TMI Blog2023 (12) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... goods fail both the twin test for being considered as Ayurvedic medicament and therefore the products in question are nothing but food supplements promoted mainly for general health or well-being and therefore merit classification under 2108 of the CETA and more specifically under 2108.99, as it stood at the relevant time and assessed accordingly under section 4A of the Act for discharge of duty liability. The issue of classification was thus decided in favour of the revenue and against the assessee. There are thus no hesitation in concluding the issue of classification of the products in question under CTH 21069099 as food preparation - the issue of classification on merits stands affirmed in favour of the revenue and against the appellant. Invocation of the extended period of limitation under section 28(4) of the Act - HELD THAT:- In view of the proceedings which was pending since 2012 and the department itself had preferred an appeal, it cannot be said that the department was not aware of the classification of the products as declared in the instant bills of entry by the appellant and therefore no fault can be found on the part of the appellant as 9 out of the 10 bills o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and not mis-declaration of goods on the part of the appellant, the logical inference would be that the appellant has not wrongly claimed the exemption benefit and therefore there can be no confiscation under Section 111(o) of the Act. The appeal is remanded to the Adjudicating Authority for the limited purpose of computing the differential duty to be demanded in respect of normal period only - the appeal is partly allowed by way of remand. - MS. BINU TAMTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri T. Chakrapani, Consultant with Sh. Anil Kumar, Advocate for the appellant Shri Rakesh Kumar, Authorised Representative for the respondent ORDER Challenge in the present appeal is to the order in original No. 11/2020/MKS/Pr. Commr./ ICD-Import/ TKD dated 18/21.5.2022 passed by the Principal Commissioner affirming the classification and confiscation of the goods and the consequent demand of differential duty, interest and penalty, as proposed in the show cause notice. 2. The facts of the case are that the appellant is engaged in cultivation, manufacturing and marketing of the health food supplements, especially Ganoderma bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 576836 4932694.06 4355858.1 9286242 19.05.2015 Bulk Reishi Gano Powder 17060794 1054357 9134860.931 8080503.9 8183633 13.01.2017 Bulk Reishi Gano Powder 18240600 1127269 9766564.458 8639295.5 4305997 07.12.2017 Bulk Reishi Gano Powder 17377500 2085300 9894748.5 7809448.5 4346737 11.12.2017 Bulk Reishi Gano Powder 18344700 2201364 10445472.18 8244108.2 5700445 23.03.2018 Bulk Reishi Gano Powder 18456900 2214828 16223615.1 14008787 Total 171588470.2 14612941 98856863.35 84243922 The importer had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1962 (hereinafter referred to as the Act). 7. We have heard the learned Counsel for the appellant and also the Authorised Representative for the revenue and have perused the records of the case. 8. The moot question in the present appeal is whether the product Reishi Gano and Ganocelium are classifiable as Ayurvedic medicaments under chapter 3003.9011 of the First Schedule to the Central Excise Tariff Act, 1985 (CETA) as contended by the appellant or as food supplements under CTH 2106999 of CETA. The relevant entries relied on by the appellant and the Department is as under:- 2106 Food preparations not elsewhere specified or included 2106 90 99 ---- Other 3003 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not pout up in measured doses or in 3003 9011 ---- Of Ayurvedic system 8.1 The said issue is no longer rest-integra and has been decided by the Chennai Bench in DXN Manufacturing In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was within the knowledge of the department at the time of clearing of the subject goods at the relevant time of imports as the department itself had filed an appeal against the Order-in-Appeal dated 17.02.2014 before the Tribunal and therefore the allegations of suppression are not made out and so the extended period of limitation cannot be invoked. The learned Authorised Representative for the revenue have submitted that the period of limitation has been rightly invoked and cited several judgements in support thereof. 10. We find that show cause notice was issued on 2.7.2018 for the period 03.07.2013 to 03.03.2018, covering several bills of entries as given in Table-A above which is per Annexure-A to show cause notice. In the appeal filed against the first assessment order dated 27.07.2012, the Commissioner (Appeals) vide order dated 16.08.2012 remanded the matter to the adjudicating authority to pass suitable order. On remand, the Adjudicating Authority vide order dated 24.05.2013 once again confirmed the classification under CTH 21069099, however, the appellant challenged the said order and the Commissioner (Appeals) vide order dated 17.02.2014, set aside the Order-in-Orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f entry contrary to the order of the Commissioner in good faith. 12. There is a well established practice in the department to deal with cases with the order which holds the field is against the revenue and an appeal is pending with the superior court or Tribunal. SCN are issued periodically to protect revenues interest and they are transferred to the call book which are then decided after the order of the superior Court or Tribunal is received. In these bills of entry also, after the order of the Commissioner (Appeals), SCNs could have been issued and transferred to Call Book and decided after this Tribunal passed the final order. However, until the final Order of this Tribunal was issued, the order of Commissioner (Appeals) was binding both on the importer and the officers. 11. The aforesaid observations of the Tribunal (against the present impugned order), holds the field that the appellant was justified in adopting the classification while filing the bills of entry. This is sufficient to turn down the revenue s contention about the existence of wilful suppression of facts or deliberate mis-statement on behalf of the appellant. For these reasons, the revenue was not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts are known to both the parties, the omission by one to do what he might have done, and not that he must have done, does not render it suppression. Thus when all the facts are before the department as in the present case then there would be no wilful mis-declaration or wilful suppression of facts with a view to evade payment of duty. The relevant para from the judgement in Nizam Sugar Factory (supra) is quoted below:- 4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the decision of this Tribunal dated 1.12.2022 (arising out of the same impugned order) refuting the observations of the Principal Commissioner on self assessment by the appellant, inter-alia observing: 14 .Self assessment is subject to any reassessment by the proper officer. Self assessment can also be appealed against to the Commissioner (Appeals). They can assess duty as per their understanding and the officers are free to reassess it as per section 17(4). Mis-classification or incorrect assessment of duty does not amount to mis-declaration in the bill of entry, nor does it attract any penalty. 15 ..We understand that the bills of entry are cleared on the basis of self assessment, they are subjected to post clearance audit. If so, it gives sufficient time to the officers to find if any duty has escaped assessment and issue a demand under section 28. However, there can be no penalty for wrong self-assessment by the importer . 16. On similar grounds, we hold that the appellant cannot be held liable for penalty under section 114 AA of the Customs Act and the reasoning given by the Principal Commissioner that at the time of presenting the bill of entry, the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption benefit and therefore there can be no confiscation under Section 111(o) of the Act. 20. We therefore partly allow this appeal and modify the impugned order to the following effect: a) The goods in question are re-classified as food preparations under CTH 2106 9099 b) The revenue cannot invoke the extended period of limitation and therefore the show cause notice is barred by limitation except to the extent of the normal period. c) The demand of differential duty is limited to the normal period, i.e. 03.07.2013 to 19.05.2015 and the same may be computed accordingly. d) The interest under the provisions of section 28AA of the Act is also to be charged and recovered from the appellant for not paying the due customs duties in respect of the normal period of demand. e) There cannot be any order of confiscation under section 111(m) or 111(o) of the Act. f) No penalty can be imposed on the appellant under the provisions of section 114A or under 114AA of the Customs Act, 1962. 21. The impugned order is partly set aside as referred to above and the appeal is remanded to the Adjudicating Authority for the limited purpose of computing the differential du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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