Case: Commissioner of Customs, Pune Vs. M/s Ballarpur Industries Ltd

Schedule to the Customs Traffic Act 1975, originated in, or exported from, Korea R.P. are chargeable to Anti-dumping Duty @ US $ 0.0689 per Kg. In view of the fact that the goods covered under five Bills of Entry referred as above ·are found as STYRENE BUTADlENE RUBBER of 1900 series as confirmed by IRMRA Test Report dated 06.03.2006 and the goods are of Korea R.P. origin, the goods become chargeable to Anti-dumping duty @ US $ Q.0689 per kg as per Notification No: 100/2004 dated· 28.09.2004. Paragraph 4 of the Notice contains similar allegations that: 4. Whereas the goods imported in question were declared as LUTEX 701 in import documents and, not as Styrene Butadiene Rubber (SBR) of 1900 Series which has been confirmed by Test Report dated 06.03.2006 from IRMRA. The importer is regular importer of subject goods and are actual users of the goods and therefore they should be well aware of the description of the goods imported and the duty liability thereon. Therefore it appeared that the Importer mis declared the description of the goods as TUTEX 701 instead of as Styrene Butadiene Rubber (SBR) of 1900 Series with the intention to evade the Anti Dumping Duty. At the time of filing of Dills of Entry, the Importer did not come up with full a.id complete description of the goods imported. If the Importer had declared the complete and proper description of the. goods at the time of filing of Bills of Entry, the Anti Dumping duty would have been levied at the time of provisional assessment. Therefore it appears to be a case of suppression of facts on the part of the Importer by not declaring proper description of the goods and mis declaring the description of the goods as LUTEX-701 against proper description as 4 Styrene Butadiene Rubber (SBR) of 1900 Series. As importer is an actual user of the goods ii question and was aware of the Anti Dumping duty notification no: 100/2004 issued on 28.09.2004 at the time of filing of import documents, it appears that the importer willfully did not declare the proper and complete description of the goods in import documents with the intention to evade the Anti dumping duty. A similar allegation was contained in the second show cause notice. The Commissioner of Customs specifically dealt with the contents of the test reports in paragraph 6.2 of the order dated 17 October 2006, which is extracted below: 6.2 As has been extracted at paras 4 and 5 supra, the said Importer has heavily argued that the Test Reports of IRMRA are Inconclusive and have sought for the cross examination of the official of the IRMRA. For the reasons recorded here under, I am not persuaded by these arguments of the said Importer. As per the facts, it may be seen that, initially, samples of Lutex 701 and Lutex 780 were drawn for tests to be done by the Dy. Chief Chemist, CCRL Nhava Sheva to ascertain (1) composition (2). percentage of Styrene, and (3) whether the goods are Styrene Butadiene Rubber of 1900 series. The Dy. Chief Chemist CRCL vide his report dated 30th June, 2005, for the product, Lutex 701, informed that the samples In the form of white coloured liquid. It Is an aqueous emulsion based on synth1tic resin - Styrene Butadiene type solid contents = , 54.5°/o. For content of Syrene, sample may be forwarded to some rubber testing laboratory Similarly, In his report dated 5th July, 2005, relating to the samples of Lutex 780 it was informed by the Dy. chief Chemist, CRCL, that The· sample is in the form of white liquid. It. is an aqueous· emulsion of Styrene Butadiene, For content of Styrene, sample may be forwarded to rubber testing laboratory; 16. The Commissioner also recorded in paragraph 6.4 that the importer had also approached IRMRA independently for testing the samples of Lutex 701 and 780 in their control. A similar finding was arrived at by IRMRA from the samples furnished by the importer. Paragraphs 6.4 of the decision of the Commissioner reads as follows : 6.4 It may be pertinent to again mention here that the said Importer themselves had also approached the IRMRA for an independent testing of the samples of Lutex 701 and Lutex 780 which were in their control and the said IRMRA, vide their Evaluation Report dated 14.09.2006, for the same goods under the control of the said Importer and which are also covered under the First Notice and the Second Notice conveyed the results thereof to the said Importer wherein the Styrene content was observed to be 64.44% and 66.75% respectively for Lutex 701 and Lutex 780. In this background, the Commissioner held: 6.5 Thus, It may be seen that when the said Importer got the Impugned goods tested on his own from the same laboratory where the department had sent the goods for ascertaining the Styrene content, in the imported Lutex 701 and Lutex 780, the styrene content was reported to be above, 60%. None of the above findings have been displaced in the order of the Tribunal. The Tribunal has not looked into the merits of the appeals at all on the facetious ground that the show cause notice did not contain any basis to doubt the classification of the goods and that while issuing the notice, the adjudicating authority had not examined the classification based on the report of the laboratory. The findings of the Tribunal are contrary to the record and cannot therefore be sustained. 17. At the same time, since the Tribunal has not considered the case of the respondent in appeal on merits, we are of the considered view that it would be appropriate to restore the proceedings back to the Tribunal for the purpose. In order to facilitate a fresh decision on remand, we have recorded the broad submissions of the contesting parties on the merits as well but leave open the matter for evaluation by the Tribunal on remand.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]11. In the present proceedings, there is no dispute about the position that the product under consideration of the Designated Authority was SBR of 1500, 1700 and 1900 series falling under CTH 4002.19 of the Customs Tariff Act 1975 but not goods covered by the CTH 40021100. The Tribunal, as is evident from the two extracts of its decision which have been reproduced earlier came to the conclusion that:(i) No basis was indicated in the show cause notice to disturb the classification claimed by the respondent as the result of which the declaration by the respondent that the goods fell under CTH 40021100 remained untouched; and(ii) While issuing the notice to show cause, the adjudicating authority had not examined the classification based on the Laboratory report.15. The Tribunal has set aside the decision of the Commissioner of Customs on an evidently superficial evaluation of the issues raised in the appeals. The Tribunal came to the conclusion that there is no whisper of any reason in the Show Cause Notice to disturb the classification claimed by the importer. This finding is contrary to the record.None of the above findings have been displaced in the order of the Tribunal. The Tribunal has not looked into the merits of the appeals at all on the facetious ground that the show cause notice did not contain any basis to doubt the classification of the goods and that while issuing the notice, the adjudicating authority had not examined the classification based on the report of the laboratory. The findings of the Tribunal are contrary to the record and cannot therefore be sustained.17. At the same time, since the Tribunal has not considered the case of the respondent in appeal on merits, we are of the considered view that it would be appropriate to restore the proceedings back to the Tribunal for the purpose. In order to facilitate a fresh decision on remand, we have recorded the broad submissions of the contesting parties on the merits as well but leave open the matter for evaluation by the Tribunal on remand.