TMI Blog2023 (1) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of the submissions by the learned counsel. The submission of the learned counsel that the scope of the Tribunal s order gets circumscribed by the appellant s submissions during the proceedings cannot be accepted. The Commissioner was correct in examining whether the goods were preparations and such an examination was within the scope of the remand order. Retail packages- scope - HELD THAT:- Both sides agree that retail packing is not defined in the tariff. Both sides refer to different Rules of the Legal Metrology Rules to interpret the term. According to the learned counsel for the appellant, the goods were not in packings meant for consumer and hence were not retail packings in terms of Rule 2(k) of the Legal Metrology Rules. According to the learned authorised representative for the Revenue, since only packages of more than 25 kg or 25 litres are excluded as per Rule 3 of the Legal Metrology Rules, the packages in question, being of up to 25 kg do qualify as consumer packings - while it is true that all packings over 25 kg are clearly excluded from the Legal Metrology Rules, it does not necessarily mean that all packings up to 25 kg are included from them and furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brassinolide was a preparation. Since the brassinolide is in the form indicated in CTH 3808 by being preparation, it is not excluded by Chapter Note 1 (a) (2). Therefore, it falls under CTH 3808. Extended period of limitation - HELD THAT:- As far as the description of the goods, quantity, etc. are concerned, the importer is bound to state the truth in the Bill of Entry. Thus, simply claiming a wrong classification or an ineligible exemption notification is not a mis-statement. Assessment, including self-assessment is a matter of considered judgment and remedies are available against them. While self-assessment may be modified by through re-assessment by the proper officer, both self-assessment and the assessment by the proper officer can be assailed in an appeal before the Commissioner (Appeals) or reviewed through an SCN under section 28. Therefore, any wrong classification or claim of an ineligible notification or wrong self-assessment of duty by an importer will not amount to mis-statement or suppression. Extended period of limitation can be invoked in case of collusion or any willful mis-statement or suppression of facts. According to the Revenue, the appellant had wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the officer during assessment. It is also found that section 111(m) does not apply. Consequently, penalties under section 112 cannot be sustained - The penalties under sections 114A and 112 imposed on the appellants are not sustainable and need to be set aside. Appeal disposed off. - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT AND HON BLE MR. P V SUBBA RAO, MEMBER(TECHNICAL) Appearance:. Present for the Appellant :Shri Amit Jain, Advocate Present for the Respondent: Shri Nagendra Yadav, Authorised Representative P V SUBBA RAO: 1. These appeals arise out of two impugned orders and are on the same issue of classification of the goods described as 0.1 percent natural brassinolide fertiliser and classified under Customs Tariff Heading [CTH] 3101 00 99, 3105 10 00 and 3105 90 90 by the appellants and which is classifiable under CTH 3808 93 40 according to the Department. These appeals cover 28 consignments imported between 13.12.2012 to 16.05.2015 by M/s Midas Fertchem Impex Pvt Ltd. and 60 consignments imported by M/s Midas Import Corporation between 04.12.2010 to 27.01.2015. Smt. Rashmi Jain and Shri Manish Jain are the Directors of M/s Midas Fetc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 6,00,000/- on the Authorized Signatory u/s 112 (a) of the Customs Act, 1962. Demand beyond/within the normal period of limitation 25 Bills of Entry filed upto 16.11.2014 (involving demand of Rs.75,34,208/-) are beyond the normal period of limitation. Only 3 bills of Entry filed post 16.11.2014(involving demand of Rs. 5,80,328/-) are within the normal period of limitation. 56 Bills of Entry filed upto 16.11.2014 (involving demand of Rs. 1,08,41,143/-) are beyond the normal period of limitation. Only 4 bills of Entry filed post 16.11.2014(involving demand of Rs. 12,78,750/-) are within the normal period of limitation. 2. The appellant importers imported the goods described as 0.1 per cent natural brassinolide fertilizer and classified it as fertilizer under various headings of Chapter 31 of Customs Tariff as discussed above. The Bills of Entry were assessed by proper officers. In many cases, the officers also called for literature from the appellants, examined it and thereafter assessed the Bills of Entry. Thereafter, on receiving intelligence from the Directorate of Revenue Intelligence [DRI] the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l test in the present imports the classification has necessarily to be done based on documents recovered, literature filed by the appellant. When specifically asked about availability of current imports or samples from past imports we were informed no such samples were available and no imports currently. In such situation the classification has to be done with available literature and import documents only. 7. In view of the above discussion and analysis, we note that the matter has to go back to the Original Authority to re-decide based on the observations made above. The applicability of chapter note and also the instructions issued by the Board alongwith that of competent authorities of Central Insecticides Board Registration Committee, Insecticides Act etc. are to be examined by the Original Authority. The applicability of limitation as strongly contended by the appellant, as well as liability of the penalty, may also be decided afresh. 8. Keeping in view of the above observation, the appeals are allowed by way of remand. 