Home Case Index All Cases Customs Customs + AT Customs - 2020 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 289 - AT - CustomsClassification of imported goods - Sucrose (pharmaceutical grade) - classified under CTH 17029090 of Customs Tariff Act, 1975 or under CTH 17019990? - contention of the Revenue is that the imported sugar spheres or Non-pareil seeds 40-60 Mesh Sugar sphere (pharmaceutical grade) are classifiable under CTH 17019990 whereas the appellant while filing the Bill of Entry declared classification under CTH 17029090, but later during the appellate/adjudication proceedings claimed its classification alternatively under 17049090 of Customs Tariff Act, 1975. HELD THAT:- In confirming the classification under Chapter heading 1701, the learned Commissioner (Appeals) in the impugned order held that chemically pure sucrose as mentioned under the Tariff Heading cannot be construed that it should consist of chemically pure sucrose only; but the chemically pure sucrose could also be in mixture with other materials like starch and water as in the present case. It is his reasoning that what is to be seen in classifying the mixture is the essential character of the product i.e. among all the elements the one that provides the essential character to the said product. He has observed that in the present case, it is sucrose, which is present in the range of 80 to 90% provides the essential character to the imported product Non-pareil seeds 40-60 Mesh Sugar sphere (pharmaceutical grade). In arriving at the said conclusion the Ld. Commissioner (Appeals) referred to rule 3(b) of General Rules of Interpretation, applicable to classification of products in mixture. There are merit in the observation of the learned Commissioner (Appeals). The argument of the appellant that the product chemically pure sucrose specified under chapter heading 1701 if mixed with any other ingredients except with flavouring or colouring agent, it would fall outside the scope of the said heading - The contention of the appellant that chemically pure sucrose mixed with other items would fall outside the scope of the said heading as it is not designed to bring within its scope other than pure sugar except when added with colouring or flavouring agent therefore devoid of merit. The Ld. Commissioner (Appeals) in determining the classification of the chemically pure sucrose mixed with starch and water, correctly applied Rule 3(b) of General Rules of Interpretation. He has observed that the classification of principal constituent in the mixture which provides essential character to the product be adopted for the mixture - In the present case chemically pure sucrose is the main constituent and provides the essential character to the mixture as neither the starch which acts as binder nor water which is used in the process can be called as the essential item to be used in the pharmaceutical industry, the purpose for which the mixture is manufactured. The products enumerated in the said Explanatory Notes clearly indicates that confectionary are mostly for immediate consumption and sometimes added with therapeutic value classified under Chapter 30 as pharmaceutical products. Also, applying the common parlance test, it cannot be claimed that the imported sugar spheres/neutral pellets are used by a common man like the use of a confectionary even if the same manufacturer manufactures both these items. The use of the imported pellets is in pharmaceutical industry not as confectionary by the common man - it can safely be concluded applying the aforesaid tests that the imported product in question common in both the Appeals fall under CTH 17019990 - the demand of duty and interest confirmed for the normal period is upheld. Penalty - HELD THAT:- Since the issue relates to classification of goods between two competing Headings being a question of interpretation of law, hence, imposition of penalty is uncalled for and unwarranted, accordingly set aside. Time Limitation - HELD THAT:- On a change of view by the department, allegation of mis-declaration or suppression of facts in classifying the product at the times of its import under CTH 17029090 is incorrect and cannot be sustained. The Revenue, on the other hand, argued that in the era of self-assessment, it is burden of the assessee to classify and discharge duty properly, hence, failure of classifying the product under correct sub-heading amounts to mis-declaration. Hence, invoking the extended period of limitation is justified. The appellant have been continuously declaring classification of the product under Heading 1702 after providing full and description of the goods in their Bills of Entry; duly filed all literatures on process of manufacture, its usage etc. as and when called for by the department during assessment proceedings. In such circumstance, allegation of suppression of facts or mis-declaration solely on the basis that the correct classification which according to the Department would fall under different Tariff Heading i.e. 1701 attracting higher rate of duty during the period under dispute cannot be sustained - the demand confirmed in the impugned Order invoking extended period is set aside on the ground of limitation. Appeal disposed off.
|