TMI Blog2024 (3) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural purposes and cleared to the farmers. Its use for agricultural purposes has been supported by certificates issued by the University of Agricultral Sciences, Bangalore. Thus, the impugned goods in question i.e. brush cutters is correctly classifiable under CTH 8467 8990 of CTA,1975. Therefore, the question of classification is settled and hence, the impugned goods are classifiable under 8467 as brush cutters. Whether the benefit of notification is available to brush cutters - Since we have already decided that the item imported is a brush cutter, therefore the question of extending the benefit of Notification does not arise. In view of the Supreme Court s decision in the case of Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company [ 2018 (7) TMI 1826 - SUPREME COURT] , the exemption Notification has to be interpreted strictly and therefore, question of extending the benefit to brush cutter does not arise. It is also on record that in appellant s own case, this Bench vide Final Order No.20934-20936/2018 held that the appellants are not eligible for exemption under Notification No.21/2002. As regards to demand against extended period of limitation, though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 sets of Rotary Power weeders and claiming exemption under Notification No.12/2012 [Sl. No.399 (a)] and at 2.5% BCD and Nil rate of CVD. Appellant vide letter dated 2.1.2014 requested for provisional release of the goods and goods were provisionally released on 23.1.2014 on execution of Bond for an amount of Rs.40,58,791/- and Bank Guarantee of Rs.20,29,396/- and also entire duty demand of Rs.8,52,833/- was paid. On further detailed investigations, Appellants were issued show-cause notice dated 5.5.2014 demanding differential duty on the mis-declared imported goods. On adjudication of the show-cause notice, the original adjudicating authority rejected the classification claimed by the appellant and demanded differential duty of Rs.4,30,14,978/- in terms of provisions of proviso to earlier Section 28(1) or Section 28(4) of the Customs Act, 1962 along with interest and penalty and imposed personal penalty on Shri S.A. Gopalakrishna, CEO and Director of the appellant-company under Section 112 114AA of the Customs Act, 1962 and also imposed redemption fine of Rs.1,50,00,000/- under Section 111(m) of the Customs Act, 1962. Aggrieved by this order, appellants are before us. 2. Shri B. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er manual produced by the Appellant before the Hon ble Bench during hearing on 05.09.2023 was also produced before the original authority at the time of import. It may be seen that, on the cover page at the top the words POWER WEEDER / SHOOT PRUNER are printed and at the bottom of the cover page the instructions given are read as Please read the following instructions before you use this brush cutter to ensure safe operation . It may also be seen from the printed images of the import items on the user manual, especially from the images at the page no. 5 8, that the import item is a hand-held device and also it can be seen that the cutting blades are designed exclusively for brush cutting and therefore it may be concluded from the user manual itself that the import goods are Brush Cutters Model No. AMH 200 and are hand held machines used for brush cutting purpose. A brand name of AGRIMATE was given on the user manual. However, there are no other details on the user manual to prove that the said machines are used exclusively for agriculture purpose. 3.2 In Budget 2012, concessional duty of customs was provided, specifically to agriculture and agro-processing sectors, from 7.5% /5% to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... walls, boarders or under bushes, for example . . From the user manual of Agrimate AMH 200 Brush Cutter and the images therein it may be seen that the said Brush Cutter is a hand-held device and from the information available on the internet, it is found that the said Brush Cutters are very light weight equipment, with weight of 7.7 Kgs and the weight of the main part i.e., engine Honda GX-35 is only 3.33 Kgs Therefore, the impugned equipment is a portable device. The said Brush Cutter also has a self-contained engine and therefore, the Adjudicating Authority has rightly classified the said Brush Cutters under CTH 84678990. Whereas, the CTH 8432 refers exclusively to Agricultural, horticultural or forestry machinery, the CTH 8467 refers to the tools used in various industries. While Tillers / Power Weeders are exclusively used for Agricultural or horticultural work, the portable Brush Cutters are usable at various other work as mentioned at HSN Explanatory Note under CTH 8467 Sl. No. (18). Therefore, the impugned Brush Cutters are not exclusively usable for agricultural purpose. Hence, it is the benefit of concessional duty of customs provided exclusively to agricultural equipment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period on similar issues, the hon ble CESTAT Bengaluru vide Final Order No.20934-20936/2018 dated 10.07.2018 {Ratnagiri Impex Pvt Ltd Versus Commissioner of Customs, Bengaluru [2019(369) ELT 1132 (Tr. Bang.)]} held that the Appellant M/s Ratnagiri Impex are not entitled for exemption under Notification No.21/2002-Cus. The Extended Period was also held to be invokable as and also the penalties imposed on the Appellant company and the Director was also upheld. The ratio of the said judgment is applicable to the instant case also. 3.7 The learned Authorised Representative also relied on the following case laws and the ratio of judgements therein, as applicable to the instant case: (i) Commissioner of Customs (Import), Mumbai Versus Dilip Kumar Company [2018 (361) ELT 577(SC)] wherein the Larger Bench of Hon ble Apex Court has held that the burden to prove the entitlement for claiming exemption is on the assessee and that, it any ambiguity in exemption notification, benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in favour of the revenue. (ii) M/s. Bayer India Ltd Versus Commissioner of Central Excise, Mumbai [2001 (130) ELT 97 (Tri. Mumbai)] At p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for mis-statement and suppression by the party. 