2024 (5) TMI 1349 - AT - Customs

Commissioner improperly classified imported enterogermina without following General Rules for Interpretation under Customs Tariff Act 1975

CESTAT Mumbai held that the Commissioner of Customs (Import) improperly classified imported enterogermina (bacillus clausal spores) without following the ... Legality and propriety of the classification adopted by Commissioner of Customs (Import) - Imports ‘enterogermina (bacillus clausal spores)’ - benefit of notification no. 12/2012-Cus - confiscation - Penalty - correctness of the appellant's claim for classification under declared heading - Appellant herein and proceeding straight thereafter to ‘tariff item level’ by ignoring the General Rules for Interpretation of the Import Tariff which sets out the exercise as one of hierarchical elimination from heading onwards. HELD THAT:- The General Rules for Interpretation of the Import Tariff appended to Customs Tariff Act, 1975 is the foundation of both classification and re-classification with the latter devolving onus on the ‘proper officer’, without comparability as an option until after the appropriateness of the proposed tariff item has passed muster in accordance with rule 1 therein, with the terms of engagement in any dispute on classification settled by the Hon’ble Supreme Court, in Hindustan Ferodo Ltd v. Collector of Central Excise [1996 (12) TMI 49 - SUPREME COURT]. It would, therefore, appear that the impugned order has revised the classification without proper application of law as enacted and judicially determined. Accordingly, it would be appropriate for revision of classification be set side and the matter remanded to the original authority for a fresh decision after consideration of the relevant facts and in strict compliance with the General Rules for Interpretation of Import Tariff. In conclusion, the appellate tribunal allowed the appeal of the assessee by way of remand, while dismissing the appeal of the jurisdictional Commissioner of Customs. Issues Involved:The legality and propriety of the classification adopted by Commissioner of Customs regarding import of goods, appeal by jurisdictional Commissioner of Customs regarding fine in lieu of confiscation, correctness of the appellant's claim for classification under declared heading.Classification Issue:The appeal by M/s Sanofi Synthelabo India Pvt Ltd concerns the classification adopted by the Commissioner of Customs regarding the import of 'enterogermina (bacillus clausal spores)'. The appellant claimed conformity with a specific tariff item but the adjudicating authority opined that the goods were more appropriately classified under a different tariff item. This led to the denial of eligibility for a notification and the imposition of differential duty, interest, and penalty under the Customs Act, 1962. The issue was whether the classification was properly set aside without establishing the availability of a more appropriate heading for the goods.Legal Grounds for Appeal:The decision of the Hon'ble High Court of Bombay in a previous case established that fine in lieu of confiscation under section 125 of the Customs Act, 1962 is contingent upon goods being physically amenable for vesting with the Central Government. As a result, the appeal by the jurisdictional Commissioner of Customs had no legal ground for being sustained.Proper Application of Law:The General Rules for Interpretation of the Import Tariff play a crucial role in classification and re-classification of goods. The impugned order revised the classification without proper application of these rules, leading to the conclusion that the matter should be remanded to the original authority for a fresh decision in compliance with the relevant legal framework.Judicial Precedents:The burden of proof in classification matters lies squarely upon the Revenue department. If the department intends to classify goods differently from the claim made by the assessee, they must adduce proper evidence to discharge this burden. Failure to do so can result in the appeal being allowed, as seen in previous judicial determinations.In conclusion, the appellate tribunal allowed the appeal of the assessee by way of remand, while dismissing the appeal of the jurisdictional Commissioner of Customs. The classification issue was deemed to require a fresh decision in accordance with the General Rules for Interpretation of Import Tariff.