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of <h1>CESTAT remands customs classification dispute over cement additives due to inadequate examination by lower authorities</h1> CESTAT Mumbai-AT allowed appeals by remand in a customs classification dispute involving imported cement additives. The tribunal found that lower ... Classification of imported goods - Import of ‘prepared additives for cements, mortars or concretes’ - classification defect owing to which differential duty was ordered for recovery - General Rules for Interpretation of Import Tariff - HELD THAT:- Though the first appellate authority had affirmed the classification against tariff item 3505 1090 of First Schedule to Customs Tariff Act, 1975, it would again appear that the finding therein was devoid of any support to indicate that the goods are ‘other modified starches’ or other than ‘dextrins’ with the sub-heading. On the other hand, the claim of the appellant herein that the product is exclusively used as additives to cement and mortar and, therefore, appropriately classifiable within heading 3824 of First Schedule to Customs Tariff Act, 1975 has not been examined at all A plain understanding of the enumeration in the said heading makes it abundantly clear that it is not intended as a residuary but also one in which the specific description outweigh any other less specific description in terms of rule 3 of General Rules for Interpretation of the Import Tariff appended to Customs Tariff Act, 1975. There is no doubt that the show cause notice had proposed to alter the classification but only at sub-heading level. Notwithstanding that, it was obligatory, and indeed acceptable, to isolate the relevant tariff item within such classification with appropriate justification. Neither is there any such justification nor indeed, as pointed out supra, has the Commissioner of Customs narrowed down the classification at the tariff item level. In view of this, assessment under section 17, and recovery under section 28, of Customs Act, 1962 required to be re-determined. Needless to say such determination should be comprehensive and not by mere reliance on a few isolated expressions deployed in the test report or technical literature or information at the public domain. In order to this may be carried out, we set aside the impugned orders and restore the notices back to the respective original authorities for fresh adjudication. Appeals are, thus, allowed by way of remand. Issues: Classification of imported goods under Customs Tariff Act, 1975Issue 1: Classification of imported goods under Customs Tariff Act, 1975The judgment involves the classification dispute concerning the import of 'opagel CMT (cement mortar additive)' by M/s Prakash International. The dispute arose from the declaration of goods valued at &8377; 40,33,463, which were proposed to be classified under tariff item 3824 4090. The authorities proposed re-classification under sub-heading 3505 10 due to the presence of 'starch' and technical literature from the manufacturer's website. The original authority ordered recovery of differential duty and confiscation under the Customs Act, 1962, which was challenged before the Commissioner of Customs (Appeals) and affirmed. The issue revolved around the classification between heading 3824 and heading 3505 of the Customs Tariff Act, 1975.Issue 2: Adjudication process and burden of proofThe judgment highlighted the failure of the adjudication process to meet the legal standards as set by the General Rules for Interpretation of Import Tariff and judicial precedents. The customs authorities classified the goods under heading 3505, emphasizing the nature of starches without proper evidence or expert opinion. The Commissioner of Customs did not go beyond the six-digit level of classification, which was deemed incorrect. The burden of proof in classification matters lies with the revenue department, as emphasized in previous court decisions, and the authorities failed to discharge this burden adequately.Issue 3: Applicability of specific tariff headingsThe appellant contended that the imported product, used as additives for cement and mortar, should be classified under heading 3824 of the Customs Tariff Act, 1975. This heading pertains to 'prepared additives for cements, mortars, or concretes' and falls under the residuary category. The judgment noted that the specific description within heading 3824 outweighed the less specific description under heading 3505. The authorities did not examine the classification under heading 3824 adequately, and the usage of the goods as additives was not countered with technical information or laboratory analysis.Issue 4: Re-determination and fresh adjudicationThe judgment concluded by setting aside the impugned orders and remanding the appeals for fresh adjudication. It emphasized the need for a comprehensive re-determination of the assessment and recovery under the Customs Act, 1962. The authorities were instructed to provide proper justification at the tariff item level and not rely solely on isolated expressions from test reports or technical literature. The decision aimed to ensure a thorough and lawful classification process in accordance with the Customs Tariff Act, 1975.This detailed analysis of the judgment provides insights into the classification dispute, the adjudication process, the burden of proof, and the specific tariff headings under the Customs Tariff Act, 1975. The decision underscores the importance of a comprehensive and legally sound classification process in customs matters.
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