2005 (98) ECC 239 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

West Zonal Bench -- Mumbai

S.S. Sekhon, Member (T) and T. Anjaneyulu, Member (J)

Carrara Marble & Granite Industries

Versus

Commissioner of Customs, Kandla

Appeal No. C/702/98

[Arising out of Order-in-Original No. KDL/COMMR./67/97 dated 30.12.1997 passed by the Commissioner of Customs (Appeals), Kandla]

Order No. A/685/WZB/2004-C-II, dt. 19.7.2004, Certified on 31.8.2004

Assessment (Customs)

Notification No. 208/92 -- When the assessment arrived at, that the goods are not `rough marble slabs", is not upheld, and is set aside, and the goods under import are considered to be `rough', as they are admittedly not finished; a series of process subsequent to clearance are required to be undertaken, to convert these marble to `finished slabs'. Such steps are required, to be undertaken, is admitted. The imported goods therefore are `Rough Slabs'. The benefit of the DEEC licence and notification cannot be denied and penalties imposed upheld.

Appeal allowed

PRESENT :

Shri S.N. Kantawala, Adv. for the appellant.

Shri R.B. Pardeshi, JDR for the respondent.

Case Cited :

Tata Iron & Steel Co. 1995 (53) ECC 104 (SC)..................................................... [Para 1]

Per : S.S Sekhon

Heard both sides and considered the matter and it is found --

(a) The appellants as it appears from the impugned order, paragraph 1 declared import of "Marble Blocks" to be cleared under DEEC advance licence. They were not allowed, as the examination report on the relevant BE indicated --

"Checked the description, quantity and size, verified, not raw / rough, verified not polished and not cut to regular shape and size".

On that basis, it was established that the goods were `Marble slabs' and not "Rough randam slabs of marble" as declared on the BE (as it appears from paragraph 11 of the impugned order). Therefore, misdeclaration was alleged and established. Paragraph 12 of the impugned order also records

"12. The goods were found to be semi-finished marble slabs. The import licence produced by the party were for the "Relevant Marble slabs". The goods were not of this description i.e. raw marble and they were also not "relevant" i.e. with export product. Hence, the licence produced by the importer did not cover the said imports. It renders all the seven consignments liable for confiscation under section 111(d) of the Customs Act, 1962 and also for a penal action under Section 112(d) of the Customs Act, 1962".

(b) The adjudicator, after hearing the appellant under paragraph 23 has arrived at a positive finding that the issue of nexus between the export product and imported goods is not relevant and this charge like notice was not substantial. Therefore, he concluded as follows--

"26. The advance licences submitted for clearance of the goods, allowed "Relevant Raw marble slabs". Their import documents also declared the goods as "Raw Marble Slabs" and similar description was given in the Bills of Entry. The physical examination of the goods showed that the goods were not raw/rough' Prima facie the goods were not covered under the description as given on the Advance Licence as well as in all import documents including Bills of Entry. The importers claimed that staff carrying out the examination of the imported goods was not a technical staff conversant with such minute details, who may given their authentic opinion. I do not find any reason to get the goods examined by a special expert in this case. The facts of goods being `raw/rough' or otherwise can be verified by an officer simply on physical examination. To ascertain this aspect, I do not find that expertise in the field is required as claimed by the importers. I do not agree with the importer's contention that unpolished marble slabs are rough. The importers have also referred a judgment in the case No. C/476/95-A & C/477/95-A. I have also gone through the copy of the said judgment submitted by the importers. In appeals filed by M/s. Nitco Marble and Granites Pvt. Ltd. and M/s. Maharashtra Marble Co. against the Orders-in-Originals issued by the Collrs. of Nhava Sheva and Bombay respectively. CEGAT, New Delhi discussed this aspect in Paragraph 5 of their order. In these cases the entitlement was in respect of "Relevant raw marble slabs" and (sic) is some cases to "Raw Marble Slabs". The goods imported against these licenses were `processed marble slabs'. One of the expert opined that he (sic, the) goods were ready to use. But another expert opined that the goods were not in `finished' condition and several processes have to be followed to make them ready for use. I find that CEGAT remanded the cases back for reconsideration the expert opinions. This is not similar case here. The goods in the instant cases were found to be `not raw/rough'. The goods were not subject to any expert opinion or examination and no other evidence regarding the nature of goods is available except the examination report. In the circumstances, the judgment of the CEGAT in NITCO case referred by the importers had no relevance and I find no option but to decide the case on the basis of reports available on records. For a product to be `finished' as held in NITCO case, a member of processes such as cutting, polishing, shaping etc. need to be carried out and consequently if one of the process is not carried out then the goods are not finished but in some finished state. It is evident in this case that the goods are not in raw form but some process have been carried out.

"27 On the issue of `semi-finished', I have gone through the examination report of the B/E. The goods were found not raw/rough marble slabs as declared in the Bs/E, but they were semi-finished. The import licence specifically covered `Raw Marble Slabs'. The description of the goods is not correct. It was found not according to description given in the licence. In the circumstances, the goods are liable for confiscation under Section 111 (d) & (m) of the Customs Act, 1962. As the goods were not covered under the Advance Licence produced by the importer, the benefit of Notfn. No. 203/92 Cus. which was extended to them by virtue of this licence, was not available to them and the duty not levied because of the Notification, became recoverable under Section 28(a) of the Customs Act, 1962."

and he imposed a penalty of Rs. 20 lakhs under Section 112(d) of the Customs Act, 1962 and ordered the finalization of assessment by denying the benefit of the Notification 208/92 by non-acceptance of the licences produced.

(c) When the marble goods, are not polished and cut to size and semi finished goods, they are to be considered a `Rough marble Slabs'. The word `rough' would be covering "semi-finished" as also opposed to finished goods. The words on licence have been used in a loose form to indicate the "material" that would be permissible for imports as replacement. The goods under import are found to be semi-finished. Supreme Court in case of Tata Iron & Steel Co. 1995 (53) ECC 104 (SC) : 1995 (75) ELT 3 (SC) held "4.... Semi finished may mean between raw-material and finished...". Therefore, imported marble cannot be finished. Hence, it can be only rough in case of Marble.

(d) The opinion on the imported `Slabs' being `Semi finished' is in doubt. No export advise/opinion is available on record to call the goods under import and to be understood, as other than `rough' as contra to `finished goods'. The rejection of the plea for expert opinion, by the adjudicator, was not called for. The Customs Act provides for testing of the goods and section 18 assessments as in this case, have also to be finalised, as per the provision of Section 17 of the Customs Act, 1962 which under sub-section (2) enjoins upon the proper officer to subject the goods to appropriate testing after examination of the goods. The finding of the adjudicator, on this aspect are to be set aside, it has to be held that assessment are being finalised based on no Test Report. They therefore cannot be upheld, are to be set aside, as based on no material to conclude that goods are not Rough as understood centre to finished.

(e) When the assessment arrived at, that the goods are not "rough marble slabs", is not upheld, and is set aside, and the goods under import are considered to be `rough', as they are admittedly not finished; a series of process subsequent to clearance are required to be undertaken, to convert these marble to `finished slabs'. Such steps are required, to be undertaken, is admitted. The imported goods therefore are `Rough Slabs'. The benefit of the DEEC licence and notification cannot be denied and penalties imposed upheld.

2. Consequent to the finding herein, the orders of assessment and penalty set aside and goods ordered to be cleared on the licences and under the benefit of the notification. Penalty imposed ordered to be set aside.

3. Appeal allowed.

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