Custom, Excise & Service Tax Tribunal
M/S. Shree Pharma vs Commissioner Of Customs, Chennai Ii on 30 October, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/41616/2015
(Arising out of Order-in-Appeal C. Cus. II No. 585/2015 dated 30.6.2015 passed by the Commissioner of Customs (Appeals), Chennai)
M/s. Shree Pharma Appellant
Vs.
Commissioner of Customs, Chennai II Respondent
Appearance Shri B. Satish Sundar, Advocate for the Appellant Shri Kailash Chandra Jena, ADC (AR) for the Respondent CORAM Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member Date of Hearing / Decision: 30.10.2015 Final Order No. 41509 / 2015 Per R. Periasami This appeal is filed against the order dated 30.6.2015 passed by the Commissioner (Appeals).
2. The brief facts of the case are that the appellants filed Bill of Entry 8852905 dated 8.4.2015 for clearance of bronopol imported from China. The Deputy Commissioner of Customs vide letter dated 20.5.2015 raised a query as the item sought to be imported is an biocide figuring in Schedule to Insecticide Act, 1968 and as per DGFT Notification No. 106/2013/2009-2014 dated 1.1.2015, it is mandatory that even for non-insecticidal purpose permission is necessary from the Registration Committee under the Department of Agriculture and Co-operation. The Deputy Commissioner in the letter has informed the appellant to produce necessary permission. Against that letter, the appellants preferred appeal before Commissioner (Appeals). The Commissioner (Appeals) in his order, after following the principles of natural justice, upheld the Deputy Commissioners Communication dated 20.5.2015 and rejected their appeal and held that consequent upon issue of DGFT Notification dated 1.1.2015, necessary permission is required from the Registration Committee even if they imported goods for non-insecticidal purpose. Hence the present appeal.
3. The learned counsel drew our attention to purchase order that is sales confirmation annexed at page 45 for supply of bronopol 99% purity and he drew attention to advance payment remittance at page 46 and certificate of analysis issued by the supplying country at page 47 and the Bill of Entry Invoice at page 50. He submits that they have filed Bill of Entry for import of bronopol classifiable under 29309099 which is freely importable. He drew attention to EDI Bill of Entry at page 52 where the assessing officer has raised a query that is please put up CIB registration certificate. Against this query they have replied to the Assistant Commissioner of Customs vide their letter dated 9.5.2015 annexed at page 53 and explained that they have replied that the items imported has for non-insecticidal purpose. He further submits that as per section 38(1)(b) of Insecticide Act, the item imported for non-insecticidal purpose were exempt from provisions of Insecticides Act and therefore they are not required to obtain any licence from Registration Committee under the Insecticides Act. He further drew our attention to the copy of Minutes of 313th Meeting of Registration Committee. He drew attention to para 6 annexed at page 66 and submits that the insecticides having dual / multiple uses either should be removed from the insecticide Schedule or if they are added in miniscule quantity in pesticide formulations, for the purpose other than insecticide, should not be considered as 2nd or 3rd active ingredient. He submits that they are freely importable goods which are rightly classifiable under Chapter 29. He further submits that the DGFT Notification annexed at page 95 is not applicable in their case as the goods are classifiable under Chapter 29. He also submits that they have applied to the Registration Certificate of Department of Agriculture and Co-operation. He relied on the following case laws:-
(a) DPB Antibiotics Vs. Commissioner of Customs, Chennai 2009 (247) ELT 324
(b) Synergies Castings Ltd. Vs. Commissioner of Customs, Chennai 2009 (240) ELT 638
(c) Maliakkal Industrial Enterprises Vs. Union of India 2013 (290) ELT 330 (Ker.)
(d) Commissioner of Customs, Chennai Vs. Synergies Castings Ltd. 2014 (313) ELT 50 (Mad.)
