TaxTMI 
TaxTMI 
2019 (3) TMI 524
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.... demand raised against Less Charge Notice u/s 28 of The Customs Act 1962 in r/o B/E Nos 712883 dated 28.06.2010, 782726 dated 09.08.2010, 839012 dated 14.09.2010 and 879495 dated 05.10.2010 in all amounting Rs. 18,68,062/- (Rupee Eighteen Lacs Sixty Eight Thousand and Sixty Two only), issued vide this office letter No 5/26-Misc- 951/10 Gr III dated 21.12.2010. This order is issued without any pre-judice to any other action that may be taken against the importer as per provisions of Customs Act,1962 or any other law for the time in the Republic of India." 2.1 Appellants had filed Bill of Entries as indicated in table 1, claiming the classification of goods imported by them under heading 5201. Bill of Entry Description of Goods Classification Claimed Number Date 712883 28.06.2010 Kapok Prime No 1 (Raw Cotton) 5201 Kapok Super Fine Grade 1 (Raw Cotton) 5201 782726 09.08.2010 Kapok Prime No 1 (Raw Cotton) 5201 Kapok Super Fine Grade 1 (Raw Cotton) 5201 839012 14.09.2010 Kapok Prime No 1 (Raw Cotton) 5201 Kapok Super Fine Grade 1 (Raw Cotton) 5201 879495 15.10.2010 Kapok Prime No 1 (Raw Cotton) 5201 ....
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....ll include all varieties of Cotton. Adjudicating Authority has in his order relying on technical dictionary/ literature concluded that Java Cotton is a variety of Cotton, but has held that cotton obtained from plant family Gossypium alone can be classified under heading 5201. c. Classification has to be made adopting common parlance test. They have sold the imported goods to Defence Ministry Government of India as cotton only. d. Relying on technical literature they stated that both Kapok and Gossypium are from Malvaceae family, thus the conclusion of Adjudicating Authority causing a distinction between the two is not correct. Heading 5201 is wide enough to cover all varieties of cotton. Bombay High Court has in case Agarwal & Co [1983 (12) ELT 116 (Bom)] held that "Milk" include "milk powder" also. e. They had made written submissions before the adjudicating authority which have not been considered. Also they had cleared the goods on payment of duty under protest to avoid demurrage charges. f. Commissioner (Appeal) stating that earlier "Kapok" cotton being classifiable under Chapter 14, will remain classifiable under same chapter will not be correct as heading 1402 was....
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....ding and discussion should not go beyond the scope and grounds of the show cause notice. v. Supreme Court has in following cases held that SCN is the foundation of the case and department cannot go beyond the SCN a. SACI Allied Products [2005 (183) ELT 225 (SC)] b. Suresh Synthetics [2007 (216) ELT 662 (SC)] c. Ballarpur Industries {2007 (215) ELT 489 (SC)] d. Gujarat State Fertilizer Co [1997 (91) ELT 3 (SC)] e. Caprihans India [2015 (325) ELT 632 (SC)] f. Gammon Far Chems [2002 (152) ELT 28 9SC)] g. Chamdany Industries [2009 (241) ELT 481 (SC)] h. Caprihans India [2002 (1450 ELT 664 (T)] approved in [2008 (226) ELT 18 (SC)] 4.3 Learned Authorized Representative, submitted - i. In their reply to show cause notice at para 10 (page 36 of Appeal No C/446/12) appellants have submitted "A perusal of the above description in HSN shows that the fibers obtained from vegetable material which, when raw or in other form fall under Chapter 4. (In particular Kapok is classified here only when they have given under term indicating their use as textile material)" ii. In their Appeal Memo filed before Commissioner....
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....sified as per the market and trade under-standing of the goods. In the present case the goods have been imported by the appellants for being supplied to Ministry of Defence and not for sale in local market. These goods have been supplied as "Cotton" to the Ministry Of Defence. Even the overseas supplier has also clarified that the goods supplied by them were "Kapok Fiber (Java Kapok) was prime grade and super fine quality but not carded or combed." 5.4 Appellants have claimed the classification of goods under heading 5201 whereas after issuance of notice learned adjudicating authority decided the classification under heading 5305. For ease of reference the said Chapter headings are reproduced below: Chapter 52 Cotton 5201 COTTON, NOT CARDED OR COMBED 5201 00 - Cotton, not carded or combed : --- Indian cotton : 5201 00 11 ---- Bengal deshi 5201 00 12 ---- Indian cotton of staple lengths 20.5 mm (25/32") and below (e. g. oomras, yellow picking, Assam comillas) 5201 00 13 ---- Indian cotton of staple length exceeding 20.5mm (26/32") but not exceeding 24.5mm (30/32") 5201 00 14 ---- Indian cotton of s....
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....n XI : vegetable materials or fibres of vegetable materials of a kind used primarily in the manufacture of textiles, however prepared, or other vegetable materials which have undergone treatment so as to render them suitable for use only as textile materials. 1401 VEGETABLE MATERIALS OF A KIND USED PRIMARILY FOR PLAITING (FOR EXAMPLE, BAMBOOS, RATTANS, REEDS, RUSHES, OSIER, RAFFIA, CLEANED, BLEACHED OR DYED CEREAL STRAW, AND LIME BARK) 1402 Omitted 1403 Omitted 1404 VEGETABLE PRODUCTS NOT ELSEWHERE SPECIFIED OR INCLUDED 5.5 Commissioner has upheld the classification of the imported goods under heading 1404, by totally ignoring the chapter note 1 to Chapter 14, reproduced above. From the said Chapter Note, it is quite evident that "vegetable materials or fibres of vegetable materials of a kind used primarily in the manufacture of textiles", get classified in Section XI. Commissioner (Appeal) has in his order not rendered any finding to this effect that the goods under importation were other than of a kind used primarily in the manufacture of textiles. On the contrary, Adjudicating Authority has in his order in para 9 recorded as follows: "9. ......On th....