JJR Associates Vs Commissioner of Customs (Port) (CESTAT Kolkata)
The appeal arose against Order-in-Original No. Kol/Cus/Commissioner/Port/13/2019 dated 08.05.2019, under which the Commissioner of Customs (Port), Kolkata rejected the declared assessable value of goods imported under 41 Bills of Entry under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determined the value under Rule 5. The Customs Authority alleged that goods declared as “machinery oil”/“machinery lubricant oil” were actually “base oil”, relying principally on reports from CRCL, Kolkata and CRCL, New Delhi. CRCL, Kolkata stated that no reference/specification of machinery oil medium grade was available and suggested that its trade identity/sales grade be ascertained, while CRCL, New Delhi opined that the samples “may be base oils of various grades”. Based on the absence of ash content and an observation of CSIR, IIP, Dehradun concerning a separate case, the goods were treated as base oil. The authority also relied upon alleged supplies of base oil to M/s Balmer Lawrie & Co. Ltd. from imported stock.
Read SC Judgmentin this case: SC Upholds CESTAT Relief in Machinery Oil Classification and Valuation Dispute
Consequently, the goods were ordered to be confiscated under Section 111(m) of the Customs Act, 1962, with redemption fine of Rs.50 lakhs under Section 125. Reclassification from CTH 27101950/27101980 to 27101960 resulted in a differential duty demand of Rs.2,32,95,676/-. Penalties of Rs.20 lakhs under Section 112(a)(ii) and Rs.50 lakhs under Section 114AA were imposed, and Rs.95 lakhs deposited during investigation was ordered to be appropriated towards duty.
