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2024 (3) TMI 194
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.... and goods were provisionally released on 23.1.2014 on execution of Bond for an amount of Rs.40,58,791/- and Bank Guarantee of Rs.20,29,396/- and also entire duty demand of Rs.8,52,833/- was paid. On further detailed investigations, Appellants were issued show-cause notice dated 5.5.2014 demanding differential duty on the mis-declared imported goods. On adjudication of the show-cause notice, the original adjudicating authority rejected the classification claimed by the appellant and demanded differential duty of Rs.4,30,14,978/- in terms of provisions of proviso to earlier Section 28(1) or Section 28(4) of the Customs Act, 1962 along with interest and penalty and imposed personal penalty on Shri S.A. Gopalakrishna, CEO and Director of the appellant-company under Section 112 & 114AA of the Customs Act, 1962 and also imposed redemption fine of Rs.1,50,00,000/- under Section 111(m) of the Customs Act, 1962. Aggrieved by this order, appellants are before us. 2. Shri B. V. Kumar, learned counsel for the appellant submits that the term 'weed' is a subjective one without any classification value. He further submits that imported goods are nothing but 'Weeder or Brush cutter' used to er....
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....ginal authority at the time of import. It may be seen that, on the cover page at the top the words "POWER WEEDER / SHOOT PRUNER" are printed and at the bottom of the cover page the instructions given are read as "Please read the following instructions before you use this brush cutter to ensure safe operation". It may also be seen from the printed images of the import items on the user manual, especially from the images at the page no. 5 & 8, that the import item is a hand-held device and also it can be seen that the cutting blades are designed exclusively for brush cutting and therefore it may be concluded from the user manual itself that the import goods are Brush Cutters - Model No. AMH 200 and are hand held machines used for brush cutting purpose. A brand name of AGRIMATE was given on the user manual. However, there are no other details on the user manual to prove that the said machines are used exclusively for agriculture purpose. 3.2 In Budget 2012, concessional duty of customs was provided, specifically to agriculture and agro-processing sectors, from 7.5% /5% to 2.5%, on - "Sugarcane planter, root or tuber crop harvesting machine and rotary tiller & weeder, parts & compon....
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.........". From the user manual of Agrimate AMH 200 Brush Cutter and the images therein it may be seen that the said Brush Cutter is a hand-held device and from the information available on the internet, it is found that the said Brush Cutters are very light weight equipment, with weight of 7.7 Kgs and the weight of the main part i.e., engine Honda GX-35 is only 3.33 Kgs Therefore, the impugned equipment is a portable device. The said Brush Cutter also has a self-contained engine and therefore, the Adjudicating Authority has rightly classified the said 'Brush Cutters' under CTH 84678990. Whereas, the CTH 8432 refers exclusively to 'Agricultural, horticultural or forestry machinery, the CTH 8467 refers to the tools used in various industries. While Tillers / Power Weeders are exclusively used for Agricultural or horticultural work, the portable Brush Cutters are usable at various other work as mentioned at HSN Explanatory Note under CTH 8467 Sl. No. (18). Therefore, the impugned Brush Cutters are not exclusively usable for agricultural purpose. Hence, it is the benefit of concessional duty of customs provided exclusively to agricultural equipment 'Rotary Tiller / Weeder' (classifiable ....
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....d on similar issues, the hon'ble CESTAT Bengaluru vide Final Order No.20934-20936/2018 dated 10.07.2018 {Ratnagiri Impex Pvt Ltd Versus Commissioner of Customs, Bengaluru [2019(369) ELT 1132 (Tr. Bang.)]} held that the Appellant - M/s Ratnagiri Impex are not entitled for exemption under Notification No.21/2002-Cus. The Extended Period was also held to be invokable as and also the penalties imposed on the Appellant company and the Director was also upheld. The ratio of the said judgment is applicable to the instant case also. 3.7 The learned Authorised Representative also relied on the following case laws and the ratio of judgements therein, as applicable to the instant case: (i) Commissioner of Customs (Import), Mumbai Versus Dilip Kumar & Company [2018 (361) ELT 577(SC)] - wherein the Larger Bench of Hon'ble Apex Court has held that the burden to prove the entitlement for claiming exemption is on the assessee and that, it any ambiguity in exemption notification, benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in favour of the revenue. (ii) M/s. Bayer India Ltd Versus Commissioner of Central Excise, Mumbai [2001 (130) ELT ....
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....ess Steel Industries [2001 (132) ELT 10 (SC)] - wherein extended period is held to be invokable for 'mis-statement and suppression by the party. 4. Heard both sides and perused the records. The issues involved in the present appeal for determination are: (i) Whether the goods are 'power weeders or brush cutters' (ii) Whether the goods are classifiable under CTH 8432/8433 as claimed by the importer or under CTH 8467 as claimed by the Revenue (iii) Whether the benefit of concessional rate of duty 2.5% advalorem in terms of Notification No.12/2012 dated 17.3.2012 is available. (iv) Whether the appellant mis-declared the description of the goods to evade payment of duty. 5. On verification by the department, the products were mentioned as 'Agrimate' and on the package, it was mentioned as "This cutting blade is designed exclusively for brush cutter. Do not use it for other applications". The user manual produced before us reads as "please read the following instructions before you use this brush cutter to ensure safe operation". The learned AR has also placed on record the document which mentions the item as 'Agrimate AMH 200-4S Brush Cutter', ....
