TaxTMI 
TaxTMI 
2016 (3) TMI 295
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....eport dt. 27.11.2009 revealed the content of Oxymatrine of 0.41% and it was certified that declared content of 0.36% to be treated as "Pesticides" rather than fertilizer. Detailed investigations were carried out and statements were recorded. Accordingly, show cause notice dt.6.5.2010 was issued to the appellant proposing rejection of classification of goods as"Plant Bio Fertilizer", and for reclassifying the goods as "Pesticides" under CTH 38089910. The notice also demanded differential duty on the past consignments covering 16 Bills of Entry. SCN proposed for confiscation under Section 111 (d), (m) and (o) of Customs Act and also proposed for penalty under Section 112(a)/114A/14AA both on the appellant as well as on Shri Rajwant Singh, Managing Director of the appellant-company. The adjudicating authority after following the principles of natural justice in the impugned order rejected the classification of the imported goods under CTH 31010099 and reclassified the goods under CTH 38089910 and ordered for confiscation of 16,000 Kgs of seized goods covered under live Bill of Entry No.331475 dt. 12.10.2009 and allowed for re-export of goods imported under B/E No.331475 dt.12.10.20....
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..... As per the analysis report accompanied, it was clearly shown Oxymatrine content of 0.36%. 5. He further submits that regarding goods covered under live Bill of Entry No.331475 dt.12.10.2009 where the samples were drawn again in Nov 2009 and sent for testing to private lab and got tested. As per the test report dt. 27.11.2009 (available at page 159 of PB) issued by M/s. Inspectorate Griffith India Pvt.Ltd. the sample was found to contain Oxymatrine content of 0.41%. In addition to that, sample also contained Nitrogen, Phosphorous content also conforms the composition list of the exporter. The test report opined that the declared content of 0.36% of Oxymatrine is to be treated as "Pesticides rather than Fertilizer". For the live consignment, he admits the classification of the goods as Pesticides under chapter 38 as per Honble Supreme Court decision in the case of UOI Vs Pesticides Mfg. & Formulators Association of India - 2002 (146) ELT 19 (SC). He submits that they are only contesting the demand confirmed for the past clearance and the live Bill of Entry dt.12.10.09. He drew our attention to Note (6) of Chapter 31 wherein it is explained that for the purpose of Heading 31.0....
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....(129) ELT 737 (Tri.-Del.) He further submits that section 111 (d) cannot be invoked for live Bill of Entry where the appellants have not cleared the goods as pesticides but already paid the customs duty of Rs. 9,74,961/- as Bio-fertiliser and abandoned the goods and they have not re-exported the goods as ordered by the Commissioner. Therefore, redemption fine and penalty are not imposable. He submits that department relying on e-mail dt. 6.11.2009 for alleged misdeclaration is not correct as the e-mail which they have sent on 6.11.09 is only to inform the supplier about the test results of the live B/E and appraising the supplier of the department's stand for classifying the goods as "pesticides" under Chapter 38. He also submits that appellants are not liable for penalty under Section 114A and 114AA penalty for the past consignments. Notwithstanding, he admits that if at all penalty is imposable, it is only in respect of live consignments covered under Bill of Entry No.331475 dt. 12.10.2009, section 112 penalty can be imposed. For the live Bill of Entry, they have already paid differential duty of Rs. 9,74,261/- as Bio-Fertilizer and already predeposited Rs. 15 lakhs as per t....
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....e liable to confiscation under Sections 111 (d), (m) and (o) of the Customs Act, 1962 read with Section 3 (3) of the Foreign Trade (Development and Regulation) Act 1992 and Section 17 of the Insecticides Act, 1968 (3) Whether duty amounting to Rs. 70,96,885/- is liable to be recovered from M/s.Penshibao Wong, Bangalore under proviso to Section 28 (1) of the Customs Act, 1962, along with interest payable under Section 28 (AB) on the imported goods cleared by them under the aforesaid 16 past Bills of Entry by invoking the larger period of limitation is hit by limitation and whether penalty imposed under Section 114/114A is sustainable. 9. We propose to discuss the live consignment covered under B/E No.331475 dt. 12.10.2009. (i) The facts as set out in the preceding paragraphs shows that the appellant imported 16000 Kgs. of goods declared as "Bio-Fertilizer" under said Bill of Entry and the samples were drawn and sent for testing to private laboratory. As per test report the goods were found to contain "Oxymatrine" 0.41 % and in addition, it also contained Nitrogen and Phosphorous and other minerals and conformed the certificate of composition list of the supplier....
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....s Rs. 67,47,325/-, the adjudicating authority has imposed lesser penalty. We do not see any justification in waiver or reduction of penalty. Therefore, we uphold the penalty of Rs. 2,50,000/-each (Rupees two lakhs fifty thousand only) imposed on the importer and its Managing Partner, Shri Rajwant Singh. Impugned order to this extent is upheld. 10. We now proceed to discuss the demand confirmed on the past clearances under 16 Bills of Entries which is contested by the appellant both on merits and on limitation. On perusal of records, copy of Bill of Entry No.268877 dt. 23.7.2009 annexed at page 144 of the paper book and the corresponding invoice No.00241428 dt. 1.6.2009 and the composition list at page 142 & 143, it is noticed that the appellants have declared their goods in the Bill of Entry as Plant Bio-Fertilizer as per the invoice, classified the goods under Chapter Heading 31010099 of the CTH, the Department assessed the Bill of Entry and the samples were drawn and tested by CRCL and as per Test Report the goods were allowed clearance as Bio-Fertilizer. The CRCL Test report dt. 31.3.2005 (annexed at page 160) signed by the Chemical Examiner, CRCL, Custom House in respect o....
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....ave suppressed the facts or misdeclared the goods merely based on the report of live consignment. Therefore, we are of the considered view that the charge of misdeclaration/suppression with intention to evade customs duty is not sustainable. 11. Further, we find that the entire proceedings initiated by the Customs for the past clearances which is purely based on the test report of the live consignment covered under B/E No.331475 dt. 12.10.2009. We find that the adjudicating authority has considered only the remarks given in the said test report for the live consignment. The Customs Laboratory test reports for the past consignments confirming the goods as "Bio-Fertilizer" is valid for the said imports and in the absence of any contrary report evidence against the CRCL report, the adjudicating authoritys finding that the past consignments were only "Pesticides" not "Fertilizers" is beyond acceptance and not in conformity with the law. 12. In this regard, we find from the technical literature of Wikipedia Encyclopaedia in respect of source material Plant "Sophora Flavescens", the origin, medicinal properties and the usage has been described. The extract of the root contains var....
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.... clearly, correctly and fully declared in the Bill of Entry and accompanying certificate by the assessee. Availability of exemption with respect of the goods declared was a belief held in the mind of importer. Further the other part of the said certificate that the imported items were for supply for Defence purposes also was found to be correct on facts as batteries manufactured from the imported materials were supplied to M/s. HAL. There was no misdeclaration or suppression with intent to evade duty merely because the exemption claimed was found to be inadmissible by Customs later or for the allegation that the said certificate was a forged one. Customs authorities should have checked its admissibility in time. As such the extended period was not invocable and the demand issued after 3 years was held to be time-barred. The ratio of the above Supreme Court judgement is squarely applicable to the present case as the goods imported in the past were correctly and fully declared in the Bill of Entries as per the invoice and as per the analysis certificate of the supplier which is confirmed by the CRCL test report and there is no misdeclaration or suppression with intent to evade dut....