TaxTMI 
TaxTMI 
2024 (4) TMI 697
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....e test reports, the assessments were finalized under the same CTI. Aggrieved, the appellant appealed to the Commissioner (Appeals) who, by the impugned, orders upheld the finalization of the assessments. Hence, these appeals. 3. We have heard learned counsel for the appellant and the learned authorised representative for the Revenue and perused the records. Submissions on behalf of the appellant 4. Shri Devesh Tripathi, learned counsel for the appellant made the following submissions. 5. The details of the Bills of Entry in the these three appeals are as follows: Point of Comparison Appeal No. C/51855/2021 Appeal No. C/51856/2021 Appeal No. C/51857/2021 Bill of Entry details B/E No. 9670623 dated 16.01.2019 B/E No. 4437012 dated 09.08.2019 B/E No. 6471645 dated 14.01.2020 Issue/s involved Classification Classification Classification and valuation Re-assessment Yes No Yes Provisional assessment Yes No Yes Number of assessments 3 1 4 Date of first assessment 16.04.2019 26.11.2019 19.02.2020 Unit price change No No Yes (from 10.25$ to 12.5$) CTH claimed alon....
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....Supreme Court in Canon India 2021(376) ELT 3(SC). e) In Customs Appeal no. 51857 of 2021, the Assistant Commissioner wrongly enhanced the value of "Insane Labz Psychotic (Amino acid powder) 35 SU/220 grams" from US $ 10.25 to US $ 12.50 relying on a past import by the appellant because the quantities of import were vastly different. 7. Elaborating on the alleged multiple assessments, learned counsel submitted that Section 17 provides for (a) self-assessment by the importer and (b) re-assessment by the proper officer. Once the Bill of Entry is re-assessed, there is no scope for the proper officer to again reopen it and make a third or fourth assessment as has been done in these cases. Further, once final assessment is made, there is no provision under which it can then be converted into a provisional assessment. Therefore, the assessment in these cases were themselves against the provisions of the law. Reliance is placed on Priya Blue Industries Ltd. vs CC (Prev) (2205) 10 SCC 433. Section 47 deals with clearing the goods for home consumption. Merely because the clearance for home consumption was not yet given under section 47, it does not mean that assessment was not....
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....n this case was for 15,624 pieces and hence the price was lower at US$ 10.25 per piece. Submissions on behalf of the Revenue 12. Shri Rakesh Kumar, learned authorised representative for the Revenue supported the impugned orders and made the following submissions. 13. On the first assertion of the appellant that there were multiple assessments in the same case contrary to the provisions of section 17, learned authorised representative for the Revenue submits that assessment is a dynamic process and it will end once the customs officer clears the goods for home consumption under section 47. Until then, the assessment is open and the officer can revise it, if necessary. For instance, in a case where the importer self-assesses the duty, the officer first re-assesses the duty based on the declarations. However, if during examination, the goods are found to be at variance with the declaration, based on the examination report from the shed, the proper officer again re- assesses the duty. Once the proper officer clears the goods for home consumption, they cease to be imported goods and no duty can be charged on them. Until the order clearing the goods for home consumption is given....
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....e same Bills of Entry in these cases contrary to the provisions of section 17 as alleged by the appellant? b. Was there any violation of principles of natural justice in these cases? c. Was the Assistant Commissioner of Customs who passed the OIO the proper officer to do so? d. Were the imported goods classifiable under CTI 29379090 as claimed by the appellant or CTI 21069099 as classified in the impugned orders? e. Can the enhancement of value of Insane Lab Psychotic (Amino Acid Powder) 35 SU/220 grams be sustained? Assessments 19. According to the learned counsel for the appellant, once the importer self-assesses his Bill of Entry and the proper officer re-assesses it and the importer pays the duty, the assessment is complete. Thereafter, if the assessment has to be modified, the only course for the department is to either file an appeal before the Commissioner (Appeals) or issue an SCN under section 28. According to the learned counsel, the department has not only resorted to multiple assessments in the same Bills of Entry in these cases but has also, after initially making the final assessment, revised it to provisional assessment pendi....