4. Heard both sides and perused the records. The issues involved in the present appeal for determination are: (i) Whether the goods are power weeders or brush cutters (ii) Whether the goods are classifiable under CTH 8432/8433 as claimed by the importer or under CTH 8467 as claimed by the Revenue (iii) Whether the benefit of concessional rate of duty 2.5% advalorem in terms of Notification No.12/2012 dated 17.3.2012 is available. (iv) Whether the appellant mis-declared the description of the goods to evade payment of duty. 5. On verification by the department, the products were mentioned as Agrimate and on the package, it was mentioned as This cutting blade is designed exclusively for brush cutter. Do not use it for other applications . The user manual produced before us reads as please read the following instructions before you use this brush cutter to ensure safe operation . The learned AR has also placed on record the document which mentions the item as Agrimate AMH 200-4S Brush Cutter , which is from the Ministry of Agricultural and Farmers Welfare and therefore which is similar to the product imported by the appellant which is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HAY MOWERS; MACHINES FOR CLEANING, SORTING OR GRADING EGGS, FRUIT OR OTHER AGRICULTURAL PRODUCE, OTHER THAN MACHINERY OF HEADING 8437 - Mowers for lawns, parks or sports-grounds: 843311 -- Powered with the cutting device rotating in a horizontal plane: 84331110 --- Powered with 3 HP or more u 7.5% - 84331190 --- Other u 10% 843319 -- Other : 84331910 --- Non-powered mowers, having width of 75 cm or more u 7.5% - 84331990 --- Other u 10% - 84332000 - Other mowers, including cutter bars for tractor mounting u 7.5% - 84333000 - Other haymaking machinery u 7.5% - 84334000 - Straw or fodder balers, including pick-up balers u 7.5% - - Other harvesting machinery; threshing machinery : 84335100 -- Combine harvester-threshers u 7.5% - 84335200 -- Other threshing machinery u 7.5% - 84335300 -- Root or tuber harvesting machines u 7.5% - 84335900 -- Other u 7.5% - 843360 - Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce : 84336010 --- Machines for cleaning u 7.5% - 84336020 --- Machines for sorting or grading u 7.5% - 84339000 - Parts kg. 7.5% - 8467 TOOLS FOR WORKING IN THE HAND , PNEUMATIC HYDRAULIC OR WITH SELF- CONTAINED ELECTRIC OR NON-ELECTRIC MOTOR - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers, whether worked by hand or motor driven. They may have a cutter bar like agriculture mower, rotary blades which cut the grass against a fixed horizontal blade, or rotating disc with knives on outer edge. (2) Mowers (including Motor mowers) for cutting hay etc. They usually consist of a horizontal cutter bar and sections which cut by oscillating action of teeth between the fingers of cutter bar, or they may consist of rotating discs or drums with knives on outer edge. ------ (21) Machines for removing leaves from maize (corn) cabs; maize (corn) threshers. However, this heading excludes portable machines for trimming lawns, cutting grass along walls, borders or under bushes, for example. Thes machines, which are composed of a self-contained internal combustion engine in a light frame or of an electric motor mounted on a metal handle and cutting device usually consisting of one or more thin nylon threads are classified in heading 8467. (emphasis supplied). 8.4.1 The Explanatory Notes to CTH 8467 are follows: This heading covers tools which incorporate an electric motor, a compressed Air Motor (or compressed air operated piston), on internal combustion motor or any other motor (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held in a series of cases that the explanations for classification of particular product mentioned in the HSN cannot be brushed aside in determining the correct classification of a product. The Hon ble Apex Court in CC, Bombay Vs. Business Forms Ltd. - 2002-TIOL-277-SC-CUS-LB held as below: These civil appeals arise on orders of the Customs, Excise and Gold (Control) Appellate Tribunal and they have to be allowed and the matters remanded for re-consideration by that Tribunal because, principally, the Tribunal has declined to place reliance upon the Explanatory Notes in the H.S.N. stating that, at best, these have only persuasive value. 2. This Court in Collector of Central Excise, Shillong v. Wood Craft Products Limited [1995 (77) E.L.T. 23] has said : We are of the view that the Tribunal as well as the High Court fell into the error of overlooking the fact that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and, therefore, be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself. The definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r /weeder and not brush cutters. As seen at para 7 (supra) is very clear that the machinery mentioned in the above notification are all those machineries namely weeder, planters, transplanters, rotary tiller, root tuber harvesting machine which are specifically designed and used for the purpose of agriculture and the brush cutters are nowhere to be considered a machinery as discussed supra. Since we have already decided that the item imported is a brush cutter, therefore the question of extending the benefit of Notification does not arise. In view of the Supreme Court s decision in the case of Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company: 2018 (361) ELT 577 (SC), the exemption Notification has to be interpreted strictly and therefore, question of extending the benefit to brush cutter does not arise. It is also on record that in appellant s own case, this Bench vide Final Order No.20934-20936/2018 dated 10.07.2018 held that the appellants are not eligible for exemption under Notification No.21/2002. 9. As regards to demand against extended period of limitation, though it is admitted by the appellant that they were aware about the fact that power weeder is a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble, there is no question of redemption of the goods. Under Section 125 a power is conferred on the Customs Authorities in case import of goods becoming prohibited on account of breach of the provisions of the Act, rules or notification, to order confiscation of the goods with a discretion in the authorities on passing the order of confiscation, to release the goods on payment of redemption fine. Such an order can only be passed if the goods are available, for redemption. The question of confiscating the goods would not arise if there are no goods available for confiscation nor consequently redemption. Once goods cannot be redeemed no fine can be imposed. The fine is in the nature of computation to the state for the wrong done by the importer/exporter. 6. In these circumstances, in our opinion, the tribunal was right in holding that in the absence of the goods being available no fine in lieu of confiscation could have been imposed. The goods in fact had been cleared earlier. Therefore, the confiscation and redemption along with penalty for the extended period is set aside and for the present consignments valued at Rs. 40.58 lakhs, the redemption fine is reduced to Rs.4,00,000/- (Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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