CC (P) Vs. RAJKOT ENGG. ASSOCIATION

JUDGEMENT

(1.) THIS is the department's appeal against the above captioned impugned order dt. 31.5.1996 of the Collector (Appeals) Ahmedabad praying for setting aside the same.

(2.) IN support to the appeal, the Ld. DR has contended that the Commissioner (Appeals) has entertained the additional evidences, the Chartered Accountant's certificate, without giving reasonable opportunity to examine the same or to cross examine the witness under Rule 5(3)(a) of the Custom appeal Rules. The balance of convenience is also not properly appreciated. It is a well -settled principle of assessment that the test report on the representative samples drawn by the proper officer of Customs from the Import consignment tested through recognised laboratory can be considered valid for the purpose of assessment. Out of the said five test reports, only two reports relate to the test on the representative samples drawn by the proper officer of Customs under Section 144 of the Customs Act. The test reports based on the samples drawn behind the back of the proper officer cannot be relied upon. The first test report result from Central Fuel Research Institute, Dhanbad was not conclusive and without evidentiary value in judicial proceedings even if, the phosphorus content indicated therein were reported to be more than the limit prescribed in the exemption notification. The reliance of the test report of National Test House Alipore, Calcutta by the Assistant Commissioner is proper. The test result on the samples drawn by the respondent association tested through the same laboratory also indicates the same remarks as in "red cloth packet". The test result of Dhanbad Laboratory in respect of samples drawn by the Respondent is also duly affixed with the same stamp and remarks as available on the test result of the samples drawn by the department. Thus, samples drawn by the Respondents are not having any evidentiary value and the test report in that regard cannot be accepted, as a valid one. Notification should be interpreted on the basis of the language used therein and not on the basis of the intendment or by supplying words or ignoring them, for which there is no scope for any addition to its language or for taking away anything which is specifically provided in such notification. The words "air dried basis" are not available in the exemption notification No. 23/91 -Cus. dt. 14.3.1991. The cumulative reading of the wordings of the exemption notification reveals that the mass of coke imported into India should consist of phosphorus content of 0.035% or below. The percentage of phosphorus content into imported consignment should be tested on as received basis. There is no proper appreciation of the cross examination of the Inspector N.C. Bilandani, C.H. Navlakhi and Shri B.N. Ghosh, Chemist of National Test House Alipore Calcutta. The appreciation of the Commissioner (Appeals) regarding the procedure of drawing samples from their evidence is not correct. Samples testing of method of drawing samples not to be held defective without any evidence. Shri B.N. Ghosh has specifically stated in the cross examination that the samples were tested as per ISI specification 1350 part 5 19079, whereas the Commissioner (Appeals) has upheld the contention of the appellant that it is not so. The evidence of Shri Ghosh regarding the condition in which the samples were received is also not properly appreciated, as there is no admission by him that the laboratory received the samples in unsealed condition. In the Judgement in the case of Madhu Wool Spinning Mills v. Union of India in 1989 ECR 531 of Bombay High Court, the samples were drawn from bale No. 12 and 34, out of 37 bales imported/ which was woollen hosiery. The test result in both the cases were found the wool content more than 50% as provided under relevant exemption Notification. The third sample was drawn from bale No. 19 by the department based on the tariff advise, and its test result on core -drilling test was found below 50% of the wool. The first 2 test result of the samples drawn by the department was conclusive, and the third test was un -warranted. So this judgement was on different footing, which is not applicable to the instant case. The first test result received from Central Fuel Research Institute, Dhanbad was not indicating proximate analysis, the same was affixed with certain remarks that "this is not a certificate and not valid to be produced in a Court of Law". So it cannot be relied upon. When the first test result has no evidentiary value, the test from another standard and recognised laboratory was essential, and so the department got tested the samples from the National Test House, Alipore Calcutta whose report was in detail indicating the proximate analysis as well as other various details. The levy of Customs and exemption from Customs duty is applicable on the goods imported into India. The SGS certificate from Australia was based on the sample which was not drawn by the proper officer of Customs and were also not duly sealed by Indian Customs. The test report from a foreign country cannot be relied upon. The impugned order relying on such report is not proper and correct. The exemption notification is not interpreted in true spirit and the evidence is not properly appreciated, and the impugned order hamper the well settled principles of assessment as framed by law from time to time, and is based on assumption and presumption and deserves to be set aside.

