The Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad upheld the penalty and classification decision in Light Oil Import Case.
Facts
The appellant filed Bill of Entry for clearance of 198.32 Mts of “Industrial Composite Mixture” classifying the goods under CTH 27101990, assessable value of which was declared as Rs.82,57,556/- involving duty of Rs.20,22,276/-.
The goods were given first check with order to draw samples and forward the same to CRCL, Kandla for testing. As per the test report of the Customs Laboratory, Kandla, is concerned, the imported goods were found “Light Oil, and not “Industrial Composite Mixture”. The adjudicating authority found that the imported goods are classifiable under tariff heading 27101290 i.e. ‘Other of sub heading Light Oils and Preparations’.
The adjudicating authority also found that goods falling under tariff heading 27101290 are allowed to be imported through State Trading Enterprises (STE) only as per Policy conditions.
However, the appellant is neither STE nor they have submitted any documents showing grant of such rights by the DGFT to import or export any of the goods notified for exclusive trading through STEs, therefore, they have violated the policy conditions of Foreign Trade Policy.
The appellant had waived show cause notice and personal hearing.
Submissions
Advocate for the appellant submitted that the Respondent-Department, as per note 4 of Chapter 27 seeks to classify the impugned goods under Customs Tariff Heading 27101290, as against Heading claimed by them under CTH 27101990. As per the test report the distillation has not been done in the present case. Therefore, the goods cannot be classified under CTH 2710 1290 as the goods do not confirm to the light oil.
Decision
The two member bench of Raju Member (Technical) And Somesh Arora Member (Judicial) found that the party had brought a test report with 9 parameters, which it asserts are relevant and decisive for determination of the nature of product and which was drawn purportedly in the country of exportation i.e Bandar Abbas.
The bench observed that the report sought to be relied upon by the appellant was drawn behind the back of the department and in another country and therefore cannot be given precedence over the report relied upon by the Department, which has much higher credence, in the factual matrix of the matter, as the party’s report does not even match on the parameters tested by the department.
The Tribunal noted that after having got the goods cleared by waiving Show Cause Notice or personal hearing and requesting for imposition of minimum fine, which were clearly brought in violation of EXIM policy relating to light oil at the relevant time as the same was a canalised item and was allowed to be imported only through State Trading Enterprises, as per the policy condition 5 of chapter 27.
“An after thought of the appellants cannot be allowed to help their cause. Reliance in this regard is placed on Fine Chemical Suppliers to emphasize that when violation in relation to goods are accepted, penalties get attracted. Party had all the opportunity to seek re-test or even cross examination of Chemical analyst, if it found it to be erroneous, but it chose not to do the same. Having acquiesced with so termed erroneous report, it cannot now be allowed to resist it. Error, qui non resistitur. (An error not resisted is approved) will therefore, in any case apply in the facts and circumstances of the matter”, the bench said.
Party having accepted the classification and the nature of goods without seeking any re-test of the sample, the tribunal found that the appeal is devoid of merits both on classification issue as well as violation of ITC policy and penalties imposed.
Case title: M M Trading Company v/s C.C.-Mundra
Citation: CUSTOMS Appeal No. 10800 of 2019-DB
