TMI Blog2012 (9) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were not physically available for confiscation - no redemption fine was liable to be imposed under Section 125 of the Act in lieu of confiscation of the goods - C/419-420/2003-Mum, C/1191/2006-Mum and C/1049/2007-Mum - A/184-187/2011-WZB/C-I(CSTB) - Dated:- 9-6-2011 - S/Shri P.G. Chacko, Sahab Singh, JJ. REPRESENTED BY : S/Shri J.C. Patel and Rajeev Ravi, Advocates, for the Appellant. Shri S.S. Katiyar, DR, for the Respondent. [Order per : P.G. Chacko, Member (J)] M/s. Ganesh International (appellant in appeal No. C/419/2003) filed 11 Bills of Entry during the period from July to December 2002 for clearance of consignments of Long Pepper imported by them. They described the goods as Pippali and classified the same under SH 1211.90 in the Bills of Entry. Their declarations were accepted by the assessing authority and the goods allowed to be cleared on payment of duties of Customs as applicable to SH 1211.90. 2. M/s. Gautam Overseas (appellant in appeal No. C/420/2003) also imported 3 consignments of identical goods described as Pippali and classified under SH 1211.90 in the relevant Bills of Entry filed during September-October 2002. These goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Company, the Joint Commissioner of Customs confirmed total demand of duty of Rs. 7,27,384/- against them in respect of 2 Bills of Entry under Section 28(2) of the Customs Act, held the goods liable for confiscation under Section 111(d) and (m) of the Act and imposed a penalty of Rs. 7,27,384/- on the party under Section 112(a) of the Act. As the goods were not physically available for confiscation, the adjudicating authority refrained from imposing redemption fine. This part of the Joint Commissioner s order was reviewed by the Commissioner and, accordingly, an appeal was preferred to the Commissioner (Appeals). The Commissioner (Appeals) accepted the revenue s view by holding that redemption fine was imposable even if the goods were not available. The appellate authority remanded the matter to the lower authority for determining the quantum of fine. This remand order of the Commissioner (Appeals) is under challenge in Appeal No. C/1049/2007. 7. The Joint Commissioner s order against M/s. Radha V. Company was taken by them in appeal to the Commissioner (Appeals) but the latter only reduced the penalty to Rs. 2 lakhs while upholding the demand of duty against the appellant. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 129D for revision of assessment. 9.2 Both sides have also cited decisions in support of their respective arguments. Decisions cited by the learned counsel : (1) Commissioner of Cus., Mangalore v. Jindal Vijaya Nagar Steel Ltd., 2007 (207) E.L.T. 47 (Kar.) (2) Commr. of Cus. (Imports) Mumbai v. Hindustan Gas Industries Ltd., 2006 (202) E.L.T. 693 (Tri.-Mumbai) (3) Madhus Garage Equipments v. Commissioner of Cus. (Appeals), Bangalore - 2006 (198) E.L.T. 388 (Tri.-Bang.) (4) Commissioner of C.Ex., Aurangabad v. Videocon Appliances - 2009 (235) E.L.T. 513 (Tri.-Mumbai) (5) Mac Megha Agro Equipments (P) Ltd. v. Commr of Cus., Cochin - 2006 (199) E.L.T. 260 (Tri.-Bang.) (6) STI India Ltd. v. Commissioner of C. Ex., Indore - 2008 (222) E.L.T. 112 (Tri.-Del.) (7) Collector of Central Excise, Baroda v. Cotspun Limited - 1999 (113) E.L.T. 353 (S.C.) (8) Madurai Power Corpn. (P) Ltd. v. Deputy Commr. of C.Ex., Madurai-I - 2008 (229) E.L.T. 521 (Mad.) The learned Counsel has also pointed out a difference between Section 28 of the Customs Act and Section 11A of the Central Excise Act. An amount of duty of excise short-levied or non-levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty under Section 17 of the Customs Act and cleared on payment of such duty under Section 47 of the Act. The show-cause notice subsequently issued by the department under Section 28(1) of the Act proposed to revise classification of the goods and to collect from the appellants the differential amount of duty based on SH 0904.11 of the CTA Schedule. According to the appellants, any revision of classification of the goods could have been made only by recourse to the procedure laid down under Section 129D of the Act and not under Section 28 of the Act. According to the respondent, any amount of duty short-levied or short-paid, for whatever reason, could be determined and demanded under Section 28 of the Act. This legal issue is covered by some of the decisions cited by the learned Advocate and the learned SDR. The earliest judgment referred to by both sides is that of the Hon ble Supreme Court in the case of Jain Shudh Vanaspati Ltd.