2017 (1) TMI 209 - AT - Customs

Tribunal classifies Boric Acid under CTH 2810, rules against Circular No. 61/2004

M/s Shakti Chemicals Versus Commissioner of Customs, JNCH, Nhava Sheva

The Tribunal ruled in favor of the appellant, holding that Boric Acid should be classified under CTH 2810 as it is predominantly used as a raw material, ... Classification of imported goods - Boric acid - end use of goods, significant to determine whether the import requires registration or not - certificate of registration from Central Insecticide Board or a certificate of end use from the concerned Ministry/Department of Government of India - it is to be determined whether the goods are used for insecticidal purposes or not and whether registration required or not? - confiscation of goods with imposition of redemption fine and penalty - Held that: - as per ITC (HS), the boric acid is specifically classified under CTH 2810, which is freely importable. From the findings of the Krishi Bhawan committee, it can be seen that the concerned Ministry is of the opinion that if boric acid is used for non-insecticidal purpose, no registration is required under the Insecticide Act, 1968. In other case, however, it may necessary to obtain registration. In the instant case, the imports have been made by the Traders and it is not clear that the boric acid imported have been used for insecticidal purpose - no evidence has been placed on record to establish that the material has been used for insecticidal purposes and therefore it cannot be said that registration under Insecticide Act is needed. Confiscation and penalty set aside - appeal allowed - decided in favor of appellant. Issues Involved:1. Classification of Boric Acid under the Customs Tariff.2. Applicability of Circular No. 61/2004 dated 28.10.2004.3. Requirement of registration under the Insecticide Act, 1968.4. Legitimacy of confiscation and penalties imposed.Issue-wise Detailed Analysis:1. Classification of Boric Acid under the Customs Tariff:The primary issue was whether Boric Acid should be classified under CTH 2810, which is freely importable, or under CTH 38081099 as an insecticide. The appellant argued that Boric Acid is specifically covered under CTH 2810, which aligns with the ITC (HS) and is freely importable. The Tribunal referenced a previous decision in the case of Hardware Trading Corporation, which concluded that Boric Acid falls under Heading 28.10 of the Customs Tariff/Excise Tariff/ITC-HS as it specifically covers Boric Acid by description. The Tribunal emphasized that Boric Acid is predominantly used as a raw material in various industries and not exclusively as an insecticide, thus supporting its classification under CTH 2810.2. Applicability of Circular No. 61/2004 dated 28.10.2004:The appellant contended that the Circular No. 61/2004, which classified Boric Acid under Heading 38.08 as an insecticide, was not applicable since the goods were shipped before the circular's issuance. The Tribunal noted that the circular is not binding if it contradicts the Customs Tariff Act. The Tribunal found that the circular was improperly applied retroactively and that Boric Acid should be classified based on the prevailing ITC (HS) at the time of import, which listed it under CTH 2810.3. Requirement of registration under the Insecticide Act, 1968:The Tribunal examined whether the import of Boric Acid required registration under the Insecticide Act, 1968. The appellant argued that at the time of import, there was no requirement for such a certificate. The Tribunal referred to the minutes of a Registration Committee meeting, which clarified that Boric Acid for non-insecticidal use does not require registration under the Insecticide Act. The Tribunal concluded that since the imports were made by traders and there was no evidence of the Boric Acid being used for insecticidal purposes, registration was not necessary.4. Legitimacy of confiscation and penalties imposed:The Tribunal evaluated the legitimacy of the confiscation and penalties imposed on the appellant. Given that Boric Acid was correctly classified under CTH 2810 and did not require registration under the Insecticide Act for non-insecticidal use, the Tribunal held that the confiscation and penalties were unjustified. The Tribunal ruled that the confiscation and penalties could not be sustained and allowed the appeal, setting aside the impugned order.Conclusion:The Tribunal concluded that Boric Acid should be classified under CTH 2810, which is freely importable, and that the Circular No. 61/2004 was inapplicable to the appellant's case. The requirement for registration under the Insecticide Act, 1968, did not apply as the Boric Acid was not used for insecticidal purposes. Consequently, the confiscation and penalties imposed were deemed unsustainable, and the appeal was allowed with consequential reliefs.