Custom, Excise & Service Tax Tribunal
Clay Craft India Pvt Ltd vs Jaipur I. on 27 April, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH- COURT NO. I
CUSTOMS APPEAL NO. 54805 of 2023
(Arising out of Order-in-Original No. 1/2023-Commissioner, Customs (Prev.),
Jodhpur, Headquarter Jaipur dated 30.01.2023 passed by the Commissioner of
Customs (Preventive), Jodhpur)
M/s Clay Craft (India) Pvt. Ltd. ....Appellant
F-766, Road No. 1D, VKI Area
Jaipur - 301 019
Versus
Commissioner of Customs ....Respondent
Commissioner (Preventive), Jodhpur
Hqrs. Jaipur, NCRB, C-Scheme
Jaipur - 302 005
WITH
CUSTOMS APPEAL NO. 54923 of 2023
(Arising out of Order-in-Original No. 1/2023-Commissioner, Customs (Prev.),
Jodhpur, Headquarter Jaipur dated 30.01.2023 passed by the Commissioner of
Customs (Preventive), Jodhpur)
Vikas Agarwal ....Appellant
Director of M/s Clay Craft (India) Pvt. Ltd.
F-766, Road No. 1D, VKI Area
Jaipur - 301 019
Versus
Commissioner of Customs ....Respondent
Commissioner (Preventive), Jodhpur
Hqrs. Jaipur, NCRB, C-Scheme
Jaipur - 302 005
AND
CUSTOMS APPEAL NO. 54917 of 2023
(Arising out of Order-in-Original No. 1/2023-Commissioner, Customs (Prev.),
Jodhpur, Headquarter Jaipur dated 30.01.2023 passed by the Commissioner of
Customs (Preventive), Jodhpur)
Dharam Chand Sahu ....Appellant
Manager of M/s Clay Craft (India) Pvt. Ltd.
F-766, Road No. 1D, VKI Area
Jaipur - 301 019
Versus
Commissioner of Customs ....Respondent
Commissioner (Preventive), Jodhpur
Hqrs. Jaipur, NCRB, C-Scheme
Jaipur - 302 005
2
C/54805/2023 & 2 ors.
APPEARANCE:
Shri Madhusudan Sharma, advocate for the appellant
Shri Shiv Shankar, authorized representative of the department
CORAM : HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. S.V. SINGH, MEMBER (TECHNICAL)
Date of Hearing : 27.10.2025
Date of Decision : 27.04.2026
FINAL ORDER NO's. 50777, 50780 & 50778/2026
JUSTICE DILIP GUPTA :
Customs Appeal No. 54805 of 2023 has been filed by
M/s Clay Craft (India) Pvt.1 to assail that portion of the order dated
January 30, 2023 passed by the Commissioner that classifies the
goods imported by the appellant through six Bills of Entry under
Customs Tariff Item2 2835 26 90 instead of CTI 2510 20 30 classified
by the appellant. Accordingly, differential duty has been ordered to
be recovered under section 28(4) of the Customs Act, 19623 with
interest under section 28AA of the Customs Act and penalty under
section 114A of the Customs Act. The goods have also been
confiscated under section 111(m) of the Customs Act with an option
to redeem the same on payment of fine.
2. Customs Appeal No. 54923 of 2023 has been filed by
Vikas Agarwal, Director of the appellant to assail that portion of the
order dated January 30, 2023 passed by the Commissioner that
1. the appellant
2 CTI
3 the Customs Act
3
C/54805/2023 & 2 ors.
imposes a penalty of Rs. 10 lacs under section 114AA and a penalty
of Rs. 2 lacs upon him under section 112(a)(ii) of the Customs Act.
3. Customs Appeal No. 54917 of 2023 has been filed by
Dharam Chand Sahu, Manager of the appellant to assail that portion
of the order dated January 30, 2023 passed by the Commissioner
that imposes a penalty of Rs. 1 lac upon him under section 112(a)(ii)
of the Customs Act.
