AJI-NO-MOTO goods classified under CTH 2106 9060 not CTH 3824 9900, exemption denied but extended limitation period rejected

The CESTAT Chennai held that imported AJI-NO-MOTO goods were correctly classifiable under CTH 2106 9060 rather than CTH 3824 9900, making them ineligible for exemption under Notification 46/2011. The differential duty demand was upheld. However, the extended period of limitation was rejected as the importer's classification claim did not constitute suppression of facts, given that 68 similar bills of entry were previously cleared by the department from 2017-2022. The demand was limited to the normal period with applicable interest, while penalties and fines were set aside.

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Issues Involved: Classification of imported goods, eligibility for customs duty exemption, invocation of extended period for demand, and imposition of penalty and fine.

Summary:

1. Classification of Imported Goods:
The main dispute centered on whether the imported product "Ajitide" should be classified under CTH 3824 9900 as a miscellaneous chemical product or under CTH 2106 9060 as a food flavoring material. The appellant argued that Ajitide is a chemical mixture not meant for direct human consumption and should be classified under CTH 3824 9900. The Revenue contended that Ajitide is a flavoring material used in food preparation, thus classifiable under CTH 2106 9060. The Tribunal concluded that Ajitide, which enhances the umami taste and flavor of food, is more appropriately classified under CTH 2106 9060 as a food flavoring material.

2. Eligibility for Customs Duty Exemption:
The appellant claimed a basic customs duty exemption u/s Notification No. 46/2011. Since the Tribunal upheld the classification of Ajitide under CTH 2106 9060, the goods were found ineligible for the exemption under the said notification.

3. Invocation of Extended Period for Demand:
The Revenue invoked the extended period u/s 28(4) of the Customs Act, 1962, alleging suppression of facts by the appellant. The Tribunal noted that previous consignments were cleared under the same classification without objection from the customs department. It was held that mere claiming of exemption or a particular classification does not amount to suppression. Therefore, the demand was limited to the normal period, and the extended period was not justified.

4. Imposition of Penalty and Fine:
The Tribunal found that the appellant's actions did not amount to suppression or mis-declaration warranting a penalty. Consequently, the penalty and fine imposed under sec. 114A of the Customs Act, 1962, were set aside. It was also noted that no redemption fine could be imposed once the goods were cleared by Customs.

Conclusion:
The impugned order was upheld regarding the denial of the claim for exemption from duty. However, the demand was limited to the normal period along with applicable interest, and the penalty and fine were set aside. The appellant was granted consequential relief as per law. The appeal was disposed of accordingly.

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