Customs, Excise and Gold Tribunal - Mumbai
The Sandur Manganeze & Iron Ores Ltd. vs Commissioner Of Customs, Goa on 19 April, 2001
JUDGMENT
Gowri Shankar, Member (Technical)
1. The delay in filing appeal C/153/2001 as a result of two separate appeals having been filed in place of an earlier joint appeal has been condoned.
2. Santur Manganeze & Iron Ores Ltd, Bangalore imported and presented for clearance at Marmagoa, three consignments of metallurgical coke. The first consignment was imported in July 1990, and the other two in November of that year. The importer claimed the benefit of concessional assessment contained in entry No. 2 of the Table to notification 35/90. This entry provides concessional rate of duty of 25% ad valorem to coke with phosphorous content of 0.035% % or below, when imported into India for the manufacture of pig iron. After the samples were drawn from each of the consignments, they were permitted to be released. The samples were tested at the Central Revenue Laboratory at Marmagoa. It reported that the instruments with it did not permit quantitative analysis to determine the phosphorus contents and reported that colour comparison test as per the method mentioned in Commercial Method of Analysis by Smell and Biffen showed that the phosphorous content in both the cases consignments was less than 0.035%. Obviously as a result of this uncertain report, the Custom House thereupon entered into correspondent with the Chemical Laboratory as to the feasibility of testing samples at the Central Revenue Chemical Laboratory, and a decision was finally taken to send samples to the laboratory at Delhi. The remnants of the samples drawn from the consignments were sent for analysis to the Chief Chemist at the Central Revenue Chemical Laboratory by letter dated 2.2.1993 of the Assistant Collector of Customs. There was apparently some delay in testing the samples at Delhi and some correspondence ensued. The report of the Chief Chemist of the Central Revenue Chemical Laboratory in his letter dated 19.10.1993 to the Assistant Collector shows that the phosphorous content determined in accordance with the Indian Standard Specification contained in IS: 1350/1984 was 0.058% by weight. This being more than the quantity prescribed in the notification, notice was issued to the importers proposing to finalise the assessment by denying the benefit of the notification. After considering the reply furnished by the importer and hearing him, the Assistant Collector passed orders (which have been confirmed by the Commissioner (Appeals)) assessing goods without extending the benefit of the notification. Hence these appeals.
3. The contentions of the counsel for the appellant are these. The samples had been tested before despatch from the consignor by two inspecting agencies, one based in China, and another in Japan, each of which reported them to contain lesser phosphorous than 0.035%. It was further tested after arrival by another local agency with the same result. There was an interval of three years between the arrival of the consignments and the report of the Chief Chemist. It is not known when the samples were tested. The parameters required to be followed in drawing the samples contained in IS:436 of 1965 are not shown to have been followed. Therefore, the test report of the Chief Chemist in unreliable and is not to be acted upon. He relies upon an unreported order of this Tribunal in CC v. Rajkot Engineering Association in appeal C/488R/96.
4. The departmental representative emphasises that the appellant had not at any stage before the Commissioner questioned the correctness of the testing or found fault with the report. The fact of test by other agencies is not relevant. The Customs department is not bound by the result of test of other agencies.
5. In the order that the appellant relies upon, the Tribunal was concerned with testing of samples of a consignment of coke for its eligibility to the same benefit as this now under our consideration. The Bench noted the requirements contained in IS:436 of 1965. This specification provides detailed parameters of collecting the samples of coke to be tested to ensure that it is representative. It noted the requirements contained in IS:1350 (Part V) of 1979, Indian Standard method of Test for Coal and Coke. This provides that samples shall be as in specification IS: 436. It provides for receipt of samples in sealed containers. it noted that in the case before it, the report of the National Test House was not based upon procedures that were in conformity with those laid down in these specifications and held that the balance of convenience was in favour of the importer. In the case before us, we therefore find good reason for not confirming the order impugned before us. The passage of three years, and the corresponding variation in ambient, the effect of the moisture content of the coke and the percentage of the phosphorous in it could have a bearing on the ultimate rest result. Unless it is possible to ensure that the moisture content was offset by samples which ought to have tested were air drying both the contents require moisture, it is not possible to accept the validity of the Chief Chemist's report. At the same time, it is evident that there has really been no statistical accounts determination valuation of the phosphorous contents before the consignment was cleared. The colour comparison method is nothing other than the visual estimation of approximate contents and is not a quantitative determination. We are therefore of the view that the department should make available to the appellant the procedures that were followed with regard to sampling and the method that were followed in testing samples, so that it can be determined whether the two Indian Standard Specifications in question have been complied with, and that the appellant should, if it considers necessary, be permitted to question the methodology of sampling and testing.
6. The appeal is accordingly allowed, and the impugned order set aside. The adjudicating authority shall furnish the information that we have specified above to the importer and thereafter give it a reasonable opportunity of making submissions on this and being heard. Either side shall be allowed to adduce evidence in support of its stand.