4. The appellant imported Apatite (GR) Calcium Phosphate
through six Bills of Entry during the period from May 25, 2019 to
January 29, 2020 and classified the same under CTI 2510 20 30.
5. However, a show cause notice dated March 17, 2022 was
issued to the appellant proposing to classify the goods under CTI
2835 26 90 with consequential demand of customs duty. The show
cause notice alleges that in ceramic industry calcium phosphate is
used in the production of ceramic tableware and Chapter 25 of the
Customs Tariff Act, 19754 covers only products which are in the
crude state or which have been washed (even with chemical
substances eliminating the impurities without changing the structure
of the product), crushed, powdered, levigated, shifted, screened,
concentrated by flotation, magnetic separation or other mechanical or
physical processes (except crystallization), but does not cover
products which have been roasted, calcined, obtained by mixing or
subjected to processing beyond that mentioned in each heading.
However, calcium phosphate classified under Chapter 28 of the Tariff
4 the Tariff Act
4
C/54805/2023 & 2 ors.
Act covers phosphates of calcium that include precipitated calcium
phosphate (i.e ordinary calcium phosphate). It is used in the
manufacture of glass or pottery.
6. The appellant submitted a reply to the show cause notice
and denied the allegations made therein.
7. The Commissioner relied upon the emails sent by the
suppliers to the Director and Managing Director of the appellant
wherein the suppliers stated that Apatite (GR) Calcium Phosphate
was wrongly classified under Chapter 25 earlier and their tax
department have informed that it is classifiable under Chapter 28.
In respect of these emails, the Commissioner observed as follows :
"10.3.3. The noticee's submissions that these Emails
were simply for information to them are too far
fetched and unacceptable. These Emails clearly
show that the noticee's suppliers are clear that
Apatite Calcium Phosphates being supplied by them
are not classifiable under Chapter 25 but are
appropriately classifiable under Chapter 28. Of
course, the noticee are trying to get different
names for the goods from the suppliers under
Chapter 28 as they have declared Apatite under
Chapter 25 in the earlier Bills of entry. That is the
reason, they are saying that they are unable to use the
name Apatite Calcium Phosphate for goods under CTH 28.
Yes, the noticee is correct in stating that classification is
to be decided under the Indian Customs Tariff. But the
emails exchanged clearly show that the goods
procured by them were correctly classifiable under
Chapter 28 and not under Chapter 25 as declared by
them in their earlier Bills of entry. Their malafides in
declaring goods of Chapter 28 under Chapter 25 are
clearly brought out by these emails."
[emphasis supplied]
5
C/54805/2023 & 2 ors.
8. The Commissioner also relied upon the emails dated
February 29, 2020, March 13, 2020, March 15, 2020 and March 16,
2020 wherein the Director of the appellant had requested the supplier
to remove the word 'calcination' and use the word 'heating' instead.
The Commissioner concluded that this was done to show that the
products supplied had not undergone any calcination. The
observations are :
"16. I also observe that prior to May 2019, the
assessee were importing Calcium Phosphate under
CTH 28352690. In the instant 6 bills of entry, they
declared the product as Apatite (Gr) Calcium
Phosphate and classified the same under CTH
25102030 and claimed concessional duty. After the
investigation began, they again, without any rhyme
or reason, started filing bills of entry declaring the
product as Calcium Phosphate and classifying under
CTH 28352690. For hiding the act of misdeclaration of
the goods, they have created false documents with the
assistance of their suppliers. They also approached and
obtained a favourable analysis from the CSIR, Khurja.
This clearly shows their malafide intention of manipulating
the documents when investigations were initiated against
them. Even prior to initiation of investigations, they
have deliberately and knowingly misdeclared
Calcium Phosphate as Apatite (Gr) Calcium
Phospate classified the same under CTH 25102030
and claimed concessional duty with an intent to
evade payment of duty."
