TaxTMI 
TaxTMI 
2020 (2) TMI 1262
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....>Mr. S.K. Mohanty, Member (Judicial) and Mr. P. Anjani Kumar, Member (Technical) Shri K. M. Mondal, Special Counsel along with Shri R.K. Dwivedy, Authorized Representative for the Appellant Revenue Shri V. Sridharan, Sr. Advocate with Shri Prakash Shaha, Shri J.C. Patel, Ms. Anveshika Singh, Ms. Heena Jain & Shri N.D. George, Advocates for the Respondent Assessee ORDER The issue involved in all the appeals is about the eligibility of import of Cocoa powder against Duty Free Import Authorisations (DFIA) by various appellants. In the instant case, most of the appeals are by the Revenue against the dropping of the issue against various importer traders by the lower adjudicating authority on the basis of decision of tribunal in the case of C.C., Mangalore Vs. Kushalchand& Co which was subsequently upheld by Apex Court 2015 (325) ELT 813 (S.C.). InIn the present set of appeals, all other importers (other than M/s Ravi Foods Pvt Ltd who is a manufacturer exporter) are only traders and have imported various consignments of 'Cocoa Powder' against the export product 'Biscuits' under the transferred DFIAs. 2. M/s. Ravi Foods Pvt Ltd are manufacturer-exporter of Biscuits & othe....
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....imposing penalty of Rs. 25,00,000 on M/s. Ravi Foods, Rs. 20,00,000/- on Shri Ramesh Agarwal, Rs. 10,00,000on Shri Subba Rao and Rs. 10,00,000 on the CHA M/s. P.B. Shipping & Agency Pvt Ltd. u/s. 112(a) of the Customs Act, 1962. Appeals filed by different parties are as follows. Sr. No. Appeal No. Appellant Respondent OIO 1. C/MISC/86570/2018 C/STAY/93218/2017 IN APPEAL NO.C/87944/2017 CC EP (Mumbai) M/s. Morde Foods Pvt Ltd 55/2016-17/ 31/03/2017 2. C/MISC/86514/2018 C/STAY/93219/2017 IN APPEAL NO.C/87945/2017 -do- M/s. Global Exim 56/2016-17/ 31/03/2017 3. C/MISC/86513/2018 C/STAY/93222/2017 IN APPEAL NO.C/87949/2017 -do- M/s. Kamala International 54/2016-17/ 31/03/2017 4. C/MISC/86543/2018 C/STAY/93236/2017 IN APPEAL NO.C/87953/2017 M/s. Uni Collids Impex Pvt Ltd. 58/2016-17/ 31/03/2017 5. C/MISC/86515/2018 C/STAY/93239/2017 IN APPEAL NO.C/87973/2017 M/s. Global Exim (FSL Foods India Pvt Ltd) 51/2016-17/ 31/03/2017 6. C/MISC/86518/2018 C/STAY/93243/2017 IN APPEAL NO.C/879....
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.... M/s.Simandhar Shipping Services Global Exim 56/2016-17/ 31/3/2017 24 C/STAY/93253/2017 IN APPEAL NO.C/87991/2017 -do- Ramesh Kumar Agarwal 54/2016-17/ 31/03/2017 25 C/STAY/93254/2017 IN APPEAL NO.C/87992/2017 -do- Kamala International 54/2016-17/ 31/03/2017 26 C/STAY/93255/2017 IN APPEAL NO.C/87994/2017 -do- M/s. Kamala International 54/2016-17/ 31/03/2017 27 C/STAY/93256/2017 IN APPEAL NO.C/87997/2017 -do- M/s. PB Shipping Agency Pvt Ltd 54/2016-17/ 31/03/2017 28 C/STAY/93257/2017 IN APPEAL NO.C/88001/2017 -do- M/s.Kwick Vargo Tracers and Lifters 54/2016-17/ 31/03/2017 29 C/CROSS/91136/2017 IN APPEAL NO.C/86657/2017 Ramesh Kumar Agarwal CC (EXPORT-I) Mumbai 52/2017/ 27/03/2017 30 C/CROSS/91135/2017 IN APPEAL NO.C/86658/2017 Mr. G U S R S Subbarao CC (EXPORT-I) Mumbai 52/2017/ 27/03/2017 31 C/EH/92628/2017 C/CROSS/91137/2017 IN APPEAL NO.C/86741/2017 M/s. Ravi Foods Pvt.Ltd CC (EXPORT-I) Mumbai 52/2017/ 27....
