TMI Blog2016 (3) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... cides" purpose. Therefore, in the absence of any evidence contrary to the declared goods cleared in the past by the appellants, it cannot be said that the appellants have suppressed the facts or misdeclared the goods merely based on the report of live consignment and on the basis of the CRCL report of Customs the goods were rightly classified as “Plant Bio-Fertilizer”. Confiscation and Imposition of Redemption fine in respect of live consignment - Sections 111 (d), (m) and (o) of the Customs Act, 1962 read with Section 3 (3) of the Foreign Trade (Development and Regulation) Act 1992 and Section 17 of the Insecticides Act, 1968 - Held that: based on the test reports, the adjudicating authority classified the goods as Pesticides and the appellants have not contested the classification of the goods covered in the live consignment. As the import of Pesticides are prohibited under Section 17 (1) (a) of Insecticides Act, 1968 and the appellants have not obtained registration from the Central Insecticide Board (CIB) for the import of Pesticides, therefore, the goods are liable to be confiscated under Section 111 (d) of Customs Act, 1962. Also as the goods are not re-exported and they h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dt.6.5.2010 was issued to the appellant proposing rejection of classification of goods as Plant Bio Fertilizer , and for reclassifying the goods as Pesticides under CTH 38089910. The notice also demanded differential duty on the past consignments covering 16 Bills of Entry. SCN proposed for confiscation under Section 111 (d), (m) and (o) of Customs Act and also proposed for penalty under Section 112(a)/114A/14AA both on the appellant as well as on Shri Rajwant Singh, Managing Director of the appellant-company. The adjudicating authority after following the principles of natural justice in the impugned order rejected the classification of the imported goods under CTH 31010099 and reclassified the goods under CTH 38089910 and ordered for confiscation of 16,000 Kgs of seized goods covered under live Bill of Entry No.331475 dt. 12.10.2009 and allowed for re-export of goods imported under B/E No.331475 dt.12.10.2009 on payment of a redemption fine of ₹ 5 lakhs. He also imposed penalty of ₹ 2,50,000/- each under section 112 (a) of Customs Act on the appellant and on Shri Rajwant Singh, Managing Director. 3. The adjudicating authority also ordered confiscation of 1,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to private lab and got tested. As per the test report dt. 27.11.2009 (available at page 159 of PB) issued by M/s. Inspectorate Griffith India Pvt.Ltd. the sample was found to contain Oxymatrine content of 0.41%. In addition to that, sample also contained Nitrogen, Phosphorous content also conforms the composition list of the exporter. The test report opined that the declared content of 0.36% of Oxymatrine is to be treated as Pesticides rather than Fertilizer . For the live consignment, he admits the classification of the goods as Pesticides under chapter 38 as per Honble Supreme Court decision in the case of UOI Vs Pesticides Mfg. Formulators Association of India - 2002 (146) ELT 19 (SC). He submits that they are only contesting the demand confirmed for the past clearance and the live Bill of Entry dt.12.10.09. He drew our attention to Note (6) of Chapter 31 wherein it is explained that for the purpose of Heading 31.05, the term other fertilisers applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of the fertilising elements, nitrogen, phosphorous or potassium. For the past 16 consignments the demand is hit by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have not re-exported the goods as ordered by the Commissioner. Therefore, redemption fine and penalty are not imposable. He submits that department relying on e-mail dt. 6.11.2009 for alleged misdeclaration is not correct as the e-mail which they have sent on 6.11.09 is only to inform the supplier about the test results of the live B/E and appraising the supplier of the department s stand for classifying the goods as pesticides under Chapter 38. He also submits that appellants are not liable for penalty under Section 114A and 114AA penalty for the past consignments. Notwithstanding, he admits that if at all penalty is imposable, it is only in respect of live consignments covered under Bill of Entry No.331475 dt. 12.10.2009, section 112 penalty can be imposed. For the live Bill of Entry, they have already paid differential duty of ₹ 9,74,261/- as Bio-Fertilizer and already predeposited ₹ 15 lakhs as per the Tribunal s stay order 7. On the other hand, Ld. A.R reiterated the investigation proceedings brought out in the SCN and the OIO and submits that Shri Rajwant Singh, Managing Partner had tie up with foreign supplier for setting up of a joint venture and floa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 885/- is liable to be recovered from M/s.Penshibao Wong, Bangalore under proviso to Section 28 (1) of the Customs Act, 1962, along with interest payable under Section 28 (AB) on the imported goods cleared by them under the aforesaid 16 past Bills of Entry by invoking the larger period of limitation is hit by limitation and whether penalty imposed under Section 114/114A is sustainable. 