[emphasis supplied]
9. The Commissioner finally held :
"19. In view of the above discussions, I have no
hesitation in holding that the goods imported by the
noticee under the 6 bills of entry in question are
Calcium Phosphate and are appropriately
classifiable under CTH 28352690. I also have no
hesitation in holding that the noticee has
deliberately and intentionally mis-classified the
goods i.e. Calcium Phosphate imported by them
6
C/54805/2023 & 2 ors.
under the 6 bills of entry with an intent to evade
duty by way of availing concessional duty
fraudulently. Had the Department not initiated
investigations against them, the said
misdeclaration and consequent evasion of duty
would not have been detected leading to loss of
revenue to the Government exchequer. The duty of
Rs. 62,73,341/- so evaded by them is liable to be
recovered from them in terms of provisions
contained under Section 28(4) of the Customs Act,
1962 alongwith interest at applicable rates, in terms
of Section 28 AA of the Customs Act, 1962. They were
required to file Bills of entry with correct description and
correct classification of the goods. In the self assessment
regime, the onus to file true and correct details in the
Bills of entry lies on the importer which they have failed
to do. In this manner, they have contravened the
provisions of Section 46(4) and Section 46(4A) of the
Customs Act, 1962."
[emphasis supplied]
10. The Commissioner thereafter confiscated the goods under
section 111(m) of the Customs Act for the reason that the description
and classification of the goods was misdeclared by the appellant
deliberately with an intent to evade payment of duty. The
Commissioner further imposed penalty under section 114A of the
Customs Act and as the appellant had misdeclared the description
and classification of the goods deliberately with intent to avail
concessional rate of duty.
11. The Commissioner also imposed penalty upon Vikas
Agarwal, Director of the appellant for the following reasons :
"22.3. As alleged in the show cause notice, Shri Vikas
Agarwal, Director was looking after all the import related
work. The e-mail communications between him and the
supplier and others shows that he manipulated/doctored
the documents to be submitted to the Customs Authority
with intent to mislead the Customs Authority with sole
7
C/54805/2023 & 2 ors.
motive of bypassing legal requirement of NOC & to evade
duty. Despite having knowledge of the fact that the goods
imported were Calcium Phosphate, he has consciously
and deliberately indulged in misdeclaration and mis-
classification of the goods imported in the name of
Apatite (GR) Calcium Phosphate under Chapter Heading
25102030 instead of Calcium Phosphate under HSN
28352690. In fact, he was even in constant touch with
the suppliers and with another person Sh. Anuj Kumar
Mittal against whom also investigations were being
undertaken by the Department for similar offence. From
his suppliers he has obtained documents and information
as per his say which suited his version in the matter.
After obtaining the same, he has also produced the same
before Customs officers investigating the matter.
Therefore, I have no hesitation in holding him to be liable
for penal action under Section 114AA."
12. The Commissioner also imposed penalty upon Dharam
Chand Sahu, Manager of the appellant for the following reasons:
23.2. Shri Dharam Chand Sahu, Manager was also
looking after work related to Import & Export. He has
also indulged in manipulation of documents and email-
communication between him and the supplier clearly
establishes that he has helped Sh. Vikas Agarwal,
Director in manipulating documents. This has also that
resulted in mis-classification of the goods imported in the
name of Apatite (GR) Calcium Phosphate under Chapter
Heading 25102030 instead of Calcium Phosphate under
HSN 28352690 leading to evasion of duty. Therefore, I
have no hesitation in holding that Shri Dharam Chand
Sahu, Manager is also liable to be penalised in terms of
Section 112(a)(ii) of the Customs Act, 1962."
13. Shri Madhu Sudan Sharma, learned counsel appearing for
the appellant made the following submissions :
(i) The appellant had imported Apatite Calcium
Phosphate from M/s Global Ceramic Material
8
C/54805/2023 & 2 ors.
Limited which deals with natural products as is
evident from the website. Harmonized System of
Nomenclature5 classification for Chapter sub-
heading 2835 at the foot note clearly states that
Natural Calcium Phosphate Apatite and Natural
Aluminium Calcium Phosphate are excluded;
(ii) The officers of the department visited the factory of
the appellant on 26.11.2020 and resumed several
documents which have been relied upon in the
impugned show cause notice. However, no sample
was drawn by the department nor any test was
conducted by the department of the imported
goods. Therefore. The entire case is based on
presumptions and assumptions.