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....d a written brief dated 1-10-2019 incorporating the arguments on the part of all other appellants while giving reply to the same. Crux of his arguments is that (i). 'Maida, Atta and Flour' are covered by chapter 11, while 'Cocoa Powder' is covered by chapter 18 of the Central Excise Tariff Act, 1985. (ii). Regulations of the Food Safety & Standards (Food Products Standards & Food Additives) Regulations, 2011 and Guidance Notes of the Bread and Flour Regulations, 1998 define atta/Maida/Flour/Cocoa Powder separately. (iii). Dr. U.S. Annapure, Associate Professor of Food Chemistry, ICT, Matunga, in his opinion dated 21/10/2013, stated, inter alia, that "Cocoa Powder" cannot be used in place of Flour in making of Biscuits; in biscuits the main ingredient is Wheat Flour and Cocoa Powder can be used as a Flavouring Ingredient". (iv). the term 'Flour' appears in the company of Maida and Atta. It means Atta, Maida and Flour are of the same class by application of the principles of 'ejusdem generis' or 'noscitur a socciis'. (v). for the 1st time the DGFT, vide Public Notice No. 93 (RE-2010)/2009-14 dated 1/2/2012, permitted duty free import of 09....
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....o 40/2006-Cus dated 1/5/2006 & Notification No 98/2009-Cus dated 11/9/2009 to correspond to the same. Taking help of Technical Books and Literature, Learned Counsels for different appellants have submitted that going by technical literature, 'Cocoa Powder' qualifies to be the same as 'flour' and hence, duty free import of the same is permissible against the transferred DFIAs; they also rely on Tribunal decision in the case of Kushalchand upheld by the Hon'ble Apex Court ( supra). Per Contra, Learned Special Counsel for the Revenue submits that 'Cocoa Powder' and 'Maida/Atta/flour' are different commodities and distinctly known in the market as well as trade parlance; where as in the Licences issued 'Maida/Atta/Flour' fall under Chapter 11of the Central Excise Tariff Act, 1985, while 'Cocoa Powder' falls under chapter 18 ibid. 7. We find, as submitted by Special Counsel, that though 'Maida, Atta, Flour and Cocoa Powder are not defined under Exim Policy and Customs Act, 1962, Regulations of the Food Safety & Standards (Food Products Standards & Food Additives) Regulations, 2011, define them as follows. Regulation No Definition 2.4.1 "Atta" or "resultant Atta" means the....
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...., kum-kum and soap", applied this principle to hold that the word "perfumery" in the context in which it is used has no application to 'dhoop' and 'aggarbatti.'We further find that Hon'ble Calcutta High Court, in the case of Atlantis (East Limited)(1975) 36 STC 210 Cal, held that in common parlance 'Flour' is understood to mean only Wheat Flour; it did not include barley powder. 9. We find that any article is to be read in the context of the Group it is placed in. If Flour is placed along with Maida/Atta it cannot be taken to include 'Cocoa Powder' for the reason that 'Cocoa Powder' is a technically a Flour of beans. The issue is not so complicated and isolated that one requires to refer to Technical Literature to understand the terms. Technical Literature, being in its place, is no alternative to common sense and common man's understanding or for that matter Trade parlance. It's not the case of the importers that a common man on the street understands that 'Cocoa Powder' and 'Atta/ Maida/Flour' to be one and the same. No common man would go to a Flour mill to purchase 'Cocoa Powder'. Therefore, we find that no amount of painful elaboration based on too technical literature woul....
