Sweet Pearl P200 correctly classified under CTH 29054900, Revenue's reclassification under CTH 21069060 rejected due to insufficient proof

The CESTAT Chennai upheld the appellant's classification of Sweet Pearl P200 under CTH 29054900, rejecting Revenue's reclassification under CTH 21069060. The tribunal found Revenue failed to meet its burden of proof when challenging the importer's declared classification, despite obtaining expert opinions from EIA and Central Food Laboratory that were not properly considered. The court noted the appellant had consistently classified similar goods under the same tariff heading since 2004. Revenue's contention that the goods qualified as food flavouring material under CTH 2106 lacked adequate justification regarding flavour enhancer properties. The impugned order was set aside with consequential benefits. Revenue's cross-appeal for penalty under Section 114A was dismissed as the underlying duty demand was overturned.

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Issues Involved:
Classification of imported goods under Tariff Item 29054900 by the appellant disputed by Revenue, reclassification under Tariff Item 21069060 demanded, differential duty demand imposed, burden of proof on Revenue to justify reclassification, appeal filed challenging the Order in Original.

Summary:

The appeal was filed by the importer-appellant against the Order in Original passed by the Commissioner of Customs (Seaport - Import), Chennai, disputing the classification of imported goods under Tariff Item 29054900. The Revenue sought opinions from Expert Inspection Agency (EIA) and Central Food Laboratory, Mysore, but failed to consider them in the impugned order. The appellant argued that the burden is on the Revenue to disprove their classification and justify reclassification under Tariff Item 21069060, citing legal precedents. The appellant contended that the goods should be classified under Chapter 29 as they contain Maltitol, supported by an expert opinion from CFL/CFTRI, Mysore. The Revenue's case that the goods are artificial sweetener and food flavouring material under CTH 2106 was not adequately supported in the impugned order.

The Tribunal found that the Revenue did not establish its case for reclassification, and upheld the appellant's classification under Tariff Item 29054900. Citing a previous decision, the Tribunal emphasized that if goods are not classifiable under the proposed chapter heading by the Revenue, the case of the department will fail. As the Revenue failed to discharge the burden of proof, the classification declared by the appellant was upheld, and the impugned order was set aside with consequential benefits. The Revenue's appeal for imposing equal penalty under sec. 114A of the Customs Act, 1962 was dismissed due to the setting aside of the duty demand.

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