(iii) In the absence of any test report, the department is
bound to accept the classification submitted by the
appellant on the basis of the documents and
literature supplied by the importer. To support this
contention, learned counsel placed reliance upon
the decision of the Tribunal in M/s Asian Granito
India Limited vs CC, Mundra6;
(iv) The appellant had no intention to mis-declare the
goods and there is no proof available either written
or verbal to support the contention of the
department;
5 HSN
6 Customs Appeal No. 11292 of 2017 decided on 25.08.2020
9
C/54805/2023 & 2 ors.
(v) The intimation of the supplier that Apatite Calcium
Phosphate is classifiable under Chapter 28 as per
their tax department is based on their internal tax
section;
(vi) In respect of the correspondence with the supplier,
the appellant was trying to clear doubts and had
never asked them to mis-declare the goods to be
supplied by them. Manipulation of any document
was not done by the appellant and the goods were
correctly declared as Apatite Calcium Phosphate;
(vii) The material imported by the appellant is mined
and is called Apatite Calcium Phosphate, which is in
the raw form. It is then washed, dried, and heated
to remove impurities but the chemical formula
remains the same as no chemical change occurs
during the entire process. The Apatite Calcium
Phosphate and Calcium Phosphate are chemically
the same product which have three portions of
phosphate. Thus the chemical name is Tri Calcium
Phosphate which is commercially known as Apatite
Calcium Phosphate/Calcium Phosphate and is called
TCP in short;
(viii) During the investigation, the officers summoned
Vikas Agarwal and Dharam Chand Sahu several
times and recorded their statements on various
occasions. These two did not accept that the goods
10
C/54805/2023 & 2 ors.
imported through the six Bills of Entry were Calcium
Phosphate and not Apatite Calcium Phosphate;
(ix) The technical expert had clearly opined that
calcined material cannot be used for manufacture of
ceramic tableware. The appellant is engaged in the
manufacture of ceramic tableware and the imported
goods were used in the manufacture of the final
products; and
(x) Even natural calcium phosphate is classified under
sub-heading 2510 20.
14. Shri Shiv Shankar, learned authorized representative
appearing for the department, however, supported the impugned
order and made the following submissions :
(i) The scope of Chapter 25 is limited to crude natural
products. The goods that have undergone calcination,
roasting, thermal decomposition or chemical
processing are excluded from Chapter 25;
(ii) The evidence on record establishes that the imported
goods were subjected to calcination and high-
temperature processing (800-900°C), which alters the
crystalline structure of natural phosphate. The
correspondence of the supplier explicitly referred to
the operation of a calciner and acknowledged quality
issues arising therefrom, confirming that the product
was thermally processed. Calcination, being a process
of controlled thermal decomposition, transforms the
11
C/54805/2023 & 2 ors.
natural mineral into a chemically modified product,
thus bringing it squarely under CTI-2835 26 90 (Other
phosphates of calcium) within Chapter 28;
(iii) Both the product data sheet of the supplier and the
own documentation of the appellant describe the
goods as Tri-Calcium Phosphate7. TCP is a chemically
defined compound and is specifically enumerated
under Heading 2835 - "Phosphinates, phosphonates,
phosphates and polyphosphates". Therefore,
classification under Chapter 28 is not only consistent
with the nature and chemical composition of the
product but also mandated by the systematic and
scientific interpretation under the Tariff;
(iv) E-mails exchanged between the appellant and the
overseas supplier reveal that the supplier's European
Head Office and Tax Department had categorically
advised that the product "Apatite (Ground) Calcium
Phosphate" had been wrongly classified under Chapter
25 and that the correct classification was under
Chapter 28. Despite such knowledge, the appellant
persisted in declaring the goods under Chapter 25,
thereby availing an illegitimate concessional rate of
duty (5% instead of 18%);
(v) The following will demonstrate a concerted effort by
the appellant to fabricate and modify documents to
conceal the true nature of the goods :
7 TCP
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C/54805/2023 & 2 ors.
