Imported branded nutrition supplements liable to 18% IGST under residuary entry, not 28% protein concentrate rate

CESTAT Ahmedabad held that imported branded nutrition/dietary supplements are liable to IGST at 18% under residuary entry Sr.No.453 of Schedule III, not 28% under Sr.No.9 of Schedule IV. The tribunal found no suppression of facts as the dispute concerned only tax rate interpretation, making the entire demand time-barred. The goods did not qualify as "protein concentrates and textured protein substances" specified in Sr.No.9, thus falling under the residuary provision. The appeal was allowed and the impugned order set aside.

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Issues Involved:
1. Classification of imported goods for IGST rate.
2. Jurisdiction of Customs Officers to decide IGST rate.
3. Time-barred demand.

Summary:

1. Classification of Imported Goods for IGST Rate:
The core issue was whether the appellant's imported dietary supplements fell under Sr. No. 9 of Schedule IV (28% IGST) or Sr. No. 453 of Schedule III (18% IGST) of IGST Notification No. 01/2017. The appellant argued that their goods did not fit the description under Sr. No. 9, which is restricted to "Protein concentrates and textured protein substances" and other specific items. The Tribunal noted that the description under Sr. No. 9 is specific due to the use of "i.e." and concluded that the appellant's goods did not fall under this category. Therefore, the correct classification was under Sr. No. 453 of Schedule III, attracting 18% IGST. This conclusion was supported by previous Tribunal decisions, including Neuvera Wellness Venture P. Ltd. v. C.C., Mundra 2023 (10) TMI 964.

2. Jurisdiction of Customs Officers to Decide IGST Rate:
The appellant contended that Customs Officers lacked jurisdiction to decide the IGST rate, citing judgments such as Ortho Clinical Diagnostics India Pvt Ltd. v. Commissioner Of Customs (Import), Mumbai 2022 (9) TMI 1109 and IFB Industries Limited v. Commissioner Of Customs (Ns-V) 2023 (8) TMI 1244. The Tribunal did not explicitly address this jurisdictional argument in the final decision but focused on the correct classification and rate of IGST.

3. Time-Barred Demand:
The appellant argued that the demand was time-barred as there was no mis-declaration or suppression of facts. The Tribunal agreed, noting that the dispute was solely about the applicable IGST rate and that all relevant data were available at the time of assessment. The Tribunal held that the demand was time-barred and noted the principle of revenue neutrality, as any IGST paid would be available as input tax credit to the appellant.

Conclusion:
The Tribunal set aside the impugned order, concluding that the appellant's goods were correctly classified under Sr. No. 453 of Schedule III, attracting 18% IGST, and that the demand was time-barred. The appeal was allowed.

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