Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Import), ... vs M/S. Amrit Corp. Ltd on 22 January, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/86898/2014-MUM (Arising out of Order-in-Appeal No. 316(Gr.V)/2014(JNCH)/IMP-297 dt. 10.2.2014 passed by the Commissioner of Customs (Appeals), Mumbai-II Nhava Sheva ) For approval and signature: Honble Mr. Anil Choudhary, Member (Judicial) ============================================================
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 Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
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Commissioner of Customs (Import), JNCH, Nhava Sheva
:
Appellant
VS
M/s. Amrit Corp. Ltd.
:
Respondent
Appearance
Shri S.J. Shahu, Assistant Commissioner (A.R.) for Appellant
Shri V.S. Sejpal, Advocate (A.R) for respondent
CORAM:
Mr. Anil Choudhary, Member (Judicial)
Date of hearing : 22/01/2015
Date of decision : 22/01/2015
ORDER NO.
Revenue is in appeal against order of the Commissioner (Appeals) No. 316(Gr.V)/2014(JNCH)/IMP-297 dt. 10.2.2014 whereby the Ld. Commissioner (Appeals) was pleased to set aside the redemption fine and penalty.
2. The Brief facts are the respondent-assessee company is engaged in the business of manufacture and processing of Milk and Milk Products vide purchase contract. They have entered into with Thimonnier, France for import of Automatic Aseptic Machine for UHT Liquid Milk and Liquid Milk Products in Pillow Pouches. On arrival of the machine the respondent-assessee filed Bill of Entry on 21.5.2013 wherein claiming CVD benefit @0% under Sr. No.245 of the Notification No. 12/2012-CE. The goods were examined by the Docks Officials on 23.5.2013 along with SIIB (Imports) and asked to furnish catalogue and explain the goods. The importer had classified the goods under CTH 84341000. The respondent-assessee already clarified that it was bona fide mistake and they were ready to pay the differential duty vide their letter dt. 23.5.2013 addressed to the Assistant Commissioner of Customs, that there appears to be mistake in their claim of concessional duty and accordingly requested that no show cause notice be issued and the goods to be assessed on First Check Assessment. Instead of re-assessing the goods as per Section 17(4), proceeded to seize the goods under seizure on 28.5.2013, and the goods were examined on 29/5/2013 thereafter personal hearing was provided to the respondent on 6.6.2013 wherein again the respondent made detailed submission to the effect that there was no mala fide intention in their claim for concessional duty and understanding that they are eligible for the same, they have offered to pay the differential duty on first check assessment, should have been completed. It was further alleged that there is no mala fide claim made by the importer as the machine was prima facie design for packing of milk and clause 4.1 of the purchase contract specifically mentioned that For avoidance of doubt, the parties declare that the Equipment is purchased with a purpose and under condition that the Equipment will fill UHT liquid milk and liquid milk products and will comply with other requirements set out in this contract. Further, in the definition clause under material defects, it was specifically mentioned that Sterility test as under to be complied.
Sterility test Sample size for each of the four trial will be 1000 packs. Of these 10% will be kept under incubation at 37 deg C for 7 days and balance 90% will be kept at room temperature and opened at regular intervals of 4 days till shelf life.
Acceptability Criteria :
Leaking Rate <0.1% Standard Plate Count/ml/-Nil Spores :- Nil This is unintentional bona fide and inadvertently claimed, and withdrawn. Vide Order-in-Original dt. 7.6.2013 the matter was adjudicated, and it was held that there is mala fide intention on the part of the assessee and the assessee have given mis-declaration, and accordingly the machine was ordered to be confiscated, the value at Rs.3,15,45,330/- under Section 111(m) of the Customs Act with an option to redeem the goods on payment of Rs. 15,00,000/- and further penalty of Rs.5,00,000/- was imposed under Section 112(a) of the Customs Act of the Customs Act, 1962. Being aggrieved, the respondent-assessee preferred an appeal before the Commissioner (Appeals), who have decided in favour of the respondent-assessee and have recorded the following findings.