(a) The importer requested the supplier to remove
references to calcination and to "back-date"
technical data sheets by 1-2 years;
(b) The importer sought alternative product
descriptions ("Calcium Phosphate Grade-1"
instead of "Apatite (GR) Calcium Phosphate") to
avoid suspicion during customs clearance; and
(c) The directive to declare all CP material as
"uncalcined" despite factual processing
constitutes clear evidence of mens rea and intent
to mislead.
(vi) The correct classification under CTI 2835 26 90
attracts not only a higher rate of duty but also the
requirement of a No-Objection Certificate (NOC) from
the Drug Control Department under the Drugs and
Cosmetics Act, 1940. The deliberate choice to
misclassify under Chapter 25 was thus intended both
to evade payment of duty and to circumvent
mandatory import controls;
(vii) Vikas Agarwal, Director of the appellant was directly
responsible for overseeing all import related activities
of the company, including classification,
documentation, and correspondence with foreign
suppliers;
(viii) The e-mail communications retrieved during
investigation between Vikas Agarwal, the supplier (M/s
Global Supplies), and other associated persons clearly
demonstrate his active involvement in manipulating
and fabricating documents intended for submission
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C/54805/2023 & 2 ors.
before the Customs Authorities. The intent behind such
manipulation was to mislead the Department, thereby
bypassing the statutory requirement of obtaining a No
Objection Certificate (NOC) from the Drugs Control
Department and to evade payment of legitimate
Customs duty;
(ix) Despite being fully aware that the imported goods
were calcined calcium phosphate and correctly
classifiable under CTI 2835 2690, Vikas Agarwal
consciously and deliberately misdeclared and
misclassified the same as Apatite (GR) Calcium
Phosphate under CTI 2510 2030, availing a
concessional duty rate;
(x) The evidence further establishes that Vikas Agarwal
was in continuous communication not only with the
supplier, but also with Anuj Kumar Mittal, another
importer under investigation for a similar offence,
thereby suggesting collusion and shared intent to
misdeclare goods. It is evident that Vikas Agarwal
procured documents and technical data from the
supplier in accordance with his own instructions,
ensuring that such documents supported his false
version regarding the classification of the goods. He
subsequently submitted these manipulated materials
to the investigating officers in an attempt to
substantiate his misdeclaration;
14
C/54805/2023 & 2 ors.
(xi) Dharam Chand Sahu, Manager of the appellant was
responsible for handling the import and export
operations of the company, including documentation,
correspondence with suppliers, and coordination of
import clearances;
(xii) The investigation revealed that Dharam Chand Sahu
actively assisted Vikas Agarwal, Director of the
appellant in the manipulation and fabrication of import
related documents and in the preparation of
misleading communications with the overseas supplier.
The email correspondence between Dharam Chand
Sahu and the supplier establishes his direct
involvement in drafting and altering documents in a
manner intended to support the false declaration of
the goods as Apatite (GR) Calcium Phosphate under
CTI 2510 20 30, instead of their correct classification
as Calcium Phosphate under CTI 2835 26 90; and
(xiii) The role of Dharam Chand Sahu amounts to abetment
of an act rendering the goods liable to confiscation
under section 111 of the Customs Act. His conduct
clearly attracts penal consequences under section
112(a)(ii) of the Customs Act, as he knowingly
participated and assisted in the commission of the
offence.
15. The submissions advanced by the learned counsel
appearing for the appellant and the learned authorized representative
appearing for the department have been considered.
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C/54805/2023 & 2 ors.
16. The issue that arises for consideration is whether the
goods imported by the appellant and declared as Apatite (GR)
Calcium Phosphate under CTI 2510 20 30 were correctly classified by
the appellant or deserve to be classified under CTI 2835 26 90, as
claimed by the department.
