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2023 (12) TMI 1080 - CESTAT NEW DELHIClassification of goods - Bulk Reishi Gano Powder 100% Ganoderma - Bulk Ganocelium Powder 100% Gano Mycelium - whether the products are classifiable as Ayurvedic medicaments under chapter 3003.9011 of the First Schedule to the Central Excise Tariff Act, 1985 (CETA) as contended by the appellant or as food supplements under CTH 2106999 of CETA? - Invocation of the extended period of limitation under section 28(4) of the Act - Confiscation of goods under section 111 (m) and (o). Classification - HELD THAT:- The said issue is no longer rest-integra and has been decided by the Chennai Bench in DXN Manufacturing India Private Ltd. vs. Commissioner of Central Excise and Service Tax, Pondicherry [2017 (11) TMI 608 - CESTAT CHENNAI], where the Tribunal reconsidered the matter at length on being remanded by the Supreme Court [2015 (8) TMI 1418 - SUPREME COURT] and concluded that both the impugned goods fail both the twin test for being considered as Ayurvedic medicament and therefore the products in question are nothing but food supplements promoted mainly for general health or well-being and therefore merit classification under 2108 of the CETA and more specifically under 2108.99, as it stood at the relevant time and assessed accordingly under section 4A of the Act for discharge of duty liability. The issue of classification was thus decided in favour of the revenue and against the assessee. There are thus no hesitation in concluding the issue of classification of the products in question under CTH 21069099 as food preparation - the issue of classification on merits stands affirmed in favour of the revenue and against the appellant. Invocation of the extended period of limitation under section 28(4) of the Act - HELD THAT:- In view of the proceedings which was pending since 2012 and the department itself had preferred an appeal, it cannot be said that the department was not aware of the classification of the products as declared in the instant bills of entry by the appellant and therefore no fault can be found on the part of the appellant as 9 out of the 10 bills of entries were filed before the final order was passed by the Tribunal on 10.01.2018 and the Order-in-Appeal by the Commissioner (Appeals) was holding the field. The law on invocation of extended period of limitation is well settled. Mere omission or merely classifying the goods/services under incorrect head does not amount to fraud or collusion or wilful statement or suppression of facts and therefore the extended period of limitation is not invocable. The Supreme Court in PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT] has categorically laid down that where facts are known to both the parties, the omission by one to do what he might have done, and not that he must have done, does not render it suppression. Thus when all the facts are before the department as in the present case then there would be no wilful mis-declaration or wilful suppression of facts with a view to evade payment of duty - the revenue cannot invoke the extended period of limitation under section 28(4) of the Act, hence the show cause notice dated 2.07.2018 is barred by limitation for the period beyond the normal period. Imposing penalty under section 114A of the Customs Act - HELD THAT:- As it is held that it is not a case of willful suppression, mis-statement or misdeclaration by the appellant, the ingredients required for invoking the penalty being the same, the penal action under the provisions of section 114A as imposed by the impugned order is not justifiable and is hereby set aside - the appellant cannot be held liable for penalty under section 114 AA of the Customs Act and the reasoning given by the Principal Commissioner that at the time of presenting the bill of entry, the importer made and subscribed to false declaration against the contents of bills of entry, in contravention to section 46(4) of the Act is unsustainable Confiscation of goods under section 111 (m) and (o) - HELD THAT:- The findings in the impugned order that section 111(m) can be invoked for misdeclaration of any material particular, in respect of the goods and not necessarily only the value of the goods stands quashed and the issue stands decided in favour of the appellant that there cannot be any confiscation of goods under section 111(m) in the case of wrong classification - it is a simple case of mis-classification/incorrect classification and not mis-declaration of goods on the part of the appellant, the logical inference would be that the appellant has not wrongly claimed the exemption benefit and therefore there can be no confiscation under Section 111(o) of the Act. The appeal is remanded to the Adjudicating Authority for the limited purpose of computing the differential duty to be demanded in respect of normal period only - the appeal is partly allowed by way of remand.
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