The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench, while setting aside the redemption fine and penalties imposed on Rajkamal Industrial Pvt Ltd, has held that base oil SN50 cannot be classifiable as High-Speed Diesel (HSD).
The appellant had imported base oil SN50 vide vessel Al Heera and had filed bills of entry by classifying the above product under CTH 27101960. While concluding the proceedings, the Commissioner of Customs, Kandla passed an order wherein he reclassified the imported goods under CTH 27101930 as HSD and confiscated the imported goods with an option to re-export on payment of fine of Rs. 3.50 Crores and imposed a penalty of Rs. 2 crores on the appellant and Rs.50 Lakhs each on the two directors of the appellant under 112(a) of the Customs Act.
After hearing arguments from both sides, Judicial Member Mr. Ramesh Nair and Technical Member Mr. Raju held that the customs department ought to have established that the imported base oil can be used as HSD/ Automotive fuel in internal combustion engines but the adjudicating authority could not establish that the imported product can be used as HSD or automotive fuel and he kept silence on this aspect.
Noting the Apex Court decision in a similar case, the Tribunal allowed the plea of the appellant and held that “as per our above discussion and finding we hold that the goods are not classifiable as HSD under CTH 271031930. Consequently, the claim of the appellant for the classification of goods as base oil under CTH 271019160 is maintained. The appellant has submitted that irrespective of the decision of classification they seek permission to re-export of goods. Though we have decided the classification as claimed by the appellant in their favor but as per the concession made by the appellant we allow the appellant to re-export the goods.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