17. Heading 2510 of the Tariff Act deals with "natural calcium
phosphates, natural aluminium calcium phosphates, and phosphatic
chalk". The description of the goods under CTI 2510 20 30 is
"natural calcium phosphates apatite"
18. On the other hand, Heading 2835 of the Tariff Act deals
with "Phosphinates (hypophosphites), phosphonates (phosphites) and
phosphates; polyphosphates, whether or not chemically defined".
The relevant portion of the tariff entries are reproduced below :
Tariff Item Description of Goods Unit Rate of Duty
Standard Preferential
(1) (2) (3) (4) (5)
2835 Phosphinates (hypophosphites),
phosphonates (phosphites) and
phosphates; polyphosphates, whether
or not chemically defined
2835 10 - Phosphinates (hypophosphites) and
phosphonates (phosphites
2835 10 10 --- Calcium hypophosphite. . . . . . . . . . . kg. 7.5% -
2835 10 20 --- Magnesium hypophosphite. . . . . . . . kg. 7.5% -
.
2835 10 90 --- Other . . . . . . . . . . . . . . . . . . . . . . . kg. 7.5% -
- Phosphates :
2835 22 00 -- Of mono-or disodium. . . . . . . . . . . .. kg. 7.5% -
2835 24 00 -- Of potassium. . . . . . . . . . . . . . . . . . kg. 7.5% -
2835 25 00 -- Calcium hydrogenorthophosphate kg. 7.5% -
("dicalcium phosphate"). . . . . . . . . ..
2835 26 -- Other phosphates of calcium :
2835 26 10 --- Calcium monobasic phosphate. . . . . . kg. 7.5% -
2835 26 20 --- Calcium tribasic phosphate. . . . . . kg. 7.5% -
2835 26 90 --- Other . . . . . . . . . . . . . . . . . . . . . . . kg. 7.5% -
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19. The HSN Explanatory Notes to Chapter 25 restrict the scope of the products to products which are in the crude state or which have been subjected merely to mechanical or physical processes, such as, washing, crushing, grinding or screening, without altering the chemical structure of the substance. Goods that have undergone calcination, roasting, thermal decomposition or chemical processing stand excluded from Chapter 25, unless expressly provided.
20. Chapter 28, on the other hand, covers phosphates of calcium that include precipitated calcium phosphate i.e ordinary calcium phosphate and is used in the manufacture of glass or pottery.
21. The impugned order has placed much reliance on the emails exchanged between the appellant and the suppliers. After consideration of the emails dated April 06, 2019, February 12, 2020 and February 13, 2020, the Commissioner drew a conclusion that the emails show that the suppliers of the appellant are clear that apatite calcium phosphate supplied by them to the appellant are not classifiable under Chapter 25, but are appropriately classifiable under Chapter 28. The emails also show that the appellant had requested the supplier that they are unable to use the name "Apatite Calcium Phosphate" for goods under Chapter 28. What is also important to note is that in the email dated February 29, 2020, the appellant requested the supplier to remove the line that mentions that "the product is classified by the chemical and taxable department of the supplier under Chapter 28".
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22. The Commissioner has also referred to the email dated February 13, 2020 sent by the supplier. The relevant portion of this email is reproduced below :
"Technical......The waterground Phosphates of calcium grade utilises the basic Calcium Phosphate material which is then further processed via a ball mill and a series of chemical additions to render the material suitable for the world's premier producers of fine bone china tableware such as Wedgwood, Noritake, Villeroy&Boch, to name but three. This product carries a price premium over Calcium Phosphate due to its ability to maximize client yields in modern automatic production lines. This material is also classified under HS Code 28 35 26 90 due to the use of the Calcium Phosphate raw material....If above is acceptable then Tracey can provide you with a list of invoice numbers, volumes and dates since Clay Craft started purchasing material from Global in April 2019. This will not include the invoice for CC2004 as per your Whatsapp message.........lf the above is acceptable and needs to be printed tomorrow our Operation Director can sign the document vis pp in my absence and Trace can sent the scan copy on a letterhead."
