Case Law Details
Rajkamal Industrial Pvt Ltd Vs C.C. – Kandla (CESTAT Ahmedabad)
Conclusion: Base oil SN50 could not be classifiable as High-Speed Diesel (HSD) in absence of any conclusive evidence to hold that the imported product was only HSD and it could be used as Automotive Fuel, the imported base oil in question could not be reclassified as HSD.
Held: Assessee-company had imported base oil SN50 vide vessel Al Heera and had filed bills of entry by classifying the above product under CTH 27101960. On an intelligence that the product was HSD and not base oil, the DRI officers boarded the vessels. The issue to be decided in the present case was that whether the imported goods was the Base Oil SN 50 classifiable under Customs Tariff chapter hearing 27101960 as claimed by assessee in the bill of entry or the same was classifiable as HSD under Chapter heading 27101930 of Customs Tariff Act, 1975 as claimed by the revenue. Commissioner vide impugned order ordered for confiscation of the goods under and also imposed penalties upon assessee under section 112 (a) of the Customs Act on the premises that they mis-declared description of the goods and imported restricted goods which was not otherwise permissible under the provision of Customs Act. It was held that even though the imported product was HSD and not the base oil but the laboratories were not able to test the sample of all the 21/22 parameters under IS 1460;2005 as they did not have the requisite facility for testing. The custom department ought to have established that the imported base oil could be used as HSD/ Automotive fuel in internal combustion engines but the adjudicating authority could not establish that the imported product can be used as HSD or automotive fuel and he kept silence on this aspect. In absence of any conclusive evidence to hold that the imported product was only HSD and it could be used as Automotive Fuel, the imported base oil in question could not be reclassified as HSD. In view of the settled legal position in the present case also irrespective of whether the base oil was correctly declared by assessee or otherwise but since the proposed classification by the department did not sustain the case of department clearly failed, for this reason also the impugned order was not sustainable. The goods were not classifiable as HSD under CTH 271031930. Consequently the claim of the appellant for classification of goods as base oil under CTH 271019160 was maintained.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
Since the issue involved in all the three cases is common and the goods is in the form of comingled oil in a common storage, for the ease of reference we are taking the facts from the appeal of M/s Rajkamal Industrial Pvt. Ltd. The appellant had imported base oil SN50 vide vessel Al Heera and had filed bills of entry by classifying the above product under CTH 27101960. On an intelligence that the product is HSD and not base oil, the DRI officers boarded the vessels and drew the representative samples from each of the 10 tanks contained in the vessel vide panchnama dated 05/05/2018 and sent one set (10 bottles) of sample to Customs lab at Vadodara vide Test Memo 1 to 10 dated 07/05/2018. The said imported goods were seized by the DRI vide Seizure Memo dated 15.05.2018. The Chemical Examiner at Customs Lab Vadodara vide his test reports dated 10/05/2018 had communicated that the samples have characteristics of HSD/Automotive Fuel Oil confirming to IS 1460:2005 and the samples were other than Base Oil. The appellant requested for retest of the samples at Central Revenues Control Laboratory (CRCL), New Delhi or Indian Institute of Petroleum, Dehradun and accordingly the second set of samples (10 bottles) were sent to CRCL, New Delhi who vide their report dated 3.7.2018 confirmed that the analytical parameters of each of the ten samples conformed to the specifications of HSD/Automotive Fuel as per IS 1460:2005 and the samples were other than base oil. The appellant preferred a Special Civil Application No. 10882 of 2018 before the Hon’ble High Court of Gujarat demanding retesting of samples by a reputed Independent institution and the Hon’ble High Court vide their interim order dated 30.7.2018 directed the department to send the requisite quantity of samples to the IOCL, Mumbai which is one of the notified laboratories as per department circular dated 16.11.2017.
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