the Supreme Court in the aforesaid judgement, wherein for calciner Industry, nothing is mentioned regarding BIS standard. The said report only recommended that the Calciner industry should be allowed to import Pet Coke as its industry uses it for feedstock and not for fuel.
19. Further, in general course the appellant's request for retesting of the goods by any recognized notified Environment laboratory as the Customs lab is not a recognized laboratory under Environment Protection Act, should not be denied in the ordinary course in terms of the guidelines issued by the Board vide Circular No. 30/2017-Cus dated 18.07.2017.
20. I further find that some of the seized goods has already been given clearance by the customs imported by the appellant, on testing 9 Customs Appeal Nos.75817, 75818 of 2022 of the goods s order by the concerned assessing officer, hence, during the pending adjudication, the impugned goods merit provisional release as per provisions of the Customs Act.
21. In view of the discussion made above, I held that the impugned order is liable to set aside.
22. In view of the above, I set aside the impugned order by the adjudicating authority and the detained / seized goods are ordered to be released provisionally under Section 110A of the Customs Act, 1962 as per the provisions of the Customs Act, 1962."
4. Against the said orders, the Revenue filed these Appeals.
5. During the pendency of the Appeals, Revenue also filed Stay Applications for considerations.
6. Today both Appeals as well as Stay Applications were taken up together for disposal.
7. The contention of the Ld.Authorized Representative for the Department is that the coal imported by the Respondent having sulphur content beyond the prescribed limit, therefore, the same is prohibited goods. Therefore, the impugned orders are required to be set aside.
8. On the other hand, the Ld.Counsel for the Respondents submits that the Respondents are calciner and used the imported RPC for making CPC from RPC for their customers with sulphur content ranging from 0.8% to 3.5%. As per the GIS CPC for anode making sulphur content need to be less than 3.5% which the Respondent has complied with and to that the aspect has not been disputed by the Revenue, therefore, the Appeals deserve no merits hence be rejected and orders of release be issued as Respondents are suffering demurrage charges.
9. Heard the parties and considered the submissions in detail.
10. We find that the sole contention of the Revenue against the provisional release of the impugned goods is that the said goods 10 Customs Appeal Nos.75817, 75818 of 2022 having sulphur content more than 4% and the same cannot be used by aluminium manufacturing industry, but Revenue has not disputed the fact that the Respondents are calciner and used the impugned goods as feedstock for making CPC from RPC for their customers with sulphur content ranging from 0.8% to 3.5%.
11. In that circumstances, we hold that there is no harm to release the goods provisionally and merits of the case are to be dealt at the time of final adjudication of the matter. We further take note of the fact that the Ld.Commissioner(Appeals) in his order has considered the request of the Respondent for re-testing of the goods by any recognized and notified laboratory as the Customs Lab is not a recognized laboratory under Environment Protection Act.
12. We direct the Adjudicating authority to allow the request of the Respondents for re-testing of the goods in question from a recognized notified Environment Laboratory.
13. Further, we do not find any infirmity in the impugned orders, therefore, the said orders are confirmed. Accordingly, we direct the Adjudicating authority to release the goods provisionally to the Respondents immediately. The Stay Applications, filed by the Revenue are stand dismissed.
In view of this, we dismiss the Appeals filed by the Revenue.
(Operative part of the order was pronounced in the open Court.) Sd/-
(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) sm