9. We propose to discuss the live consignment covered under B/E No.331475 dt. 12.10.2009. (i) The facts as set out in the preceding paragraphs shows that the appellant imported 16000 Kgs. of goods declared as Bio-Fertilizer under said Bill of Entry and the samples were drawn and sent for testing to private laboratory. As per test report the goods were found to contain Oxymatrine 0.41 % and in addition, it also contained Nitrogen and Phosphorous and other minerals and conformed the certificate of composition list of the supplier. The appellant classified the goods under Chapter Heading 31010099 of the CTH whereas the Revenue reclassified the goods under CTH 38089910 as other pesticides and the adjudicating authority confiscated the goods 16000 Kgs. and also allowed for re-export of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter and its Managing Partner, Shri Rajwant Singh. Impugned order to this extent is upheld. 10. We now proceed to discuss the demand confirmed on the past clearances under 16 Bills of Entries which is contested by the appellant both on merits and on limitation. On perusal of records, copy of Bill of Entry No.268877 dt. 23.7.2009 annexed at page 144 of the paper book and the corresponding invoice No.00241428 dt. 1.6.2009 and the composition list at page 142 143, it is noticed that the appellants have declared their goods in the Bill of Entry as Plant Bio-Fertilizer as per the invoice, classified the goods under Chapter Heading 31010099 of the CTH, the Department assessed the Bill of Entry and the samples were drawn and tested by CRCL and as per Test Report the goods were allowed clearance as Bio-Fertilizer. The CRCL Test report dt. 31.3.2005 (annexed at page 160) signed by the Chemical Examiner, CRCL, Custom House in respect of the sample covered under B/E No. 702556 dt. 21.10.2004 is reproduced as under :- BE No.702556/21.10.04 (Lab No.1454/MCH/1711.04) As per the technical literature enclosed the product Sophora Plant Extract (Biofertilizer) is a biologically d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the entire proceedings initiated by the Customs for the past clearances which is purely based on the test report of the live consignment covered under B/E No.331475 dt. 12.10.2009. We find that the adjudicating authority has considered only the remarks given in the said test report for the live consignment. The Customs Laboratory test reports for the past consignments confirming the goods as Bio-Fertilizer is valid for the said imports and in the absence of any contrary report evidence against the CRCL report, the adjudicating authoritys finding that the past consignments were only Pesticides not Fertilizers is beyond acceptance and not in conformity with the law. 12. In this regard, we find from the technical literature of Wikipedia Encyclopaedia in respect of source material Plant Sophora Flavescens , the origin, medicinal properties and the usage has been described. The extract of the root contains various Alkaloids including Matrine and its oxide, matrine oxide. The product has been used in pharmacology for treatment of cancer, cardiac disorders and as an anti-inflammatory and anti-oxidant, it is used for inflammatory disorders such as rheumatoid arthiritis, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were for supply for Defence purposes also was found to be correct on facts as batteries manufactured from the imported materials were supplied to M/s. HAL. There was no misdeclaration or suppression with intent to evade duty merely because the exemption claimed was found to be inadmissible by Customs later or for the allegation that the said certificate was a forged one. Customs authorities should have checked its admissibility in time. As such the extended period was not invocable and the demand issued after 3 years was held to be time-barred. The ratio of the above Supreme Court judgement is squarely applicable to the present case as the goods imported in the past were correctly and fully declared in the Bill of Entries as per the invoice and as per the analysis certificate of the supplier which is confirmed by the CRCL test report and there is no misdeclaration or suppression with intent to evade duty. Accordingly, the re-classification of the goods ordered by the adjudicating authority for the past 16 consignments and the confirmation of demand of differential duty of ₹ 70,45,440/- under Section 28 of the Customs Act is not sustainable and liable to be set aside. Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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