4. On the other hand learned AR for Revenue reiterated the findings and the communication dated 20.5.2015. He submits that the item imported bronopol is an insecticide specifically covered under Schedule 2 of the Insecticides Act. He further submits that the appellant is not the actual user but a trader and no evidence/proof submitted that the imported goods which is an insecticide is used for non-insecticide purpose. Further, he submits that the present import is made after issue of DGFT Notification dated 1.1.2015 which is binding on the customs as well as on the importer. As per DGFT Notification when insecticides are imported for non-insecticidal purpose permission is necessary from the registration committee. He further submits that all the case laws relied on by the appellants are pertaining to the period prior to issue of DGFT notification dated 1.1.2015, therefore, the same are not relevant. Once the DGFT notification stipulates condition of permit for committee, the appellants should have obtained necessary permission from the committee even if it is for non-insecticidal purpose. Further, he submits that DGFT has the power to issue notification insofar as import and export of any goods is concerned which is binding on the customs and the appellant. Further, he submits that in this case the appellant has filed an appeal against the letter issued by Deputy Commissioner of the assessing group. Neither any assessment of the Bill of Entry completed nor any order was passed by customs invoking any contraventions of Customs Act, nor the goods were confiscated, the adjudicating authority in his letter finding production of necessary documents allowed for bonding of goods.
5. After hearing both sides and on perusal of the records, we find that the short issue involved in this case is whether the item bronopol imported by the appellant requires permission as per DGFT notification dated 1.1.2015. We find that in this case the appellant filed Bill of Entry on 8.4.2015 and claimed classification of goods under Chapter 29 and when the initial query was raised in EDI, after reply to the query, the Deputy Commissioner replied that the importers require permission as per DGFT Notification dated 1.1.2015. Against the communication, the appellants preferred appeal before Commissioner (Appeals). We find that the Commissioner (Appeals) in his order has clearly brought out that the item imported bronopol is covered under Schedule to the Insecticide Act as an insecticide. There is no dispute on the fact that the item is insecticide. The appellants contention before Commissioner (Appeals) was that they have imported the goods for non-insecticidal purpose and claimed exemption under section 38(b) of Insecticide Act. In this regard, it is relevant to see that the goods were imported on 8.4.2015. Any import or export is covered by Foreign Trade Policy and any notification issued by DGFT. In this regard DGFT Notification dated 1.1.2015 is reproduced as under:-
3. Under Section [9] of the Insecticides Act, 1968 all chemicals intended to be used as insecticides, rodenticides, fungicides, herbicides etc. [referred to as insecticides under the Act] require mandatory registration for import. In cases, where the insecticide is imported for non-insecticidal purpose, an import permit is necessary from the Registration Committee under the Department of Agriculture and Cooperation. The Registration Committee while granting registration or a permit for import of an insecticide spells out the conditions for import which inter alia, may include reference to the source of import. No insecticide can be imported from a source other than that specified on the certificate of registration or the permit, as the case may be. In addition, the Registration Committee may issue regulatory guidelines from time to time with respect to safety, efficacy, quality etc. which warrant full compliance from importers. (Emphasis supplied).
6. The appellant contends that bronopol is imported for non-insecticidal purpose. However, we find that the appellant is not manufacturer or actual user or industry but only a merchant trader and there is no evidence to show that said Bronopol insecticide is used for non-insecticidal purpose. Further, we find as per the above DGFT Notification, if any insecticide is imported even for non-insecticides purpose, the permission is necessary from the Registration Committee under Department of Agriculture and Co-operation. The notification is issued under section 3 of Foreign Trade (Development & Regulation) Act, 1992 read with Foreign Trade Policy 2009 2014 which is come into effect from 1.1.2015. Therefore, the customs and the importer is bound by this notification issued by DGFT.
7. In the case of DPB Antibiotics Vs. Commissioner of Customs, Chennai (supra), as relied on by the learned counsel, the adjudicating authority adjudicated the case and absolutely confiscated the goods whereas the Tribunal has allowed for clearance on payment of redemption fine and the same is not applicable to the facts of the present case. In the present case, neither Bill of Entry is assessed nor any confiscation is made under Customs Act nor any find and penalty imposed. Further, the case laws relied on by the learned counsel is not applicable as these citations pertain to the period prior to issue of DGFT notification dated 1.1.2015.
8. Accordingly, we hold that the appellants are required to comply with the DGFT notification dated 1.1.2015. Therefore, we do not find any infirmity in the order passed by Commissioner (Appeals). Accordingly, the impugned order is upheld and the appeal filed by the appellant is dismissed.
(Dictated and pronounced in open court)
(P.K. CHOUDHARY) (R. PERIASAMI)
Judicial Member Tehnical Member
Rex
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