4. Thereafter, the Commissioner passed the orders impugned in these appeals again confirming the demands along with interest and imposing pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bill of Entry is an adjudication order and if within the period provided under customs act appeal before Jurisdictional Commissioner (Appeals) is not filed then the assessment becomes final and such final assessment cannot be reopened. In the present case the assessment were made during the period from May 2010 to January 2011 and after the appeal period of around three months were over the said assessment became final and therefore through the said show cause notice dated 29 May, 2015 the said assessments were not open for reassessment. Further we note that the assessment were finalized during May 2010 to January 2011 and all the information required for assessment was provided by the appellant and therefore the allegation of suppression of fact made on 29 May, 2015 are not sustainable. Therefore, the proceedings are hit by limitation. We therefore hold that the impugned order is neither sustainable on merits nor sustainable on point of limitation. We, therefore, set aside the impugned order and allow both the appeals. (ii) Commissioner of C. Ex. Aurangabad vs. Vediocon Appliance 2009 (235) ELT 513 (Tri.- Mumbai). Paragraph 8 reads as follows: 8. It is fact the Bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (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. *** 7. We have considered the submissions on both sides on this issue. 8. The short question which needs to be answered is whether SCN under section 28 can be issued after the assessment is finalized (either through self assessment or through assessment by an officer) without first appealing against the assessment. The answer to this question lies in the judgment in Priya Blue Industries paragraphs 6,7 and 8 are reproduced below: 6. We are unable to accept t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. Self-assessment is done under section 17(1) and re-assessment is done under section 17(5). The process of assessment (self-assessment and re-assessment) under section 17 comes to an end once an order permitting clearance of goods for home consumption under section 47 is issued by the proper officer. Thereafter, the goods cease to be imported goods and no assessment of duty is possible under section 17. The only exception is where the duty is provisionally assessed for want of documents, test reports, etc. and goods are cleared for home consumption in which case the process of assessment gets completed when the assessment is finalized. 11. Once an order under section 47 permitting clearance of goods for home consumption is issued, the assessment can be modified either through an appeal by either side before the Commissioner (Appeals) or through an SCN under section 28. While the option of appeal is open to both sides to assail the assessment on any ground, the scope of an SCN under section 28 is limited by WHO, WHEN and WHY. Only the proper officer can issue the SCN, within the normal period of limitation or the extended period of limitation of five years (as the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel s submissions are accepted, section 28 becomes otiose. 14. A question may arise as to what is the nature and scope of SCN under section 28 if an appeal against assessment (including self-assessment) before Commissioner (Appeals) is available to both sides. This has been answered by the Constitution Bench of the Supreme Court in Cannon India Pvt. Ltd. Vs. Commissioner of Customs 2021 (376) ELT 3 (SC) and the relevant portion of the judgment is as follows: 12. The nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import, is broadly a power to review the earlier decision of assessment. Such a power is not inherent in any authority. Indeed, it has been conferred by Section 28 and other related provisions. The power has been so conferred specifically on the proper officer which must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods i.e. the Deputy Commissioner Appraisal Group. Indeed, this must be so because no fiscal statute has been shown to us where the power to re-open assessment or recover duties which have escaped assessment has been conferred on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ignored if it is rendered, in ignoratium of a statute or other binding authority . ( Young vs. Bristol Aeroplane Co. Ltd. (1944) 2 All ER 293 (CA) Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. 36. The maxim per incuriam is derived from the latin expression that means through inadvertence . The literal meaning of the expression per incuriam is through want of care . In Black s Law Dictionary, 5 th Edition, it has been defined as through inadvertence . In Halsbury s Law of England Fourth Edition, Volume 26, it has been stated: A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of co-ordinate jurisdiction which covered the case before it, in which case it must decide which case to follow; or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statue or rule having statutory force. A decision should not be treated as given per incuriam, however, simply becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Blue, Flock India, ITC Ltd. And Cannon India. c) The decisions in P G Electroplast Ltd. And Videocon Appliances, which learned counsel for the appellants relied on are per incuriam because they are contrary to the judgments of the Supreme Court; d) Holding a view that a notice under section 28 can be issued only after the assessment is modified on appeal renders section 28 itself otiose because there cannot be any SCN and adjudication by an officer to modify the assessment after an order in appeal is passed by the Commissioner (Appeals). B. Scope of remand 17. Learned counsel vehemently argued that the impugned order travelled beyond the scope of the remand order and cannot be sustained. The appellants had classified the imported goods as fertilisers under Chapter 31 of CTH. After investigation and seeking expert opinion, Revenue found that the imported goods were not fertilisers but were plant growth regulators. Revenue also found that although the importers classified the good as fertilisers in Bills of Entry, they had been selling it to its customers as plant growth regulator. The Show Cause Notice was issued proposing to classify the goods as Plant Growth Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Heading 3808. This is with reference to note 1 (a) (2) of the said Chapter 38. The learned Counsel fairly accepted that this was not examined earlier as this was not raised / contested also. Since, this has a bearing of classification this aspect should be examined before arriving at classification under 3808 as the same is guided by chapter note also. Further, in