TaxTMI 
TaxTMI 
2020 (10) TMI 289
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....)" against two Bills of Entry dated 10.12.2015 and "Pellets Neutral" for remaining Bills of Entry classifying all the declared products under sub-heading 17029090 of CTA,1975. Consequently, a show-cause notice was issued to the appellant proposing re-classification of the goods under CTH 17019990 and recovery of the differential duty of Rs. 27, 11,272/- along with interest. On adjudication, the Joint Commissioner of Customs confirmed the classification of the goods declared as Sucrose and Non-Pareil Seeds Mesh Sugar Sphere (Pharmaceutical Grade) under CTH 17019990 and also confirmed the differential duty with interest; held that the goods liable for confiscation under Section 111(m) of the Customs Act, 1962, however, as the goods were not available did not impose redemption fine; imposed penalty of Rs. 5.00 lakhs under Section 112(a) of the Customs Act, 1962. Aggrieved by the said order, they filed appeal before the learned Commissioner (Appeals), who in turn, upheld the adjudication order and rejected their appeal. 3. Appeal No. C/85493/2019 On the basis of intelligence, investigation was initiated by the Department recording statements of the appellant with regard to import....
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.... appellants are importing these goods since 2009 from Germany and as the imported goods are composed of sucrose along with other ingredients; they classified the product under Heading 17.02 of the CTA, 1975 declaring the same as Pellet Neutral or Non-Pareil Seeds mentioning the same as pharmaceutical grade. 4.1 Referring to the heading 17.01, the learned Advocate submitted that broadly stated it covers Cane Sugar in solid form (with or without added flavouring/colouring mater), Beet Sugar in solid form (with or without added flavouring/colouring matter) and chemically pure Sucrose in sold form. He submits that the manufacturing process adopted by the foreign supplier shows that the imported goods are not obtained by adopting the processnecessary in obtaining refined sugar. On the contrary, it is started with refined sugar as basic raw material; therefore, the goods are not refined sugar as contended by the Department, but sugar preparations. Learned Advocate has further submitted that following are the reasons that the imported goods do not fall under Heading 1701 but 1702 of CTA,1975 as ''other sugars'': - • The goods in question are "Sugar Preparations". It consis....
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....reparation of sugar', hence Heading 1701 is not applicable. Assailing the impugned finding of the lower authorities in classifying the product following the doctrine of "essential character", he has argued that the learned Commissioner (Appeals) has though held that the imported goods are nothing but "chemically pure sucrose" but failed to appreciate that as per HSN Explanatory Notes, chemically pure sucrose cannot have any other ingredients present in them, unlike in the case of refined sugars. The case of the Department has always been that the goods is refined sugar. 4.3 The learned Advocate has also submitted that the imported goods are alternatively classifiable under Heading 1704 of the CTA, 1975 which includes sugar confectionary. Referring to the HSN Explanatory Notes of heading 1704, he has submitted that the sugar preparations are collectively called as confectionary, thus, the imported goods are sugar products i.e. confectionary classifiable under heading 17.04. The imported products also known as "non-pareils", a popular confectionary preparation used as a decoration for chocolates, cakes, donuts etc. 4.4 Further, he has submitted that the manufacturer of the prod....
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....d was confirmed alleging mis-classification with intent to evade payment of duty. Hence, invoking the extended period of limitation under Section 28(4) of CA, 1962 and imposition of penalty is uncalled for and unjustified. In support they referred to the judgment of the Tribunal in Northern Plastic Ltd. Vs. CCE - 1998 (101) ELT 549(SC), Graphite India Ltd. Vs. CC - 2015 (325) ELT 777(Tri- Kolkata), Reliance Communications Infrastructure Ltd. Vs. CC(I) Nhava Sheva - 2015 (320) ELT 306(Tri-Mum). 5. Per contra, the learned AR for the Revenue reiterates the orders passed by the respective Commissioners. He has submitted that the appellant kept on changing their stand before the authorities below and initially claimed that due to oversight they have classified sugar spheres under CTH 17.02 whereas the impugned goods are claimed to be classifiable under CTH 17.04. Before the Commissioner (Appeals) they had claimed classification under Heading 1701 and submitted APEDA registration in support of such a claim. He has submitted that higher rate of duty under CTH 1701 was the main reason behind mis-classification of the sugar spheres by the appellant under CTH 1702 and a subsequent claim u....
