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of <h1>Classification of 'Maize Starch' under SION Entry E22 upheld, Customs Act jurisdiction questioned</h1> <h3>Sanstar Bio Polymers Ltd and Sambhav Chowdhary Versus C.C. -Mundra</h3> Sanstar Bio Polymers Ltd and Sambhav Chowdhary Versus C.C. -Mundra - TMI Issues Involved:1. Correctness of classification of 'Maize (Corn) Starch' under SION Entry E22 or E76 for DFIA benefits.2. Jurisdiction of customs to demand duty under Section 28AAA of the Customs Act, 1962.Issue-wise Detailed Analysis:1. Correctness of Classification of 'Maize (Corn) Starch':The appellant, engaged in manufacturing various starch products, exported 'Liquid Glucose Concentrate (Food Grade)' under DFIA, declaring 'Maize (Corn) Starch' as the import item. The department contended that the actual raw material used was 'Maize,' not 'Maize Starch,' and thus the correct SION Entry should be E76, not E22.The appellant argued that liquid glucose concentrate is manufactured from starch slurry, which is chemically equivalent to starch powder, and hence, SION Entry E22 was applicable. They relied on definitions under FTP 2015-20 and case laws supporting the concept of immediate parentage in manufacturing processes.The Tribunal noted that both SION Entries E22 and E76 cover liquid glucose, with E22 specifying starch and E76 specifying maize. The appellant used starch slurry as the immediate input, making starch the relevant input under E22. The Tribunal observed that subsequent deletion of E22 by DGFT indicated earlier eligibility under both entries. The Tribunal emphasized that opting for a beneficial entry does not constitute mis-declaration, supported by judgments in Share Medical Care v. UOI and CCE, Bhopal v. Minwool Rock Fibres Ltd.The Tribunal concluded that 'Maize (Corn) Starch' was correctly classified under SION E22, as starch slurry was the immediate parent material used in manufacturing the export product.2. Jurisdiction of Customs to Demand Duty under Section 28AAA:The Tribunal examined the validity of DFIA licenses granted by DGFT, noting that none were canceled or suspended. It emphasized that DGFT, as the competent authority, had not disputed the classification under E22. The Tribunal cited Titan Medical Systems Pvt Ltd v. Collector of Customs, New Delhi, asserting that customs cannot refuse exemption if the licensing authority has not questioned the license.The Tribunal referred to Axiom Cordages Ltd v. CC, Nhava Sheva - II, highlighting that Section 28AAA applies only if licenses were obtained through collusion, wilful misstatement, or suppression of facts. Without DGFT's action against the appellant, customs lacked jurisdiction to invoke Section 28AAA.The Tribunal further noted that export benefit schemes fall under the jurisdiction of DGFT, not customs, and that the finality of shipping bill assessments precludes subsequent questioning by customs.Conclusion:The Tribunal set aside the impugned order, allowing the appeals with consequential relief, as the appellant correctly classified the input under SION E22, and customs lacked jurisdiction to demand duty under Section 28AAA.
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