2016 (7) TMI 1382 - HC - Central Excise

Classification of export goods - residue left from the extraction of soyabean oil which is covered under Chapter Heading 2304 of CETA - Held that - in the present case an intelligence was collected by the officers of headquarters preventive branch of their Commissionerate that the plant of the petitioner is based on solvent extraction technology and they are exporting residue left from the extraction of soyabean which is covered under Chapter Heading No. 2304 and not under Chapter Heading No. 1208 of CETA 1985 and the petitioner has taken inadmissible incentive from the office of Joint Director General of Foreign Trade under VKGUY scheme of Chapter 3 - the matter is sub-judice before the respondent No. 1-Joint Director General of Foreign Trade Indore without expressing any opinion on merits of the case - petition disposed off.

Summary

Issues:
Petitioner seeks quashment of show cause notice and subsequent reminders regarding misclassification of export product for obtaining incentives.

Analysis:
The petitioner, a company exporting residue from soyabean oil extraction for cattle feed, received a show cause notice on 4-4-2016 for misclassification of the export product under Chapter Heading 1208 instead of 2304, resulting in an inadmissible incentive of Rs. 4.26 crores under the VKGUY scheme. Subsequent reminders were issued when no reply was filed, threatening cancellation of authorizations and recovery of the amount with interest. The petitioner contended that customs officers had not disputed the classification of goods declared in export documents and argued the show cause notice lacked specificity and proper jurisdiction.

The petitioner relied on legal precedents to argue that the show cause notice was invalid without a change in classification by customs authorities. However, the court found the notice valid as intelligence indicated misclassification under Chapter Heading 1208 instead of 2304. The court emphasized that the petitioner must respond to the notice and challenge any adverse order through the appellate process. Declining to intervene while the matter was pending before the Joint Director General of Foreign Trade, the court dismissed the writ petition without expressing any opinion on the case's merits.