the absence of chemical test in the present imports the classification has necessarily to be done based on documents recovered, literature filed by the appellant. When specifically asked about availability of current imports or samples from past imports we were informed no such samples were available and no imports currently. In such situation the classification has to be done with available literature and import documents only. 7. In view of the above discussion and analysis, we note that the matter has to go back to the Original Authority to re-decide based on the observations made above. The applicability of chapter note and also the instructions issued by the Board along with that of competent authorities of Central Insecticides Board Registration Committee, Insecticides Act etc. are to be examined b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the submissions by the learned counsel. The submission of the learned counsel that the scope of the Tribunal s order gets circumscribed by the appellant s submissions during the proceedings cannot be accepted. The Commissioner was correct in examining whether the goods were preparations and such an examination was within the scope of the remand order. C. Retail packages- scope 25. The Customs Tariff does not define retail packings . According to learned counsel for the appellant, the finding in the impugned order that the packages in which the impugned goods were imported were retail packages is based on a total misconstruction of facts, only on assumptions, without any factual or legal basis and without any supporting evidence. According to the learned counsel, the Commissioner s findings in this regard are not correct for the following reasons. (i) Based on enquiries on some e-commerce sites, the learned Principal Commissioner, in paragraph 5.4.2 of the impugned order observed that the goods imported by the Appellants in 20 Kg. drum or 25 packets of 1 Kg. each are available for retail sale and are in retail packages. (ii) These enquiries were made behind the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s meant for industrial consumers or institutional consumers. Explanation :- For the purpose of this rule,- i) institutional consumer means the institutional consumer like transportation, Airways, Railways, Hotels, Hospitals or any other service institutions who buy packaged commodities directly from the manufacturer for use by that institution. ii) ii) industrial Consumer means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry. 27. Learned authorised representative submits that it can be inferred from Rule 3 of Legal Metrology Rules that packings in excess of 25 kg or litres are definitely not retail packings. However, the appellant imported goods which were in packings of 25 kg or less. Therefore, they qualify as retail packings and hence fall squarely within the Customs Tariff heading 3808 and are not excluded by Chapter note 1(b). 28. We agree with the learned counsel for the appellant that the Commissioner has erred in collecting data and information in the form of enquiries through internet to come to the conclusion that the imported goods were not in retail packings. This evidence was ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the first round of litigation; the ground was not raised or discussed before the lower authorities. It is in this context, that the question as to if the goods were in the form of preparations had to be examined. 33. The second submission of the learned counsel is that it is beyond the scope of the remand. As we have already noted, the remand was with a direction to examine if the impugned goods get excluded from CTH 3808 because of the Chapter Note which excluded separately defined chemicals other than products in forms mentioned in CTH 3808. One of these forms is preparations. The Commissioner had, therefore, to examine if the goods were preparations. 34. The third submission of the learned counsel is that the finding has no legal basis nor any expert opinion was sought. An expert opinion or test or analysis is required if there is a question of the composition of the goods. In this case, there is no dispute the imported good is 0.1% Brassinolide. The rest are other inert material which predominate by weight. However, undisputedly, the essential character of the product is that of Brassinolide; and it was declared as such and was also sold as such. 35. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solved in water @ 1 gram in 10 litres water and sprayed. Therefore, it is not a technical grade plant growth regulator but a preparation in powder form. 37. Learned authorised representative draws attention to the Explanatory Notes to HSN 3808, which, inter alia, clarifies as follows: These products are classified here in the following cases only: (1) When they are put in packings (such as metal containers or paperboard cartons) for retail sales (2) When they have the character of preparations, whatever the presentation (e.g., as liquids, washes, or powders). These preparations consist of suspensions or dispersions of the active product in water or in other liquids (e.g. a dispersion of DDT (ISO) . Solutions of active products in solvents other than water are also included here (e.g., solutions of a pyrethrum extract) or copper naphtahalene in a mineral oil. Intermediate preparations requiring further compounding to produce the ready-for-use insecticides, fungicides, etc. are also classified here, provided, they already possess insecticidal, fungicidal, etc. properties. . 38. It is undisputed that the imported goods were brassinoli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when they are put up in the forms described in Chapter heading 3808, viz., as retail packings or as preparations or as articles. The imported goods meet two of these criteria as they are preparations and were also in retail packings. 41. We find that the brassinolide imported by the appellant is a plant growth regulator is no longer in dispute. Although it was described as fertilizer in the invoice and documents of the Chinese supplier and also in the Bills of Entry by the appellant, after importing, the appellant sold the goods as plant growth regulator . Evidently, it is understood as plant growth regulator even in the trade. This is consistent with the expert opinion from IARI and the CBEC s Circular based on which the SCN was issued. The appellant had not contested this fact before us or before this Tribunal in the earlier round of appeal. 