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2020 (6) TMI 94 - AT - CustomsClassification of imported goods - Squalene - whether classified under CTSH 15042090 or CTSH 29012990? - penalty - HELD THAT:- The chemical reports issued by CIFT and Customs Laboratory indicated the impugned product to be of marine origin. It is also confirmed by CIFT that the sample analysis was done using Perkin Elmer Gas Chromatograph FID equipped with a column specific for the analysis of fatty acids and hydrocarbons in oils. Therefore, it was confirmed that the sample was of marine origin and rich in Squalene. We find that whereas heading 1504 covers fats and oils of fish or marine mammals 2901 covers acyclic hydrocarbons - Heading 2901 refers to saturated and unsaturated acyclic hydrocarbons like ethylene, propene, butene, acetylene, heptane etc. which are organic compounds. Going by the literature available and the chemical reports, the impugned products is of marine origin and therefore can appropriately be classified under 1504 rather than 2901. The appellants have taken a plea that their product contains unsaponifiable matter in the range of 85% and therefore, it cannot be classified under 1504 as oil - We find that there is no reference to the percentage of unsaponifiable matter with respect to the classification under heading 1504. Even going by the principles of “ejusdem generis‟ or “Noscitur a sociis‟, the impugned goods being of animal origin are rightly classifiable under Chapter 1504. The test reports give a fair idea of the nature and characteristics of the product. In the instant case, CIFT and Customs Laboratories have reported that the impugned product is fish oil. Therefore, we find that it cannot be classified under Chapter 2901 as saturated or unsaturated acyclic hydrocarbons along with ethylene, propene, butene, acetylene, heptene etc. It is of a great common sense that any organic matter would contain hydrocarbons and for that very reason, it cannot be classified under the heading applicable to hydrocarbons. If such an approach is taken entire Customs Tariff as far as it deals with living beings, goods or plant or animal origin would become redundant. Moreover, there is no reason as to why a report given by a professional institute such as CIFT and accredited laboratory such as Customs Laboratory - the report given by CIFT and Customs Laboratory cannot be ignored. The importers, on the other hand, did not produce any test report in their favour. The appellants have taken the plea that they have been importing the impugned products over the years and the classification of the same was being accepted by the Customs authorities. There is no estoppel in revenue matters and Customs are not bound by any contradiction taken in the past owing to different set of circumstances and facts of the case. Based on the submissions of established practice penalty cannot be imposed just because Customs authorities have taken steps to correct the classification. During the course of arguments, learned counsel for the appellants, have requested that in case it is held that the goods are not permissible to be imported, the same may be allowed to be re-exported - such a request needs to be made before the proper authority who will take a decision in accordance with law and facts of the case. The appeal is allowed to the extent of setting aside the penalty - other pats upheld.
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