Unsatisfactory Reporting Procedure and Unclear Permission for importing wool, etc: CESTAT remands customs duty matter [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, held that the reporting procedure was unsatisfactory and the permission for importing wool, etc was unclear. The customs duty matter was remanded.

The respondent, Om Siddh Vinayak Impex Pvt Ltd, claimed duty exemption under Notification No. 137/2000-Cus. dated 19.10.2000. Two samples were drawn by the customs and were sent to CRCL Kandla for testing on 13.10.2003.

As per the sample report, yarn percentage was less than 85% and hence the classification declared by the importer was found to be incorrect. The respondent approached the Commissioner who set aside final assessment wherein benefit was denied and the Commissioner (Appeals) observed that the copy of the test report was not supplied to apathy either before or after adjudication.

After some back and forth in remanding the matter and setting aside of orders, the Revenue filed before the CESTAT. The counsel for the Revenue emphasised in his arguments that the test report from CRCL was conclusive as it was never challenged/rejected by the respondent.

The counsel for the respondent submitted that even though the Department was in possession of the test report, it is clear that the department was doubting the said test report. The counsel also pleaded that the grounds taken by the Revenue are beyond the scope of show cause notice.

The CESTAT observed that the Commissioner (Appeals) has held that the test reports from CRCL are inadequate to decide classification of the imported goods but has not clarified why it has been rejected.

The bench reiterated that the department has to first reject the transaction value and then proceed to determine value by following the Customs Valuation Rules, thus making a ground for remanding the matter.

Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member) remitted the matter to check for permission to import fresh fabrics and for duty determination. The matter was remanded to the Deputy Commissioner for necessary clarifications.

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