42. The appellant s case during the first round of litigation was that even though it is a plant growth regulator, it is still not classifiable under 3808 in view of the Chapter Note 1(a) (2) to Chapter 38 and to examine this claim, the matter was remanded to the original authority because this defence was not taken before the orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso appears that the fact of Brassinolide being a PGR was in the notice of the said importer firm, but they intentionally mis- declared their said product as fertilizer while filing the Bills of Entry instead of declaring it as Plant Growth Regulator with an intention to evade payment of appropriate duty of Customs. It also appears that by imparting different versions of the manufacturer of the said product, the party is thereby mis-leading the department to support their stand on Brassinolide being a fertilizer and not a plant growth regulator, which appears to be incorrect and an act of malafide intention to evade their Customs duty liability. 45. The impugned order confirmed the demand on the grounds that the appellant misrepresented and suppressed facts. The relevant paragraphs are as follows: The importer by mentioning fertilizer on the BE and submitting incorrect facts before the assessing authorities has misguided them and cannot take the plea that the department was aware of the facts. This misrepresentation and suppression of facts at the time of assessment comes within the purview of sub section 4 of Section 28 of the Customs Act warranting invocation of extende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the submissions on both sides. Section 46 of the Act requires the importer of any goods to make an entry thereof by presenting a Bill of Entry. It also requires the importer to make a declaration that the contents of the Bill of Entry are true. Section 17(1) requires the importer to self-assess the duty payable on the goods which is subject to any re-assessment by the proper officer under section 17(4). These two sections read as follows: Section 46. Entry of goods on importation. - (1) The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting electronically on the customs automated system] to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed : ***** (4) The importer while presenting a bill of entry shall make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, and such other documents relating to the imported goods as may be prescribed. *** Section 17. Assessment of duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or in some cases, has not done the valuation fully as per the law, it cannot be said that the importer mis-declared. As far as the description of the goods, quantity, etc. are concerned, the importer is bound to state the truth in the Bill of Entry. Thus, simply claiming a wrong classification or an ineligible exemption notification is not a mis-statement. Assessment, including self-assessment is a matter of considered judgment and remedies are available against them. While self-assessment may be modified by through re-assessment by the proper officer, both self-assessment and the assessment by the proper officer can be assailed in an appeal before the Commissioner (Appeals) or reviewed through an SCN under section 28. Therefore, any wrong classification or claim of an ineligible notification or wrong self-assessment of duty by an importer will not amount to mis-statement or suppression. 51. Insofar as the description of the goods is concerned, usually, the import documents reflect the true nature and quantity of the goods imported but sometimes they may not. The importer is required to make a true declaration of the goods which are actually imported and not just the goods dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y because DRI sent an alert and after consulting the experts CBEC had issued Circulars according to which the goods deserve to be classified as plant growth regulators, it does not mean that the appellant have mis-declared or suppressed any facts. Therefore, no penalties are imposable. 55. Learned authorized representative for the Revenue supports the impugned orders and asserts that the importer was fully aware that the imported goods were plant growth regulators but had wrongly declared them as fertilizers and classified them accordingly to evade duty. This becomes evident from the fact that the appellant itself has, after importing the goods, been selling them as plant growth regulators. Therefore, it is not a case of innocent misdeclaration. Therefore, the penalties have been correctly imposed. 56. We have considered these submissions. The two sections under which penalties were imposed are section 114A and section 112. These read as follows: Section 114A. Penalty for short-levy or non-levy of duty in certain cases. Where the duty has not been levied or has been short-levied or the interest has not been charged or paid or has been part paid or the duty or int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher : Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined;] (iii) in the case of goods in respect of which the value s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed by or under this Act or any other law for the time being in force; ***** (m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 (2) in respect thereof or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to subsection (1) of section 54; ****** 59. As far as section 111(d) is concerned, there is nothing on record to show that there was any prohibition on import of the goods and so it does not apply to the present case. As far as 111(m) is concerned, we do not find any misdeclaration of the goods, although they deserved to be classified under CTH 3808 as plant growth regulators but all the documents including literature was made available to the officer during assessment. We, therefore, also find section 111(m) does not apply. Consequently, penalties under section 112 cannot be sustained. 60. We, therefore, find that the penalties under sections 114A and 112 imposed on the appellants are not sustainable and need to be set aside. H. Quantum of penalty cannot ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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