(supra). The learned counsel has argued that the relevant ruling of the Apex Court in the said case is applicable only in cases involving fraud on the Revenue. On the other hand, the learned SDR has argued that the ruling is applicable to other cases also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be issued only subsequent to the clearance under Section 47 of the concerned goods. Further, Section 28 provides time limits for the issuance of the show cause notice thereunder commencing from the relevant date ; relevant date is defined by sub-section (3) of Section 28 for the purpose of Section 28 to be the date on which the order for clearance of the goods has been made in a case where duty has not been levied; which is to say that the date upon which the permissible period begins to run is the date of the order under Section 47. The High Court was, therefore, in error in coming to the conclusion that no show cause notice under Section 28 could have been issued until and unless the order under Section 47 had been first revised under Section 130. The ruling which emerges from the above judgment of the Apex Court is that, even subsequent to clearance of goods under Section 47 of the Customs Act, a show-cause notice could be issued under Section 28(1) within the prescribed period of time reckoned from the relevant date for the purpose of recovery of customs duty not-levied, short-levied, not-paid, short-paid etc . 9.5 In the case of Venus Enterprises (supra), the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when the goods were already cleared, no demand notice can be issued under Section 28(1) of the Act as unworkable and redundant, inasmuch as the jurisdiction of the authorities to issue notice under Section 28 of the Act with respect to the duty, which has been short-levied, would arise only in the case where the goods were already cleared. In view of the clear finding with regard to the misdeclaration and suppression of value, which led to the undervaluation and proposed short-levy of duty, we do not see any lack of jurisdiction on the part of the adjudicating authority to issue notice under Section 28(1) of the Act . We are told that the SLP filed against the above decision of the High Court was dismissed by the Apex Court [Venus Enterprises v. Commissioner - 2007 (209) E.L.T. A61 (S.C.)] . 9.6 We further note that the ratio of the Apex Court s decision in Jain Shudh Vanaspati case (supra), as contained in para 5 of its judgment, was applied by the court later in a Central Excise case (Re-Rolling Mills case) after observing that Section 11A of the Central Excise Act was pari materia with Section 28 of the Customs Act. The Hon ble Supreme Court thus held against the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t jurisdiction. Madurai Power Corporation was engaged in the generation of electricity, for which Low-Sulphur Heavy Stock (LSHS) was used as primary fuel. The corporation procured LSHS at a concessional rate of duty under Notification No. 3/2000-C.E. For this purpose, they used a certificate issued by the competent authority, which permitted them to procure LSHS without payment of duty from various installations of Indian Oil Corporation Ltd. The question arose as to whether the benefit of Notification No. 3/2000-C.E. could be denied to the corporation and whether duty on LSHS could be demanded under Section 11A of the Central Excise without cancellation of the said certificate by the procedure laid down under Section 35E of the Act. It was this question which was answered in the negative by the Hon ble High Court. We note that the Hon ble High Court s decision was rendered without noticing the Hon ble Supreme Court s judgment in Re-Rolling Mills case (supra) wherein the Apex Court passed the following order : The learned Counsel for the parties do not dispute that this appeal is covered by the decision of this Court in Union of India Ors. v. Jain Shudh Vanaspati Ltd. Anr. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 0904.20 - Fruits of the genus Capsicum or of the genus Pimenta , dried or crushed or ground The learned counsel for the appellants submitted that, as plants and parts of plants (including fruits) of a kind used primarily in pharmacy, fresh or dried, were correctly classifiable under Heading 12.11, the dried unripe fruit of the plant Long Pepper was classifiable under SH 1211.90 only inasmuch as fruit of Long Pepper was predominantly used as medicine in Ayurveda, Siddha and Unani systems. In this connection, the learned counsel referred to the following literature : (1) INDIAN MATERIA MEDICA by Dr. K.M. Nadkarni : It contains Therapeutic Notes on action and uses of parts of piper longum in Ayurveda, Siddha and Unani systems. The parts used are stated to be immature berries (i.e., dried unripe fruits or fruiting spikes) dried in the sun, and stems (roots). The book states inter alia thus :- Both, fruit and root are much prescribed in palsy, gout, rheumatism, lumbago, etc. Fruit is given to women after parturition to check haemorrhage and to ward off fever. As vermifuge it is one of the best remedies for colic in children. Fruit is used t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Chapter 