I find the appellant had filed the subject Bill of Entry 2192329 dt. 21.05.2013 under Self-Assessment Scheme, classifying the impugned goods under Chapter heading 84341000 and claiming CVD benefit @0% under Sr. No. 245 of the Notification No. 12/2002-CE. It is on record that the importer, vide letter dated 23.05.2013, had admitted their typographic error, showing willingness to pay differential duty. Further, vide another letter dated 24.05.2013, the importer had requested for First Check assessment. The proper officer i.e. assessing authority at this point of time was very much authorized to re-assess the impugned goods by classifying the same in the appropriate CTH and levying merit duty. I find that the seizure memo was issued by SIIB (Imports) only on 28.05.2013 and the goods examined 100% undertaken thereafter.
Further, I also find in the case of C. Natvarlal & Co. Vs. CC (Import) Mumbai, under appeal No.C/1029/12-MUM, order no. A/05/13/CST dated 20.12.2012 given by Honble CESTAT, Mumbai that the importer had imported goods described as Non-Sterile Surgical Linen Suture Reels (Barbour) and claimed the CTH 90189099 with the benefit of concessional rate of duty under Notification No. 21/2012-Cus dated 17.03.2012 however, department found the goods to be mis-declared and the same merit classification under CTH 53062010. The subject goods were adjudicated and confiscated and imposed redemption fine and penalty under Section 125 Section 112(a) & 114(A). The Honble CESTAT has uphold the classification under CTH 53062010 but set aside the confiscation, fine and penalty. The Judgment given on the basis of some references mentioned in para 5.9 said judgment which are reproduced as under:
The last issue for consideration is whether the goods are liable to confiscation and consequently liable to fine and penalty. In the case of Northern Plastic case cited supra, the Honble Supreme Court held that laying claim to some exemption, whether admissible or not, is a matter of belief of assessee does not amount to misdeclaration, and consequently confiscation under Section 111(m) of the Act is not warranted in such cases. The Honble Bombay High Court in the case of CC Vs. Gaurav Enterprises cited supra held that declaration with regard to untenable claim for exemption of duty, is not a mis-declaration. The same ratio was followed by this Tribunal in the case of Jay Kay Exports and Industries cited supra wherein it was held that if the appellants have claimed wrong classification according to appreciation on his part and consequently confiscation under Section 111 and imposition of penalty under Section 112 are not warranted. Following the ratio of these decisions, we hold that in the present case, confiscation under Section 125 ibid and imposition of penalty under Section 114A of the Customs Act are not warranted. Accordingly, we set aside confiscation, fine and penalty adjudged in the impugned order. However, we uphold the classification of the goods under Tariff Heading 53062010 and the confirmation of duty demand under the said classification alongwith interest thereon.
3. Being aggrieved, Revenue is in appeal on the ground that Commissioner (Appeals) have relied on the ruling in the case of C. Natvarlal & Co. the said ruling belonging to the period prior to self assessment scheme and accordingly supports the Order-in-Appeal and prays for setting aside the Order-in-Original. The further ground urged by Ld. AR is that CBEC Circular No.17/2011-Cus dated 8.4.2011 states, that the importer or exporter at the time of self-assessment will ensure that he declares the correct classification, applicable rate of duty, value, benefit of exemption notification claimed, if any, in respect of the imported/export goods while presenting Bill of Entry or shipping bill. Further ground is that the respondent-assessee have failed to take steps under new facility given by the Revenue like-
(i) Seek assistance from Help Desk located in each Customs Houses,
(ii) Refer to information on CBEC/ICEGATE web portal
(iii) Apply in writing to the Assistant/Deputy Commissioner in charge of Appraising Group to allow provisional assessment
(iv) An importer may seek Advance Ruling from the Authority on Advance Ruling, New Delhi if qualifying conditions are satisfied. The Ld. AR. further relying on the ruling of Apex Court in the case of HMT Ltd. Vs. Commissioner of C.Ex.& Cus. Aurangabad 2007 (214) E.L.T. 10 (S.C.) wherein para 14 of the judgment the Honble Apex Court have observed as under:
Even on a bare perusal of the Note No.2 to Chapter Heading 84.34 and HSN Explanatory Notes show that the view of the CESTAT is on terra firma. In Commissioner of Central Excise Vs. Carrier Aircraft (2006 (6) SCALE 564) it was held that the view of the Tribunal in classification matters unless patently wrong should not be interfered with. Above being the position, we find no merit in this appeal which is accordingly dismissed. There will be no order as to costs.