(3.) THE Ld. Sr. Counsel appearing for the respondent has strongly supported the impugned order, and has analysed the whole case in the light of the material available in the case. The respondent is an association incorporated since 1972, and have tried to solve the problems of the members with the different Government authorities, and it deals with the import of the raw material from the concerned companies at the competitive rates, and distributes to the members at a landing cost + overseas expenses. The motive is not to make any profit out of the material supplied to the member. The said association cannot be said to have any motive of getting any illegal benefit. The very fact that they entered into contract with mines sent S.A. Australia to get Metallurgical Coke with the Phosphorus content less than 0.35% is supported by the suppliers test report, from a well known laboratory, universally accepted as reliable one, of the samples obtained by the supplier out of the goods imported, showing the result of the phosphorus content less than 0.035%, supports the aim of the association. It is only after satisfying, the association has imported 1045 M.T. of Metallurgical coke from mines sent S.A. Australia. The Inspector of Customs has drawn the samples on 26.6.1991, from the imported goods during the course of unloading process only which commenced on 16.6.1991 and completed on 5.7.1991. The Inspector of Customs had drawn 4 samples totally weighing approximately 2 kgs., out of which one sample was sent to National Test House Alipore Calcutta, and another to Central Fuel Research Institute Dhanbad, for determination of the Phosphorus content in the metallurgical coke. The authorised representative of the respondent had also drawn the sample, and sent to the same laboratories and institute. The test result of the samples drawn by the respondents dt. 11.10.1991 and 24.7.1991 of National Test House Calcutta, and Central Fuel Research Institute, Dhanbad respectively showed the phosphorus content in the sample is less than 0.035%, according to which the respondents can claim the benefit of notification No. 23/91 dt. 14.3.1991, so far as the payment of auxiliary duty of customs is concerned. The show cause notice based on the test report dt. 16.3.1992 of the National Test House Alipore, Calcutta shows the abnormal delay of testing the samples received in July 1991, the said report was received by the concerned Inspector in September, 1991, but have not finalised assessment, and demand if any was liable to be raised within 6 months from the date of the receipt of the said results. The test result from Dhanbad, CFRI received by the Inspector was brushed aside without immediately acting upon it as he was duty bound. There was no reason as to why the test result of CFRI Dhanbad on the samples supplied by the department was not acceptable to the department. No evidence is produced to show that the test was defective. In the absence of it, not taking action immediately on the said report goes against the department. The time limit for issue of show cause notice starts from the date of test result is finalised. The show cause notice now issued without any allegation of suppression of facts etc. is clearly barred by time. When there are two contrary reports on the same samples the report which is favourable to the party should be accepted, and not the other way, that is favourable to the department. So on this count the demand made under the show cause cannot be upheld. The respondents cannot be denied the benefit of notification No. 23/91 dt. 14.3.1991 when the test report on the samples drawn by the Inspector of Customs shows that phosphorus content less than 0.035%. The test report given by the National Test House and CFRI, Dhanbad on the samples supplied by the respondents and the test result given by the CFRI, Dhanbad and the samples supplied by the department are only the reliable result. The 16.3.1992 test report of the Nation1 Test House Alipore Calcutta does not pertain to the samples drawn by the Inspector of Customs out of imported coke, in view of the inconsistent evidence of the Inspector and Chemical Examiner, Shri B.N. Ghosh in the cross examination regarding the seal of the samples and its condition when tested. The Inspector has admitted the samples were sent in the sealed condition but the Chemical examiner Shri Ghosh has admitted that it was not sealed. So the samples are not identified by them as one taken out of the imported coke. The Inspector of Customs who has taken the samples, has admitted that there is no prescribed procedure for drawing sample in the cross examination, which clearly shows his ignorance of the prescribed procedure in ISI 436 Pt -II 1965, which is not followed by him. Shri B.N. Ghosh who has tested the samples and the National Test House, Alipore Calcutta has avoided to answer important questions as evident from his cross examination. He has no comments to offer to the quantity of samples as per the ISI specification. He has not explained the standard procedure for testing the hygroscopic substances. He has relied on the Indian standard specification prescribed in ISI 1350 Part -5 1979 to conduct the test.