9 by virtue of Note 2 of Chapter 9, which reads This chapter does not cover Cubeb pepper (Piper Cubeba) or other products of Heading 12.11 . It was therefore contended that the subject goods could not be classified under Chapter 9 of the Tariff Schedule. The learned counsel also referred to Explanatory Notes under HSN Heading 12.11. He particularly referred to the illustrative list of products included in Heading 12.11 of HSN. The list included Long Pepper (Piper Longum). The learned counsel referred to ITC (HS) Classification 2002-07, whereunder Pippali was shown in the list of crude drugs required for the manufacture of Ayurvedic, Unani or any other system of medicine . He also claimed support from Examination Order dated 2-7-2002 obtained by the Customs authorities from the Assistant Drugs Controller, wherein the subject goods was held to be a crude drug. The learned counsel for the appellants also relied on certificates obtained from manufacturers of Ayurvedic medicines, to whom the appellants had sold the imported goods. He also relied on a letter dated 23-4-2003 of the Ministry of Health and Family Welfare, which stated that Pippali was used in the prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. 10.2 The learned SDR submitted, at the outset, that, in a case of one of the appellants (namely, Ganesh International) for a period after 1-3-2003, the same commodity was classified by this Tribunal under Heading 09.04 and that the party did not challenge the decision. The learned SDR extensively referred to Ganesh International v. Commissioner of Customs, Nagpur - 2004 (169) E.L.T. 284 (Tri.-Mumbai), wherein it was found that Long Pepper was generally used as a condiment and was specifically mentioned under Heading 09.04 and it was held that Chapter Note 2 could not be read to mean that the Chapter (Chapter 9) excluded even those products which were specifically mentioned under Heading 09.04. The learned SDR, submitted that, if it was held that Long Pepper on account of its pharmaceutical use stood excluded from Chapter 9 by virtue of Chapter Note 2, its classification under the 8 digit entry (0904 11 10) in the Tariff Schedule w.e.f. 1-3-2003 would become redundant. He argued that Chapter Note 2 could not be so construed as to render the 8 digit classification of Long Pepper under SH 0904 11 10 redundant. According to the learned SDR, if Long Pepper is classifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than green, frozen 0904 11 90 --- Others Different species of Pepper under the genus Piper remain classified as above with Piper Longum (Long Pepper) falling under SH 0904 11 10. Apparently Long Pepper, neither crushed nor ground is classified under SH 0904 11 10 in the 8 digit scheme of classification from 1-3-2003. Obviously, pre-1-3-2003, Pepper, neither crushed nor ground (SH 0904 11) in the erstwhile 6 digit scheme of classification included Long Pepper and all other species of pepper of the genus Piper . The only difference which we have found in relation to classification of Pepper under Heading 09.04 of the erstwhile 6 digit scheme and heading 0904 of the present 8 digit scheme is that the former is broadly genus-based whereas the latter is finely species-based. It goes without saying that all species of Pepper, such as Long Pepper, Light Black Pepper, Black Pepper, Green Pepper etc., which are seen sub-classified under the entry 0904 11 (Pepper, neither crushed nor ground) in the 8 digit scheme of classification belong to the genus piper described as pepper, neither crushed nor ground and classified under the entry 0904.11 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, crushed or powdered . Part of a plant, of a kind used primarily in pharmacy, may or may not be crushed or powdered/ground, for its classification under Heading 12.11, whereas fruit of Long Pepper shall neither be crushed nor be ground, to be classified under SH 0904.11. If the latter is crushed or ground, it would fall under another sub-heading viz. SH 0904.12. Therefore, by all means, fruit of Long Pepper , neither crushed nor ground, was specifically covered under SH 0904.11 during the period of dispute. Secondly, the scope of the expression other products of Heading 12.11 needs to be examined with reference to the relevant HSN Notes to Heading 12.11. There is a long list of products under these HSN Notes which say that all the listed products are included in Heading 12.11. One of the items figuring in this list of products in alphabetical order is : Long pepper (Piper longum) : (roots and underground stems). Conspicuously, only roots and underground stems of Long Pepper are seen included in the above item. Fruit (berry) of Long Pepper stands excluded from the above item, which would go to show that fruit of Long Pepper is a product excluded from Heading 12.11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein is perforce applicable to the instant case. That the fruit of Long Pepper is not a product classifiable under Heading 12.11 of the Tariff Schedule and that it is generally used as a condiment classifiable under Heading 09.04 of the said Schedule are clear findings of this Tribunal in the said case of Ganesh International and the same, having been accepted by the party, are binding on them. In this context, one decision cited by the SDR is relevant and the same is CCE, Bangalore v. Bal Pharma Ltd. [2010-TIOL-74-SC-CX = 2010 (259) E.L.T. 10 (S.C.)]