4. Ld. Counsel for the respondent-assessee argues that there is failure on the part of the Revenue authorities in exercise of the jurisdiction vested with them. The assessee had opted for First Check Assessment on 23.5.2013 & 24.5.2013, there was no requirement to resort to the process of seizing of the goods and adjudication. In view of the provisions of Section 17 of the Act which is reproduced below:
SECTION 17. Assessment of duty. (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self-assess the duty, if any, leviable on such goods.
(2) The proper officer may verify the self-assessment of such goods and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary.
(3) For verification of self-assessment under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, brokers note, insurance policy, catalogue or other document, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which is in his power to produce or furnish, and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.
(4) Where it is found on verification, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.
(5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment 25 done by the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification issued therefore under this Act and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re- assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be.
(6) Where re-assessment has not been done or a speaking order has not been passed on re- assessment, the proper officer may audit the assessment of duty of the imported goods or export goods at his office or at the premises of the importer or exporter, as may be expedient, in such manner as may be prescribed.
4.1. The Ld. Counsel further states that law provides for certain assessment in certain manner, it should have been in that manner and more so in facts of the present case, when all the facts etc. were available on record and the importer was co-operating with the Revenue by opting First Check basis. The assessment should have been completed under Section 17(4) or under Section 17(5). In this view of the matter passing of the Order-in-Original was incorrect exercise of power under the scheme of the Act. He further states that the order of the Commissioner (Appeals) does not require any interference. The Commissioner (Appeals) has rightly held that there is no mala fide claim made by the importer and accordingly was pleased to set aside the redemption fine and penalty. The respondent further relies on the ruling in the case of S.Rajiv & Co. Vs. Commissioner of Customs (CSI Airport), Mumbai 2014 (302) ELT 412 (Tri.-Mumbai) wherein ( I was also one of the Member), have held mere claim for exemption based on documents, cannot be said that appellant misdeclared the goods. In the said case, the Revenue have goods under importation only semi-processed diamonds falling under category of rough diamonds and not polished diamonds and accordingly the confiscation as well as redemption fine and penalties were set aside. The respondent also relied on another ruling of this Tribunal in the case of Komal Trading Company Vs. Commissioner of Customs, (Import) Mumbai 2014 (301) E.L.T. 506 (Tri.-Mumbai) wherein it was held that importer may claim a wrong classification based on his understanding of Tariff That per se would not amount to misdeclaration or suppression because the respondents have claimed a wrong classification that does not mean that Department need not ascertain /verify the claim of respondent and can issue demand notices for short-levy alleging suppression especially in view of C.B.E.C. Circular No. 32/2002-Cus. dt. 10.6.2002. He further observe that nothing prevented the Revenue for calling for detailed specifications of the product, drawing of samples and getting them tested, to ascertain whether the product imported is eligible or not, for failure and lapses on part of assessing officers, extended period of time is not invocable and the demand for extended period was set aside further we find no fine and penalty is imposable.
5. Having considered the rival contentions and after going through the records, I find that under the facts and circumstances no case of misdeclaration or contumacious conduct on the part of the importer is made out. I further agree with the findings of the Commissioner (Appeals) setting aside redemption fine and penalty. Thus the appeal of the Revenue is dismissed. The respondent-assessee will be entitled to consequential relief, if any, in accordance with law. I further, direct the concerned authority to refund the fine and penalty deposited, within a period six weeks from the date of receipt of copy of this order.
(Pronounced & Dictated in court) (Anil Choudhary) Member (Judicial) Sm ??
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