23. This email sent by the supplier mentions the processes that basic calcium phosphate has undergone, including the chemical additions that has rendered the material suitable for fine bone china tableware and that product would be classifiable under CTI 2835 26
90.
24. In the email dated March 15, 2020, Vikas Agarwal requested the supplier to remove the word 'calcination' and use 'heating' instead. This clearly shows that the supplier was asked to state that the product supplied had not undergone calcination because if the process of calcination had been undertaken, the 18 C/54805/2023 & 2 ors.
product would be classified under Chapter 28 and not under Chapter
25.
25. In connection with investigation carried out by the department against another importer, namely, Mudrika, emails dated September 11, 2020 and September 12, 2020 were also exchanged between Vikas Agarwal, Director of the appellant and Anuj Kumar Mittal, Director of the Mudrika. In the context of these emails, the Commissioner has observed :
"10.9.............Discussion between Sh. Vikas Agarwal and Sh. Anuj Kr Mittal of Mudrika against whom also investigation by DRI is undertaken. The words "all the CP material need to be declared uncalcined" and "No where we have to admit that there was some mistake or something" clearly shows that they are aware of the mistake and that the products earlier imported were actually calcined.
11. All these Emails have been shown to Sh. Vikas Agarwal, Director during his statements and he has admitted that these emails were true and had been exchanged by him with the suppliers. I also find that during the course of investigations, the noticee did not submit these Email communications. The investigations got hold of these Emails through DRI who were investigating a different importer M/s Mudrika. Thus, the claim of the noticee that they had come clean on the issue and their bonafides were established because of these Emails is not correct."
26. From all the aforesaid emails, the Commissioner concluded :
"12. From these evidences, it is clearly evident that the goods that had been imported in the past, under the cover of the six Bills of entry in question, were calcined. The other aspect, that is emerging is that their supplier is also sure that Apatite (Gr) Calcium Phosphate, which they had supplied under the six Bills of entry in question, were also calcined 19 C/54805/2023 & 2 ors.
and were appropriately classifiable under CTH 28352690. They have quite categorically confirmed that there has been a mistake and as per their HQs and the Taxation Department, the Apatite (Gr) Calcium Phosphate appropriately fall under CTH 28 and not under CTH 25. In fact, the Mudrika decision of Commissioner Appeals has also been considered by their suppliers before arriving at the conclusion that the goods supplied were correctly classifiable under CTH 2835, the six consignments in dispute or the goods that they were to supply subsequently. The conclusion drawn is that whether the goods are named as Calcium Phosphate or as Apatite (Gr) Calcium Phosphate, the same are correctly classifiable under CTH 28352690.
16. I also observe that prior to May 2019, the assessee were importing Calcium Phosphate under CTH 28352690. In the instant 6 bills of entry, they declared the product as Apatite (Gr) Calcium Phosphate and classified the same under CTH 25102030 and claimed concessional duty. After the investigation began, they again, without any rhyme or reason, started filing bills of entry declaring the product as Calcium Phosphate and classifying under CTH 28352690. For hiding the act of misdeclaration of the goods, they have created false documents with the assistance of their suppliers. They also approached and obtained a favourable analysis from the CSIR, Khurja. This clearly shows their malafide intention of manipulating the documents when investigations were initiated against them. Even prior to initiation of investigations, they have deliberately and knowingly misdeclared Calcium Phosphate as Apatite (Gr) Calcium Phosphate classified the same under CTH 25102030 and claimed concessional duty with an intent to evade payment of duty.