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....ty, weight, volume, measurement or other specifics where such duty, tax, cess or any other sum is leviable on the basis of the quantity, weight, volume, measurement or other specifics of such goods; (e) the origin of such goods determined in accordance with the provisions of the Customs Tariff Act or the rules made thereunder, if the amount of duty, tax, cess or any other sum is affected by the origin of such goods; (f) any other specific factor which affects the duty, tax, cess or any other sum payable on such goods, and includes provisional assessment, self-assessment, re-assessment and any assessment in which the duty assessed is nil; (25) "imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption; 22. Thus, once the goods are cleared for home consumption, they cease to be imported goods and therefore, there can be no further assessment of duty. The assessment already made, can, of course be modified in appeal or through a process under section 28, etc. This leads us to the next question as to who can assess the duty and how. This is laid down in section 17 w....
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.... the proper officer can (a) verify the entries made, i.e., the details provided in the Bill of Entry with regard to the nature of goods, specifications, value, etc; and (b) verify the self-assessment of the goods; and then re-assess the duty. Both the self-assessment and the re-assessment are assessments as per section 2(2). But there could be occasions when the assessment cannot be done at that stage because of some details or test report, etc. are required. In such cases, the goods are provisionally assessed to duty and the goods are cleared for home consumption and thereafter, the provisional assessment is finalized. In such a case, although the goods cease to be imported goods once they are cleared for home consumption, the assessment which was only provisional before such clearance has to be finalized. This finalization is not a new assessment but a completion of the assessment which was left incomplete before the goods were cleared. Section 18 of the Act reads as follows: "Section 18. Provisional assessment of duty. - (1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46 and section 50,- (a) where the import....
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....ntral Government, consequent to the final assessment order or re-assessment order under sub- section (2), at the rate fixed by the Central Government under section 28AA from the first day of the month in which the duty is provisionally assessed till the date of payment thereof. (4) Subject the sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refunded under that sub-section within three months from the date of assessment, of duty finally or re-assessment of duty, as the case may be, there shall be paid an interest on such un-refunded amount at such rate fixed by the Central Government under section 27A till the date of refund of such amount. (5) The amount of duty refundable under sub-section (2) and the interest under sub-section (4), if any, shall, instead of being credited to the Fund, be paid to the importer or the exporter, as the case may be, if such amount is relatable to: (a) the duty and interest, if any, paid on such duty paid by the importer, or the exporter, as the case may be, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (b)....
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....vernment, by notification in the Official Gazette. Provided that the Central Government may, by notification in the Official Gazette, specify the class or classes of importers who shall pay such duty electronically. Provided further that where the bill of entry is returned for payment of duty before the commencement of the Customs (Amendment) Act, 1991 and the importer has not paid such duty before such commencement, the date of return of such bill of entry to him shall be deemed to be the date of such commencement for the purpose of this section. Provided also that] if the Board is satisfied that it is necessary in the public interest so to do, it may, by order for reasons to be recorded, waive the whole or part of any interest payable under this section." 25. Once an order under section 47 is issued, the goods cease to be 'imported goods' as per section 2(25) and therefore, no assessment of duty is possible. Thus, it puts an end to the process of assessment under section 17. Thereafter, the assessment already made can be modified either on appeal to the Commissioner (Appeals) by either side or an appeal by higher appellate authorities or it can be re....
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....would have to revise his assessment with respect to duty or even restrictions on imports. Thus, an assessment is not always a one-shot affair and the proper officer who does the assessment will have to revise the assessment on receiving additional inputs from the examining officer or otherwise. 29. There could be other cases where after assessment, intelligence is received that some non-declared items were in the same container. This would also require the assessment to be modified as it will still be open before the goods are given out of charge under section 47. 30. After the self-assessment of the Bills of Entry and the selective re-assessment based on risk management have been introduced, many Bills of Entry are cleared without any re- assessment. The system clears the goods based on self- assessment by the importer. It happens on a daily basis that the importer realizes either after self-assessment or even after re-assessment by the officer and after duty has been paid that he was eligible for some exemption notification which would reduce his duty liability but which he had erroneously not claimed. In such cases, the importer or his customs broker gives a written reques....
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....ration. 34. It also needs to be noted that the goods were cleared in this case because the appellant had executed a test bond. It was open to the appellant to have not executed a test bond, but to have waited for the test report and cleared the goods only after the final assessment. 35. In short, until the order clearing the goods for home consumption under section 47 is issued, the goods continue to be imported goods and assessment and re-assessment is permissible more than once. It is this flexibility within the system which greatly facilitates trade and expedites clearances while providing an opportunity to the assessing officer to make changes in the assessment if necessitated before clearing the goods for home consumption. Principles of natural justice 36. Learned counsel for the appellant submitted that the principles of natural justice were violated because no SCN was issued to the appellant before finalizing the assessment. He, however, concedes that the appellant had made written submissions which were considered. 37. We find that as per the Customs Act, SCN has to be issued under section 28 (if a demand is being raised) or under section 124 (if the goods ar....
