The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand on 32mm TMT bars and observed that the Adjudicating Authority is not an expert.
Entertaining a doubt as to whether the impugned goods were alloy steels or non-alloy steels and prime or secondary, the Revenue drew samples and sent the same to National Metallurgical Laboratory ( NML ), Chennai. Thereafter, basing on the letter dated 30.06.2008 filed by the importer, the Bill of-Entry was assessed provisionally pending the outcome of the test result, with BCD at the rate of 5% and nil rate of CVD. Accordingly, the importer had paid the quantified duty under protest after filing a letter of protest dated 08.07.2008.
The appellant then approached the High Court of Madras with a prayer to quash the final assessment order in respect of the subject Bill-of-Entry, with a further request for re-assessment of the same. The High Court set aside the order of assessment, remitted the case for re-assessment in accordance with law after giving opportunity to the importer. The original authority has however held that both alloy and non-alloy TMT bars were eligible for Nil rate of CVD in terms of Sl. No. 202A of the said Notification.
The advocate for the appellant submitted that the report of NML clearly indicated that the samples drawn were non-alloy steel as per IS 7598:1990 and hence, the imported material being TMT bar as opined even by the scientists at NML, the same should have been classified as non-alloy steel, thereby extending exemption from Basic Customs Duty to the importer.
It was further submitted that the authorities below have held that the TMT bar is not a non-alloy steel on the ground that it contained 0.6% or more of silicon; however, in respect of TMT rod of 20mm, the silicon content ranged between 0.37 to 0.62% and in respect of TMT rod of 25mm, the silicon content ranged between 0.57 to 0.66%; that without considering this crucial finding of the expert, the first appellate authority has, without any basis, observed that the average silicon content was more than 0.6%; if the average silicon content is considered, then the same would be 0.58% in respect of 20mm TMT rods, which is much below the standard requirement.
A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “It is certain that the adjudicating authority/Revenue is not an expert nor does the appellant claim to be an expert. Hence, it was desirable for the Revenue to have got even the 32mm TMT bars analysed by the expert namely, National Metallurgical Laboratory, since the re-classification has been attempted holding that these 20mm, 25mm and 32mm TMT bars are alloys, after entertaining a fundamental doubt.”
“Hence, considering the peculiar facts of this case, we are of the view that the Revenue is not justified in denying the benefit of Notification No. 21/2002-Cus. dated 01.03.2002 (Sl. No. 190C) and the consequential demand in respect of the 32mm TMT bars cannot sustain.” the Bench concluded.
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