TaxTMI 
TaxTMI 
2023 (12) TMI 1080
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.... supplier M/s DXN Industries, Malaysia. 3. On verification of the import data of M/s Daxen Agritech (India) Pvt. Ltd., it was noticed that the importer had imported the subject goods vide Bills of Entry as mentioned in Table-A. BE No. BE date Item name Ass. Value (INR) Duty paid (INR) Duty payable (INR) Differential duty (INR) 2608299 03.07.2013 Bulk Reishi Gano Powder 8152639.2 726359 4308425.238 3582066.2 Bulk Ganocelium Powder 7246790 645652 3829711.111 3184059.1 3421252 01.10.2013 Bulk Reishi Gano Powder 10738593 956755 5675024.243 4718269.2 Bulk Ganocelium Powder 5206590 463881 2751526.617 2287645.6 3708747 04.11.2013 Bulk Reishi Gano Powder 7138150 441138 3772298.131 3331160.1 Bulk Ganocelium Powder 11103788 686214 5868018.844 5181804.8 5210850 16.04.2014 Bulk Reishi Gano Powder 6937318 428726 3666164.443 3237438.4 Bulk Ganocelium Powder 9249757 571635 4888219.082 4316584.1 6718801 10.09.2014 Bulk Reishi Gano Powder 7000436 432627 36995....
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....en issued the show cause notice dated 02.07.2018 covering the bills of entry for the period from 30.07.2013 to 23.03.2018 to which the appellant filed its reply. Thereafter a supplementary, show cause notice was issued to the appellant which was also duly replied. On adjudication, the Principal Commissioner rejected the classification claimed by the appellant of the products as Ayurvedic medicaments under CTH 30039011 and affirmed the classification as proposed in the show cause notice, invoking the extended period of limitation and the consequential interest and penalty along with confiscation of goods under section 111(m) and (o) of the Customs Act, 1962 (hereinafter referred to as the Act). 7. We have heard the learned Counsel for the appellant and also the Authorised Representative for the revenue and have perused the records of the case. 8. The moot question in the present appeal is whether the product Reishi Gano and Ganocelium are classifiable as Ayurvedic medicaments under chapter 3003.9011 of the First Schedule to the Central Excise Tariff Act, 1985 (CETA) as contended by the appellant or as food supplements under CTH 2106999 of CETA. The re....
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....ince, the issue of classification, the dispute matter is in the Hon'ble Supreme Court, the appellant is not contesting the same before this Hon'ble Tribunal, being sub-judice in nature." Thus the issue of classification on merits stands affirmed in favour of the revenue and against the appellant. 9. The next question which arises in the present appeal is the invocation of the extended period of limitation under section 28(4) of the Act. The submission of the learned Counsel is that the issue of classification of the products in question was within the knowledge of the department at the time of clearing of the subject goods at the relevant time of imports as the department itself had filed an appeal against the Order-in-Appeal dated 17.02.2014 before the Tribunal and therefore the allegations of suppression are not made out and so the extended period of limitation cannot be invoked. The learned Authorised Representative for the revenue have submitted that the period of limitation has been rightly invoked and cited several judgements in support thereof. 10. We find that show cause notice was issued on 2.7.2018 for the period 03.07.2013 to 03.03.2018, covering sev....
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....ant to come to know about the final order. It may be pointed out that the SCN dated 02.07.2018 was issued in the present proceedings six months after the final order. Therefore, in respect of nine bills of entry, the importer and the appellant were correct in classifying the goods as per order of the Commissioner (Appeals) and the officers were correct in clearing the goods for home consumption accordingly. The Principal Commissioner is in error in holding in the impugned order that the importer and the appellant (in importer's behalf) should have filed bills of entry contrary to the order of the Commissioner in good faith. 12. There is a well established practice in the department to deal with cases with the order which holds the field is against the revenue and an appeal is pending with the superior court or Tribunal. SCN are issued periodically to protect revenues interest and they are transferred to the call book which are then decided after the order of the superior Court or Tribunal is received. In these bills of entry also, after the order of the Commissioner (Appeals), SCNs could have been issued and transferred to Call Book and decided after this Tribunal pas....
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....ion was not correct, it could have scrutinized the returns and issued notices within time. The show cause notice was issued on 30 September, 2015 for the period covered October, 2010 to June, 2012, which is clearly beyond the normal period of limitation. Therefore, although Revenue is correct on merits, the demand is time barred and, therefore, cannot sustain. For the same reason, the penalties imposed upon the appellant under Sections 77 and 78 also cannot be upheld." 13. The Supreme Court in Nizam Sugar Factory 1995 (78) ELT 401 has categorically laid down that where facts are known to both the parties, the omission by one to do what he might have done, and not that he must have done, does not render it suppression. Thus when all the facts are before the department as in the present case then there would be no wilful mis-declaration or wilful suppression of facts with a view to evade payment of duty. The relevant para from the judgement in Nizam Sugar Factory (supra) is quoted below:- "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception an....
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....8(4) of the Act, hence the show cause notice dated 2.07.2018 is barred by limitation for the period beyond the normal period. 15. We now come to the issue of imposing penalty under section 114A of the Customs Act on the appellant. As we have held that it is not a case of willful suppression, mis-statement or misdeclaration by the appellant, the ingredients required for invoking the penalty being the same, we hold that penal action under the provisions of section 114A as imposed by the impugned order is not justifiable and is hereby set aside. We are also supported by the decision of this Tribunal dated 1.12.2022 (arising out of the same impugned order) refuting the observations of the Principal Commissioner on self assessment by the appellant, inter-alia observing: "14.......Self assessment is subject to any reassessment by the proper officer. Self assessment can also be appealed against to the Commissioner (Appeals). They can assess duty as per their understanding and the officers are free to reassess it as per section 17(4). Mis-classification or incorrect assessment of duty does not amount to mis-declaration in the bill of entry, nor does it attract any penalty. 15.............