. In that case, the Hon ble Supreme Court refused to entertain the department s appeal against the Tribunal s order on a valuation issue, after noting that the department had not challenged an earlier decision of the Tribunal on the same issue (in another assessee s case), which was followed by the Tribunal in the case of Bal Pharma Ltd. In the instant case of Ganesh International, the Revenue can legitimately claim support from the view taken by the Apex Court and argue that Ganesh International is bound by 2004 (169) E.L.T. 284 on the classification issue. 10.8 As it cannot be said that, in the shift from 6 digit scheme to 8 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and the same were made under protest . In this connection, it has also been claimed that the proprietor was forced to make involuntary statements under Section 108 of the Customs Act to the effect that Pippali was classifiable under Chapter 9 and not under Chapter 12. 11.3 The learned counsel for the appellant submitted that, as classification of goods was a function of the department, the appellant could not be alleged to have misclassified the goods imported by them. In any case, according to the counsel, nothing was suppressed by the appellant with intent to evade payment of duty. The goods was described and classified in the Bills of Entry on the basis of bona fide belief that it was a crude drug as certified by the Assistant Drugs Controller in the case of Ganesh International. Therefore, he argued that the extended period of limitation was not applicable to the case. 11.4 The learned SDR reiterated the relevant findings of the original authority and the appellate authority. He pointed out that the appellant chose to describe the goods are Pippali in Sanskrit, instead of Long Pepper in English with a view to classifying the item under SH 1211.90 and clearing it on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry No. 296422 dated 23-9-2002. In respect of the goods covered by Bill of Entry No. 313143 dated 26-11-2002, the appellant paid the entire amount of differential duty of Rs. 3,71,079/- on 12-12-2002, but no protest letter was submitted in respect of this payment. We also find that no protest was recorded on any of the challans covering the above payments of duty. Though protest letters were filed in respect of the payments of instalments of differential duty on the goods covered by Bills of Entry No. 296422 dated 23-9-2002, none of these letters stated the reason for the protest . The proprietor did not state any reason for protest in his statement dated 11-12-2002 either. In the circumstances, we are constrained to hold that the protest of the appellant is of no consequence insofar as the invocation of extended period of limitation is concerned. 11.6 Nevertheless, the fact remains that the appellant s plea of limitation against the demand of differential duty on the goods covered by the 2 Bills of Entry was not considered by the lower appellate authority. The learned Commissioner ought to have examined on merits the contention of the party that they did not misdeclare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Commissioner s relevant finding reads thus : In the instant case, the importers declared the description of the goods as Pippali in Sanskrit and in the normal course of trade the subject goods are referred as Long Pepper and not as Pippali . On this basis, he has held that the appellants resorted to misdeclaration of the goods thereby rendering the goods liable to confiscation under Section 111(m) and rendering themselves liable for penalty under Section 112 of the Customs Act. 13.2 It appears from the records that Shri Gopal B. Ahuja, partner of Ganesh International and authorized signatory of Gautam Overseas, had stated under Section 108 of the Customs Act that in Sanskrit, Long Pepper is called Pippali . The show-cause notice itself acknowledged this fact by noting that Pippali is a synonym for Long Pepper in Sanskrit language . In reply to the notice, the appellants submitted that in fact the notice admits in clear terms that Pippali is a synonym for Long Pepper and that the goods are in fact Long Pepper . 13.3 The learned counsel for the appellants has referred to literature on piper longum (Long Pepper) in this context also. THE INDIAN MAT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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