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TMI Blog2014 (9) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No.21/2002. 2.2. The Customs Audit objected to the import stating that the goods imported are meant for use as pesticides/insecticides/fungicides and, therefore, such goods should be classified under Heading 38.08 at 10% basic duty instead of 7.5% as originally assessed and cleared. Consequent to the same, show cause notices dated 10.7.2009 and 18.7.2009 were issued to the respective appellants asking them to show cause as to why the duty short levied should not be collected. The appellants submitted their replies and after hearing the appellants, the Additional Commissioner of Customs confirmed the demand under Section 28(2) of the Customs Act, 1962 with interest. The relevant portions of the said orders passed by the Additional Commissioner of Customs read as under: C.M.A.No.2442/2014: 'I confirm the demand of Rs. 10,63,416/- (Rupees Ten Lakhs Sixty Three Thousand Four Hundred and Sixteen Only) issued on 10.7.2009 to M/s.J.U.Pesticides & Chemicals Pvt. Ltd., Chennai 600 008, under Section 28(2) of Customs Act, 1962 with applicable interest.' C.M.A.No.2443/2004: 'I confirm the demand of Rs. 42,00,600/- issued on 10.7.2009 to M/s.Tropical Agro System (Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) held that technical grade pesticides in bulk form are covered under Heading 38.08. On perusal of the records, we find from the invoice at page 32 that the goods in question are technical grade pesticides in bulk form which is covered by the decision of the Hon'ble Supreme Court. In view of that, the applicants failed to make out a prima facie case for waiver of predeposit of entire dues. As the case, prima facie, is covered by the decision of the Hon'ble Supreme Court, we direct the applicant to predeposit the entire amount of duty i.e. Rs. 10,63,416/- (Rupees ten lakhs sixty three four hundred sixteen only) and Rs. 42,00,600/- (Rupees forty two lakhs six hundred only) respectively within a period of eight weeks and report compliance on 31.7.2014. Upon such deposit, predeposit of the balance dues stands waived and recovery thereof stayed during the pendency of the appeals. 6. As the matter was decided by the Commissioner (Appeals) without going into the merits of the case, both the sides are at liberty to mention at the time of compliance of stay order for necessary direction." 2.5. Aggrieved by the said order, the present appeals are filed raising the following subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified form as preparations or articles alone will be classifiable under Heading 3808, whereas in the case on hand, there is a specific description of the goods imported and specific entries are provided under Chapter Heading 29 and, therefore, it will not fall under Heading 38.08. The learned counsel pleads that there is a prima facie case in favour of the appellants and the pre-deposit directed to be made should be waived. 4.1. Mr.A.P.Srinivas, learned Standing Counsel appearing for respondents 2 and 3 laid emphasis on the decision of the Supreme Court in Pesticides Manufacturing and Formulations Association of India, referred supra, to contend that the Tribunal was justified in ordering pre-deposit of the entire amount. He reiterated the fact that the goods imported fall under Heading 38.08 and in this regard, he placed reliance on paragraph (22) of the decision in Pesticides Manufacturing and Formulations Association of India, referred supra, which reads as under: "22. The final position as it now stands is that Chapter Note 1(a)(2) and 2 of Chapter 38 read: '1. This Chapter does not cover: (a) Separate chemically defined elements or compounds with the exception of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of the Import/Export Policy. For example, sub-heading 3808.10.11 mentions 'Aldrin' as a form of insecticide. Against that sub-heading, it is provided that it is freely importable/exportable 'if registered and not prohibited for import under Insecticides Act, 1968 and formulations thereof'. Similarly, 3808.90.10 provides for pesticides, not elsewhere specified . It is treated as a free item under the policy 'if registered and not prohibited for import under the Insecticides Act, 1968 and formulations thereof'. Undeniably insecticides, pesticides etc. in whatever form are covered by the Insecticides Act. The description demonstrates that bulk concentrates and formulations are covered by the sub-heading 'Aldrin'. The use of the came words in the Tariff Heading in the Schedule to the 1985 Act as has been used for the purposes of the Import Trade Control Policy is an additional reason for holding that insecticides, pesticides concentrates in bulk forms are includible within the Tariff Heading. (See Dunlop India Ltd. v. Union of India and Others 1976(2) SCC 241.) 5. We have heard Mr.S.Murugappan, learned counsel for the appellants and Mr.A.P.Sriniv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r retail sale; and insecticidal/pesticidal articles. The Board also took note of the view that as per rule 3 of the General Rules for the interpretation of Import Tariff, 'When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description'. Therefore, Boric Acid should be classifiable under Chapter 28 of the Tariff, both under Central Excise Tariff and Customs Tariff. 4. In view of the above, it has been decided by the Board that the classification of 'Boric Acid', in supersession of its earlier circulars, would be under heading 2810; technical grade pesticides for insecticidal use or Boric Acid put up for retail sale or other specified forms as preparations or articles alone will be classifiable under 3808. This is being clarified for the purpose of uniformity in classification and for the purpose of levy and assessment thereof in respect of Boric Acid and similar separate chemically defined compounds. 5. Customs and Central Excise fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even though the appellants have not pleaded undue hardship, considering the nature of the imports made by the appellants in the light of the clarification issued by Circular No.34/2007-Cus, dated 17.9.2007, we are of the considered opinion that an arguable issue has been raised by the appellants insofar as the merits of the case is concerned. 12. At this juncture, it would be apposite to refer to a decision of the Supreme Court in Benara Valves Ltd. v. CCE, (2006) 13 SCC 347, wherein it has been held as under: "8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka, (1993) 3 SCC 467 that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interests of the Revenue. Therefore, the Tribunal while dealing with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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