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....mmended dosage is also prescribed on these goods. 40. Amino acids, as is well known, are the building blocks of proteins just as glucose is the building block of carbohydrates. If protein is consumed in any form- say, milk, eggs, dal, meat, etc., the digestive system breaks it down into amino acids which are then used by the body to build its own proteins. Vitamins are also essential ingredients. Caffeine, tea extract, etc. add flavour and act as stimulants. 41. The question is whether these products are classifiable under CTI 29379090 as claimed by the appellant or under CTI 21069099 as classified by the department. These two competing entries are reproduced below: 2937 HORMONES, PROSTAGLANDINS, THROMBOXANES AND LEUKOTRIENES, NATURAL OR REPRODUCED BY SYNTHESIS; DERIVATIVES AND STRUCTURAL ANALOGUES THEREOF, INCLUDING CHAIN MODIFIED POLYPEPTIDES, USED PRIMARILY AS HORMONES - Polypeptide hormones, protein hormones and glycoprotein hormones, their derivatives and structural analogues: 2937 11 00 -- Somatotropin, its derivatives and structural 2937 12 00 -- Insulin and its salts 2937 19 00 -- Other - Steroidal hormones, their analo....
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....mpound (whether or not containing impurities), except mixtures of acyclic hydrocarbon isomers (other than stereoisomers), whether or not saturated (Chapter 27); (c) the products of headings 2936 to 2939 or the sugar ethers, sugar acetals and sugar esters, and their salts, of heading 2940, or the products of heading 2941, whether or not chemically defined; 8. For the purpose of heading 2937: (a) the term "hormones" includes hormone- releasing or hormone-stimulating factors, hormone inhibitors and hormone antagonists (anti- hormones); (b) the expression "used primarily as hormones" applies not only to hormone derivatives and structural analogues used primarily for their hormonal effect, but also to those derivatives and structural analogues used primarily as intermediates in the synthesis of products of this heading." 43. According to the learned counsel for the appellant, the imported goods should be classified under CTI 2937 90 90. The department does not agree with this contention because as per Chapter Note 1(a) to chapter 29, the headings of this chapter apply to only 'separate chemically defined organic compounds, whether or not containing....
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.... human metabolism in very small quantities because they act by switching on and switching off certain biological processes. For instance, one's blood sugar may increase after consuming, say, 100 grams of sweets. Sensing heightened levels of blood sugar, the pancreas releases a tiny additional amount of insulin which increases the permeability of the blood corpuscles to the sugar. As a result, the excess sugar is taken in by these blood corpuscles and the levels of free sugar in the blood plasma goes down immediately. Similarly, if a patient suffers from hypothyroidism, a tiny reduction in the thyroxine produced by the thyroid greatly increases the weight of the person by altering the metabolism of the body resulting in more food getting converted into fat and getting deposited. Reverse will be the case of patients of hyperthyroidism who lose weight for no other reason. It is well known that hormones - say, insulin, thyroxine, steroids, etc. are all to be taken only on medical advice and indiscriminate or unsupervised usage can have disastrous consequences. 49. The submission of the learned counsel for the appellant is that the imported goods should be considered as hormone- stim....
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....ulin stimulating factor. It is only a substrate in response to which the production of insulin increases. 51. It is unnecessary for us to discuss further biochemistry of hormone stimulating factors and hormone inhibitors. Suffice it to say that these are a separate set of chemicals no less powerful than the hormones themselves. The composition of the imported goods as seen from the labels shows clearly that they are mixtures of amino acids, vitamins, a few stimulants like caffeine and tea and some flavours and nothing suggests that they are hormone stimulating or hormone inhibiting factors. We are therefore, of the considered view that they do not merit classification under CTI 2937 90 90. 52. Department classified these goods under CTI 2106 90 99. This Chapter covers Miscellaneous edible preparations. Chapter heading 2106 covers "Food preparations not elsewhere specified or included" and of these the last residual category is CTI 2106 90 99. Chapter note 5(b) to this chapter says that 'Heading 2106 (except tariff items 21069020 and 21069030), inter alia, includes: (a) protein concentrates and textured protein substances; (b) preparations for use, either dir....