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....ual category of "other sugars" mentioned in heading 1702. 5.2 Learned AR for the Revenue referring to the meaning of 'sugar confectionary' as per Food and Agriculture Organization of the United Nations (FAO) submitted that it refers to large range of food items, commonly known as sweets, boiled sweets, toffees, marshmallows and fondant etc. Sweets are nonessential commodity, but are consumed by people from most income groups. The variety of product is enormous ranging from cheap individually-wrapped sweets to those presented in boxes with sophisticated packaging. Thus, from the aforesaid meaning, it is abundantly clear that the sugar confectionary is essentially a food product commonly known as sweets in terms of the definition of FAO. Admittedly when the application of neutral pellets is in the pharmaceutical industry where such spheres of predominantly sugar (sucrose), have to be coated or perhaps infused with pharma compounds to turn the neutral spheres into specific pharmaceutical products, then it cannot be anybody's case that the neutral spheres can be considered as food or sweets (even in common parlance) by any stretch of imagination. Further, referring to Unites States ....
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....the Tribunal; whereas in Appeal No. C/85493/2019 the goods imported against 20 Bills of Entry involve the goods "Neutral Pellets" or "Non-pareil seeds 40-60 Mesh Sugar sphere (pharmaceutical grade). 9. The contention of the Revenue is that the imported sugar spheres or Non-pareil seeds 40-60 Mesh Sugar sphere (pharmaceutical grade) are classifiable under CTH 17019990 whereas the appellant while filing the Bill of Entry declared classification under CTH 17029090, but later during the appellate/adjudication proceedings claimed its classification alternatively under 17049090 of Customs Tariff Act, 1975. The Ld. Advocate for the Appellant also has not pressed the classification under Heading 17.02. of CTA,1975. Therefore, the competing entries 1701 and 1704 are reproduced as below: - Tariff Item Description of goods Unit Rate of duty (1) (2) (3) (4) 1701 Cane or beet sugar and chemically pure sucrose, in solid form - Raw sugar not containing added flavouring or colouring matter 1701 12 00 -- Beet sugar kg. 100% 1701 13 --&nbs....
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....venue's argument that the heading 1701 cannot be confined to raw sugar or chemically pure sucrose only with flavouring or colouring matter, but also will cover in its scope, sugar preparation in solid form. In support, they have referred to the Board's Circular No. 879/17/08-CX dated 5.9.2008 issued under section 37B of the Central Excise Act, 1944. It is their contention that the said Circular was issued to bring out uniformity in the classification of various sugar preparation, viz. Bura, Batasha, Misri and Makhana prepared from duty paid sugar which claimed to be classifiable as confectionary under heading 1704 instead of 1701. The said Circular has been considered by this Tribunal in the case of Triveni Udyog Vs. CCE, Jaipur-I - 2017 (358) ELT 950 (Tri-Del.) Referring extensively to the said Circular, this Tribunal observed that these products are classifiable under central excise Tariff sub heading 17019900 and not as confectionary under chapter heading 1704. 11. We find that in confirming the classification under Chapter heading 1701, the learned Commissioner (Appeals) in the impugned order held that chemically pure sucrose as mentioned under the Tariff Heading cannot be c....
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....se chemically pure sucrose is the main constituent and provides the essential character to the mixture as neither the starch which acts as binder nor water which is used in the process can be called as the essential item to be used in the pharmaceutical industry, the purpose for which the mixture is manufactured. 14. Further, we find that in eliminating the claim of alternative classification proposed by the appellant under sub-heading 1704, the learned Commissioner (Appeal No. 85493/2019) in the adjudication order referred to the meaning and scope of Sugar Confectionary provided by FAO. He has observed that the heading 17.04 covers sugar confectionary which is essentially a food product in terms of the definition given by FAO; whereas the Neutral Pellets/sugar spheres are used in the Pharmaceutical Industry where such spheres consist of predominantly sugar (sucrose) and have to be coated or perhaps infused with pharma compounds to turn the neutral spheres into specific pharmaceutical products, therefore, it cannot be said that the neutral spheres are to be considered as food or sweets used directly by the consumers. The contention of the appellant that the size of neutral spher....
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....imitation. The appellant during the period March, 2012 to February, 2015, admittedly from time to time filed Bills of Entry declaring their product under CTH 17029090. They have submitted that the product in question had been physically examined by the department; also the assessing officer on few occasions called for the literature on the composition, process of manufacture etc. to complete the assessment under the declared heading. It is their contention that at no point of time the description of the goods was mis- stated or mis-declared by the appellant or any facts relating to the said product suppressed from the department. They classified the product according to their best understanding and Department was well aware of the said classification, and assessments were completed accordingly. Hence, on a change of view by the department, allegation of mis-declaration or suppression of facts in classifying the product at the times of its import under CTH 17029090 is incorrect and cannot be sustained. The Revenue, on the other hand, argued that in the era of self-assessment, it is burden of the assessee to classify and discharge duty properly, hence, failure of classifying the prod....