BHARAT ENTERPRISES Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) B .S.V. Murthy, Before the arrival of vessel, M/s. Teej Impex Pvt. Ltd., Gandhidham sold 2,600 MTs to M/s. Bajrang Petrochemicals Pvt. Ltd., M/s. Jagdamba Petroleum India Pvt. Ltd., M/s. Shree Ganesh Oleochem Pvt. Ltd. On arrival of the vessel on 27 -2 -2009, before permitting discharge of the goods, samples were drawn and on 13 -3 -2009, the test report was received from the chemical examiner, according to which items composed of mixture of mineral hydrocarbon oil with flash point below 25C and distillation range of 45C to 225C. Thereafter, the importer as well as high sea purchasers filed various bills of entry and the goods were re -warehoused and subsequently the goods were cleared. In the meanwhile, DRI had taken up the investigation of importation in another vessel in the case of import by the same importer viz. M/s. Teej Impex Pvt. Ltd. by vessel MT Rising Om. In August, 2009, DRI raised certain queries with the chemical examiner in relation to the test report given in March 2009 and the chemical examiner clarified that based on the literatures, documents and records, 90% of the distillation took place at 208C. Based on this report and other investigations conducted, proceedings were initiated proposing to classify the goods under CTH 27101190 instead of classification proposed by the importer under CTH 27101990, on the ground that the imported goods is not Condensate but Light Oils. After investigation. Show Cause Notice was issued, which culminated into the impugned order, whereby the goods were held to be liable to be confiscated and where the goods were available were seized and allowed to be redeemed on payment of redemption fine, proposal for re -classification was upheld and penalties under various Sections were imposed.

(2.) LD . Counsel on behalf of the appellant submitted that in this case, the last Bill of Entry in respect of which the differential duty has been demanded, was filed on 22 -6 -2009 and the Show Cause Notice was received by them on 26 -12 -2009. He submitted that the Show Cause Notice was time -barred in view of the fact that there was no suppression of facts or mis -declaration in this case. Even if the date on which out of charge was given was taken, the Show Cause Notice issued would be beyond the 6 months period. Therefore, he submits that on limitation itself, the appellant has a strong case.

(3.) WE find that in this case, no doubt, the goods were declared as Condensate by the appellant. However, admittedly. Condensate is classified under CTH 2709, whereas the appellants have proposed classification under CTH 2710. Even though, the Bills of Entry were assessed by the Customs officers, this mistake was not noticed. Further, sample was drawn from the vessel before allowing the discharge, but the queries raised were not proper, which resulted in Chemical Examiners reporting the result as the product to be distilling between 45C to 225C, whereas the information required was different. By the time DRI took up the investigation and requested for clarification, there was no remnant sample available and since all the goods had been cleared and whatever was left was comingled with other products, fresh samples also could not be drawn. In the result, it is difficult to say whether the appellants have suppressed the fact or resorted to mis -declaration with intent to evade duty. No doubt, the ld. SDR submitted that the detailed investigation has been conducted, statements have been recorded and documents are available. But, in the case of imports, the goods are assessed by the Customs officers, allowed to be discharged out of the vessel under supervision and in this case, the sample was drawn and therefore, to invoke the limitation, there has to be very strong ground to show suppression or mis -declaration with intention to evade duty. No collusion has been alleged. Since the appellants have been able to make out a prima facie case in their favour on the grounds of limitation, and it was also submitted that on merit, the appellants have a good case since the term Condensate itself is a recent term and the quality of Condensate and the specification also vary from source to source. Under these circumstances, we consider the matter would require detailed examination of the technical issues, meaning of terms like Condensate, Light Oil, tariff description, relevant notes and report of chemical examiner, which can be considered only at the time of final hearing.