19. In view of the above discussions, I have no hesitation in holding that the goods imported by the noticee under the 6 bills of entry in question are Calcium Phosphate and are appropriately classifiable under CTH 28352690. I also have no hesitation in holding that the noticee has deliberately and intentionally mis-classified the goods i.e. Calcium Phosphate imported by them under the 6 bills of entry with an intent to evade 20 C/54805/2023 & 2 ors.
duty by way of availing concessional duty
fraudulently. Had the Department not initiated
investigations against them, the said misdeclaration and consequent evasion of duty would not have been detected leading to loss of revenue to the Government exchequer. The duty of Rs. 62,73,341/- so evaded by them is liable to be recovered from them in terms of provisions contained under Section 28(4) of the Customs Act, 1962 alongwith interest at applicable rates, in terms of Section 28AA of the Customs Act, 1962. They were required to file Bills of entry with correct description and correct classification of the goods. In the self assessment regime, the onus to file true and correct details in the Bills of entry lies on the importer which they have failed to do. In this manner, they have contravened the provisions of Section 46(4) and Section 46(4A) of the Customs Act, 1962."
[emphasis supplied]
27. It is, therefore, clear that the Commissioner concluded that the goods imported through the six Bills of Entry were calcined and would not fall under Chapter 25 of the Tariff Act and will fall under Chapter 28 of the Tariff Act. This inference also finds support from the communication sent by the supplier that since the goods were calcined, they would be appropriately classifiable under CTI 2835 26
90. It is also seen that prior to May, 2019 the appellant imported calcium phosphate under CTI 2835 26 90 and after investigation again started filing Bills of Entry declaring the product as 'calcium phosphate' and classified it under CTI 2835 26 90. It is only in respect of the six Bills of Entry during the interregnum period that the appellant described the product as Apatite (GR) Calcium Phosphate in the six Bills of Entry and classified it under CTI 2510 20 30.
28. The aforesaid conclusions have been drawn by the Commissioner from the emails that were exchanged between the 21 C/54805/2023 & 2 ors.
appellant and the supplier and cannot be said to be perverse. The emails clearly show that even the supplier was of the opinion that the goods were classifiable under Chapter 28 and not under Chapter 25 and that calcination process had been undertaken. The appellant objected to the use of the word 'calcination' by the supplier with the sole purpose of making out a case that the goods would be classifiable under Chapter 25.
29. There was no occasion for the department to have carried out tests of the goods that were imported because they had been cleared and investigation had started later. The emails exchanged between the appellant and the suppliers clearly show that the appellant was trying to manipulate the records with the intention of evading appropriate customs duty. The Commissioner was, therefore, justified in holding that the appellant deliberately misdeclared the description of the goods and its classification with the sole intention of evasion of duty. The impugned order, therefore, directs for payment of differential duty and, therefore, does not call for any interference.
30. The next issue that arises for consideration is whether the goods were liable to confiscation under section 111(m) of the Customs Act. As the goods did not correspond in respect of the value and other particulars declared in the Bills of Entry, they were liable to confiscation but since they were not available for confiscation, a fine of Rs. 70 lacs in lieu of confiscation was correctly imposed upon the appellant.
22
C/54805/2023 & 2 ors.
31. Penalty under section 114A of the Customs Act has also been correctly imposed upon the appellant as the appellant had misdeclared the description of the goods deliberately with an intent to avail concessional rate of duty and thereby to evade payment of duty.
32. The impugned order has also given cogent reasons for imposing penalty on Vikas Agarwal, Director of the appellant under section 112(a)(ii) of the Customs Act. As would be seen from the impugned order, the relevant portion of which have been reproduced above, the email communications show that Vikas Agarwal manipulated the documents to be submitted to the customs authorities intentionally and obtained documents from the supplier to suit his version. Therefore, imposition of penalty on him under section 114AA of the Customs Act is justified.
33. The imposition of penalty upon Dharam Chand Sahu, Manager of the appellant under section 112(a)(ii) of the Customs Act is also justified as it has been found from the email communications that he helped Vikas Agarwal in manipulating the documents.
34. There is, therefore, no error in the impugned order. All the three appeals are, accordingly, dismissed.
(Order pronounced on 27.04.2026) (JUSTICE DILIP GUPTA) PRESIDENT (S.V. SINGH) MEMBER (TECHNICAL) Golay