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....tributors U 7.5% - 8432 80 - Other machinery 8432 80 10 --- Lawn or sports ground rollers Kg 7.5% - 8432 80 20 --- Rotary tiller Kg 7.5% - 8432 80 90 ---- Others Kg 7.5% - 8432 90 - Parts 8432 90 10 --- Parts of agricultural machinery falling within headings 843210, 843221, 843229, 843230 and 843240 Kg 7.5% - 8432 90 90 ---Others Kg 7.5% - 8433 HARVESTING OR THRESHING MACHINERY, INCLUDING STRAW OR FODDER BALERS; GRASS OR HAY MOWERS; MACHINES FOR CLEANING, SORTING OR GRADING EGGS, FRUIT OR OTHER AGRICULTURAL PRODUCE, OTHER THAN MACHINERY OF HEADING 8437 - Mowers for lawns, parks or sports-grounds: 843311 -- Powered with the cutting device rotating in a horizontal plane: 84331110 --- Powered with 3 HP or more u 7.5% - 84331190 --- Other u 10% 843319 -- Other : 84331910 --- Non-powered mowers, havi....
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.... entry is that the declared product namely 'brush cutters' is classifiable under CTH 8432 2990 since this product is meant for agricultural purposes and cleared to the farmers. Its use for agricultural purposes has been supported by certificates issued by the University of Agricultral Sciences, Bangalore. 10. ........... 11. Revenue's argument, on the other hand, is that CTH 8432 and 8433 cover only 'machinery' and not hand tools. The hand tools specifically covered under the scope of CTH 8467. In support, ld. A.R. for the Revenue referred to the relevant HSN Explanatory Notes, which is reproduced as under: "8.1 The Explanatory Notes to Harmonized Commodity Description and Coding System (Fifth Edition, 2013) for CTH 8432 read as follows: "The heading covers machines, whatever their mode of traction, used in place of hand tools, for one or more of the following classes of agricultural, horticultural and forestry work, viz.: ------ ------ The machines of the heading may be hauled by an animal or by a vehicle (e.g. a tractor), or may be mounted on a vehicle (e.g. on a tractor or horse-drawn chassis). (In this context "trac....
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....l weight during operation they may be used with auxiliary supporting devices (e.g. Tripods, Jacklegs, Overhead Lifting Tackle). However, certain tools for working in the hand of this heading have fittings permitting them to temporarily fixed to a support. They remained classified here, together with support if it is presented therewith, provided the tools are essentially "for working in hand" as defined above. Some of the tools covered by this heading may be fitted with auxiliary devices (e.g. ; a Fan Wheel and its dust bag to remove and collect dust during working)" 8.4.2 Further, the Explanatory Notes to CTH 8467 also specify the Tools covered under this heading and Sl.No. 18 & 19 of the list are reproduced below:- "(18) Portable machine for trimming lawns, cutting grass in corners, along walls, borders or under bushes, for example. Such machine have a self-contained motor in light metal frame and a cutting device usually consisting of this nylon thread. (19) Portable brush-cutters with a self-contained motor, a drive shaft (rigid or flexible) and a tool holder, presented together with various interchangeable cutting tools for mounting in tool holder." ....
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.... the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to it in the HSN when there is no indication in the Indian Tariff of a different intention." Clearly, therefore, the HSN Explanatory Notes are entitled to far greater consideration than the Tribunal has given there. 3. The Tribunal has also said that the Collector (Appeals) had not relied upon the HSN Explanatory Notes. That was clearly an oversight of the Tribunal because its order says, earlier, thus: "The Collector (Appeals) held that the photographic apparatus, as has been imported, for making printing blocks were excluded from Chapter Heading 84.38 vide Explanatory Notes to CCOM at Page 1288." 4. The civil appeals are, therefore, allowed. The orders under appeal are set aside. The appeals before the Tribunal are restored to it for being heard and disposed of afresh. All contentions shall be available to the parties thereto." Thus, the impugned goods in question i.e. 'brush cutters' is correctly classifiable under CTH 8467 8990 of CTA,1975. Therefore, the question of classification is settl....
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.... No.12/2012. To support the above, the appellant produced test report dated 27.05.2011 given by University of Agricultural Sciences, Bangalore; Order dated 21.9.2011 given by Department of Horticulture, Government of Karnataka; Letter dated 24.8.2012 from Coffee Board, Bangalore; and Circular dated 21.2.2011 of Coffee Board, Bangalore. The goods imported by the appellant have got dual use though it is not meant for use exclusively for the agricultural operations. Moreover, goods were subjected to examination by the proper officer of the Customs and burden to prove that an article falls under a particular entry lies upon the Revenue. In the absence of any specific averments regarding wilful suppression of the fact, as held by this Tribunal in similar case in the case of Hikoki Power Tools India Pvt. Ltd. vs. CC, Bangalore vide Final Order 20945-20946/2023 dated 18.09.2023, extended period of limitation cannot be invoked. Following the ration of the above decision, the impugned goods are classifiable as 'Brush Cutters" under Chapter Heading 8467 and not eligible for the benefit of Notification. Invoking extended period of limitation cannot be sustained. 10. In the result, the impu....