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....s a principle of construction, meaning thereby when general words in a statutory text are flanked by restricted words, the meaning of the general words are taken to be restricted by implication with the meaning of the restricted words. This is a principle which arises "from the linguistic implication by which words having literally a wide meaning (when taken in isolation) are treated as reduced in scope by the verbal context". It may be regarded as an instance of ellipsis, or reliance on implication. This principle is presumed to apply unless there is some contrary indication [see Glanville Williams, The Origins and Logical Implications of the Ejusdem Generis Rule, 7 Conv. (NS) 119]. 34. It is also one of the cardinal canons of construction that no statute can be interpreted in such a way as to render a part of it otiose. It is, therefore, clear where there is a different legislative intent, as in this case, the principle of ejusdem generis cannot be applied to make a part of the definition completely redundant." ........ 29. Nositur a Sociis means that when two words are capable of being analogously defined, then they take colour from each other. The ter....
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....y the DFIAs which describe the goods as 'Maida/Atta/Flour' and consequently, the benefit of exemption is not available to the importers. 13. We find that the importers vehemently relied upon the case of Kushalchand& Co. However, learned Special Counsel submits that as observed by the Hon'ble Supreme Court, the decision is relevant only inter se between the parties i.e. the Department and M/s. S. Kushalchand& Co and It will not apply to others and even to M/s. Kushalchand in respect of the imports made elsewhere for the subsequent periods. A look at the relevant Paras of the judgement would be immensely beneficial. "5. It is pertinent to mention that in spite of particular conclusion which was arrived at by the Tribunal that "Cocoa Powder" was 'Flour' and covered under the description of the license, the Department did not choose to challenge this finding by filing any further appeal, therefore, at least inter se between the parties, the said issue attained finality and this finding was binding on the Commissioner and, therefore, it was not open to the Commissioner to re-visit the issue all over again and come to a contrary finding. 6. The learned Attorney Gener....
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....e what actually are the goods which could lawfully be imported on the basis thereof. If the goods are not within the sanction of importation under a particular type of licence, an error on the part of the appraising authorities on any previous occasion will not confer any right upon the importers to import such goods again on the basis of similar licences. It is also an accepted principle that if the customs authorities had been in error in not appreciating on any previous occasion that some goods not really covered by the licence were being imported on the basis of such licence they cannot be made to be embedded in the error for all transactions in the future. They have every right to correct their own error and if such correction requires adjudication it would not be just and proper for this court to refuse them an opportunity to do so................." 16. We find that the benefit of Notifications No 40/2006-Cus dated 1/5/2006 and No 98/2009-Cus dated 11/9/2009is not automatic. It is subject to fulfilment of various conditions. Both notifications prescribe that the description, value and quantity of materials imported are covered by the said authorisation and the said authori....
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....als are liable to be rejected on the issue of limitation. 18. Coming to the appeals filed by M/s Ravi Foods and others, wefind that the issue involved in this case is also same as other importers i.e. whether 'Cocoa Powder' of ITCHS 18050000is same as 'Flour' of ITCHS Code 11010000. On the merits of the case our findings as above are equally applicable to these set of appeals also. We hold, to cut short the repetition that 'cocoa powder' cannot be equated 'Maida/Atta/Flour' with and be allowed to be imported duty free against the DFIAs in question. In this case, we find revenue has provisionally assessed the bill of entry and on adjudication Commissioner has not only denied the exemption Notification but also confiscated the imported cocoa powder and allowed the same to be redeemed on payment of redemption fine in lieu of confiscation. He has also imposed penalties on the importer and their personnel. We find that though assessing the bill of entry provisionally is the prerogative of the department and the department is in its right to assess the bill of entry provisionally pending any enquiry or clarification, we find that seizure and confiscation are not warranted. We find tha....