Custom, Excise & Service Tax Tribunal
M/S. Kushalchand & Co vs The Commissioner Of Customs on 29 October, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE Stay and Appeal No: C/Stay/1005/2010 in C/1724/2010 (Arising out of Order-in-Original No. 05/2010 dated 16/20.07.2010 passed by the Commissioner of Customs, Mangalore) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Kushalchand & Co Appellant Vs. The Commissioner of Customs Mangalore Respondent
Appearance Smt. Rukmani Menon, Advocate, for the appellant Shri D.P. Nagendra Kumar, JCDR, for the Respondent CORAM MR. M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing:29.10.2010 Date of decision:29.10.2010 STAY ORDER No._______________________2010 FINAL ORDER No._______________________2010 Per M.V. Ravindran This is an appeal filed by the petitioner under section 129 (1) of the Custom Act, 1962 against the order of the Commissioner of Customs, Mangalore bearing No. 5/2010 dated 16/7/2010 in a remand back case in Final Order No.1553/09 dated 29/12/2009 for the limited purpose of examining the amendment sheets of DFIAs and any other relevant clarification/circular to adjudicate the matter afresh following the principles of natural justice.
2. Heard both sides.
3. The following are the brief facts of the case. The appellants are traders and during the course of their business, had imported 'Cocoa Powder' and sought clearance under the following Duty Free Import Authorizations issued against export of Biscuits.
(a) 0310444317 dated 26/9/2007
(b) 0310428441 dated 1/5/2007
(c) 0310428434 dated 1/5/2007
4. The appellants are bonafide transferees of the aforesaid authorizations. One of the items allowed to be imported is Flour, which is appearing in the authorizations as an input item, issued under Customs Notification No 40/2006 dated 1/5/2006 .
5. The appellants submitted these authorizations for clearance of their import consignment of Cocoa Powder against the input item "Flour" under Bill of Entry Nos. 230412 and 230413. The respondents did not accept the contention of the appellant and issued a letter dated 19/5/2009 informing that the said authorizations does not cover the imported item Cocoa Powder and hence cannot extend the benefits of notification.
6. The appellant, however, approached the Tribunal with an appeal, and Tribunal had directed the department vide Final Order No. 1162/2009 dated 24/9/2009, without expressing any opinion on merits, remanded the case back with a direction to the Commissioner to hear the appellant on the issue and pass a speaking order at the earliest.
7. The Commissioner, after hearing the appellant, passed an Order No. 14/2009 dated 6/11/2009 rejecting the contentions of the appellant and thereby denying the benefit of Custom Notification for extending the duty benefits.
8. The appellant then filed an appeal before this Tribunal challenging the aforesaid order on various grounds.
9. The Hon. CESTAT, after hearing both sides on the matter, vide Final Order No. 1553/09 dated 29/12/2009, held as under:
After hearing both the parties and on going through the written submissions, we are of the opinion that the term Flour and 'Powder' are synonymous, and the flour can therefore be interpreted on a wider scale and cannot be restricted to any powder of a particular grain or nut. From the various dictionary meanings and other available information, it is fairly clear that the imported item Cocoa Powder is covered under the description of the input item 'flour' as appearing under the said DFIAs. Therefore there is force in the contention of the appellant that the imported item Cocoa powder is a flour and covered under the description of the license. Therefore the only issue left before us is with regard to chapter headings which according to the appellant are of no relevance to a transferee since no CTH number are appearing on the amendment sheets, after the licenses are transferred by the licensing authorities, amending actual user conditions.
We find that DFIA produced before the Commissioner covered, among others, maida/atta/flour of ITCHS code 19019090. The amendment sheets since received cover mostly goods which appeared in the original DFIA import item list, but without the ITCHS code against each entry as in the original license. We find that as per Chapter Note 2 (b), Chapter 19 covers, flour, meal and powder of vegetable origin of any chapter, other than flour, meal or powder of dried vegetables (heading 0712) of potatoes (heading 1105) or of dried leguminous vegetables (heading 1106). As the impugned order was passed without the commissioner seeing all the amendment sheets now produced before us, we are of the opinion that the matter should be remanded back to the Commissioner of Customs, Mangalore for examining the amendment sheets and any other relevant clarification/circular to adjudicate the matter afresh following the principles of natural justice.
10. The Commissioner, Mangalore, consequent upon the remand back order, heard the appellant and examined the amendment sheets of the aforesaid DFIAs and passed a detailed order once again rejecting the contentions of the appellant vide order No. 05/2010 dated 16/7/2010.
11. The appellant once again challenged the aforesaid order.
12. The Ld. Advocate for the appellant submitted that the Commissioner has exceeded his jurisdiction by going against specific directions given by the CESTAT in the remand order for the limited purpose of examination of amendment sheets of 3 DFIAs produced by the appellant.
12.1. The Ld. Advocate further stated that the Commissioner, apart from examining the amendment sheets of the DFIAs with respect to ITC HS Nos., however, had gone beyond the scope of the remand order and also dealt with the issue whether 'cocoa powder' imported by the appellant was covered by the term Flour in the DFIA in great detail, when the issue was already settled by the Hon. Tribunal in Final Order No. 1553/09 dated 29/12/2009.
12.2. The Ld. Advocate submitted that the amendment sheets issued by DGFT are part and parcel of the original DFIA and cannot be seen as piecemeal documents and the whole set of documents are to be seen as a single document before clearance of the consignment and, therefore, the observation of the Commissioner of Customs, Mangalore, regarding primacy of original DFIA over amendment sheets are totally incorrect and improper.
13. Heard the Jt. CDR reiterating the findings of the adjudicating authority.
14. We have carefully considered the submissions made by both the parties. It is clear that this Tribunal had already settled the issue of whether 'Cocoa Powder' is covered under the description of input item Flour permitted under the DFIA issued against export of Biscuit in order No. 1553/09. Therefore, the action of Commissioner going beyond the scope of remand order is highly deplorable and is not permitted under law. The Commissioner has been specifically directed to look into the limited aspect of examining the amendment sheets of DFIA wherein it was observed that No ITC (HS) Numbers were mentioned. It may also be noted that it is not proper for the Commissioner of Customs, Mangalore, to rely upon his predecessors order, which had already been set aside by the CESTAT. On specific query from the Bench, it was informed that the tribunal's order dated 29/12/2009 is not challenged before higher juridical fora.
15. Having examined that the original amendment sheets of DFIAs thereto had been duly attested and authenticated by the Jt. DGFT, Mumbai and confirming the same, the commissioner has once again dealt with the whole issue very extensively which is clearly beyond the scope of the remand back order.
16. It is well settled in law that classification/clarification on Import Policy issued by Office of the Director General of Foreign Trade are binding on Customs as far as ITC Policy is concerned even if such clarifications are signed by Joint Director General of Foreign Trade, as affirmed by the Hon. Supreme court in the case of Commissioner of Customs Vs. Cine Land-2000 (120 ) ELT A67 by not granting stay on CEGAT Order reported in 1999 (114) ELT 653 (Tribunal).
17. The Ld. Advocate has correctly stated that amendment sheets do have precedence over the previous document, which is exactly for the purpose for it is being issued. Therefore, the observation of Commissioner in going beyond the scope of the license is clearly unwarranted.
18. Accordingly, the impugned Order-in-Appeal is set aside and the appeal is allowed with consequential reliefs, if any. With this, stay application also gets disposed off.
(Operative portion of the order pronounced in open Court on conclusion of hearing on 29.10.2010) (B.S.V. MURTHY) Member (T) (M.V. RAVINDRAN) Member (J)