TaxTMI 
TaxTMI 
2025 (1) TMI 1459
X X X X Extracts X X X X
X X X X Extracts X X X X
.... impugned goods imported under the said 15 BoE's under CTH 15180039 and deny the benefit of availment of BCD @7.5%vide Sl. No. 262 of Notification No. 50/2017 dated 30.6.2017. After due process of law, the Ld. Adjudicating Authority confirmed the demand as proposed in the Show Cause Notice and also imposed fine and penalties. Hence this appeal. 3. Shri Arjun Raghavendra, Ld. Advocate appeared for the appellant and Shri Anoop Singh, Ld. Authorized Representative appeared for the respondent. 3.1 The Ld. Advocate for the appellant submitted a table showing all 16 shipments pertaining to the impugned goods, that were cleared during the disputed period arranged chronologically, given in their reply to the SCN and is reproduced below. (BoE 4230263 is not part of the impugned proceedings); Sl. No. BoE Number Date HSN CODE Assessable Value Duty Paid Date Total Duty 1 2478534 17.07.2017 38123990 Rs. 14,89,244 18.07.2017 Rs. 4,03,816 2 4230263 01.12.2017 38123990 Rs. 15,54,098 02.12.2017 Rs. 4,21,401 3 5331154 23.02.2018 38123990 Rs. 15,69,370 01.03.2018 Rs. 4,35,265 4 5986892 16.04.2018 381....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8(4) was not sustainable since there is no suppression, collusion or wilful misstatement. Further the date of SCN should be taken as the date of supplying all RUDs i.e., 04.01.2023 or date of corrigendum i.e., 24.11.2022. In both scenarios, the notice is issued beyond two years of date of clearance of BoE for home consumption and hence the demand is time barred and the demand, confiscation and penalties are liable to be set aside since there is no collusion or any wilful mis-statement or suppression of facts etc. On merits he stated that the impugned ESBO is a collection of organic compounds obtained from the epoxidation of soybean oil. It is used as a secondary plasticizer and stabilizer in polyvinyl chloride (PVC) plastics. The mere fact that the precursor is Soyabean Oil - a vegetable oil - would not ipso facto make ESBO classifiable under chapter 15. Further, the notes to Chapter 15 at entry (f) specifically exclude goods which are classifiable under Section VI of the HSN. Since chapter 38 of HSN forms part of Section VI and it was and continues to be the bona fide belief of the Appellant that ESBO is classifiable under chapter 38, chapter 15 is not relevant in the instant matt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and the appeal may be rejected 4. We have heard the rival parties and have gone through the appeal memorandum and all connected documents. We find that the following issues have been raised for our consideration. A) Classification of imported 'Epoxidised Soya Bean Oil" under CTH 3812 (appellant) or CTH 1518 (revenue). B) Whether the SCN dated 26.06.2022 was time-barred considering that the date of supplying all RUDs was 04.01.2023 or that the date of corrigendum to the SCN was 24.11.2022 as in both scenarios, the issue of SCN is beyond two years of date of clearance of BoE for home consumption. C) Abrupt change in classification as held in the impugned order without any change in facts or law is improper as the matter attained finality on assessment of BOE 854412 D) Classification adopted by Appellant is in the nature of a claim made on the basis of the belief entertained by the Appellant and therefore, cannot be said to be a misdeclaration. E) Confiscation and penalties are liable to be set aside since there is no collusion or any wilful mis-statement or suppression of facts or any intentional furnishing of false information. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... inert gas or otherwise chemically modified, excluding those of heading 1516; inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this Chapter, not elsewhere specified or included: ---Linseed oil 1518 00 11 ----Edible grade 1518 00 19 ----Other ---Castor oil, dehydrated 1518 00 21 ----Edible grade 1518 00 29 ----Other ---Other vegetable oil and its fats 1518 00 31 ----Edible grade 1518 00 39 ----Other 1518 00 40 ---Other 5.3) The Hon'ble Supreme Court in its judgment in Commissioner of Customs and Central Excise, Amritsar (Punjab) Vs. D.L. Steels etc [2022 SCC OnLine SC 863], while approving the use of the HSN for the purposes of classification of goods for tax purposes stated; "9. The Harmonised System of Nomenclature, developed by the World Customs Organisation, has been adopted in India by way of the Customs Tariff Act, 1975, though there are certain entries in the Schedules to this Act which have not been assigned HSN codes. The Harmonised System is governed by the International Convention on Harmonised Commodity Description....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xcise Tariff. Under Rule 3(a), it is provided that the heading which provides a specific description shall be preferred to a heading having a more general description. For example, in the case of "toys" referred to in the HSN Heading and the Tariff Heading, the description refers to reduced size model of an Article used by adults. This test helps us to understand the difference between "toys" and "furniture". 10. Lastly, it is important to bear in mind that functional utility, design, shape and predominant usage have also got to be taken into account while determining the classification of an item. 11. The afore stated aids and assistance are more important than the names used in the trade or common parlance in the matter of correct classification." (emphasis added) The judgment gives importance to Rules of Interpretation of the Tariff (RIT). Under Rule 3(a), it is provided that the heading which provides a specific description shall be preferred to a heading having a more general description. 5.5) Further, the Hon'ble Supreme Court in its recent judgment dated 18.12.2024, in Commissioner of Central Excise, Salem Vs M/s. Madhan Agro Industries (India) Privat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are used as plasticisers or stabilisers for e.g. vinyl resins. The Explanatory Notes of the CTH 1518 are reproduced below:- 15.18 - ANIMAL OR VEGETABLE FATS AND OILS AND THEIR FRACTIONS, BOILED, OXIDISED, DEHYDRATED, SULPHURISED, BLOWN, POLYMERISED BY HEAT IN VACUUM OR IN INERT GAST OR OTHERWISE CHEMICALLY MODIFIED, EXCLUDING THOSE OF HEADING 1516; INEDIBLE MIXTURES OR PREPARATIONS OF ANIMAL OR VEGETABLE FATS OR OILS OR OF FRACTIONS OF DIFFERENT FATS OR OILS OF THIS CHAPTER, NOT ELSEWHERE SPECIFIED OR INCLUDED (A) Animal or vegetable fats and oils and their fractions, boiled, oxidized, dehydrated, sulphurised, blown, polymerized by heat in vacuum or in inert gas or otherwise chemically modified, excluding those of heading 1516 ; This part covers animal or vegetable fats and oils and their fractions which have been subjected to processes which modify their chemical structure thereby improving their viscosity, drying power (i.e. the property of absorbing oxygen when exposed to the air and forming elastic films) or modifying their other properties, provided they retain their original fundamental structure and are not more specifically covered elsewhere, e.g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is the appellants contention that the rightful Adjudicating Authority of the impugned notice was identified only on 24.11.2022 and hence it allowed them to make an effective reply to the Proper Officer on that date only. Whereby the date of SCN should be taken as of that date. We find that the corrigendum in this case has not materially changed either the content or the grounds stated in the original SCN. It only corrects an error without affecting right, privilege, obligation or liability of the appellant from that stated in the SCN. Hence the appellant was not effectively disadvantaged. Such an amendment brought about by a corrigendum to show-cause notice would date back to the notice itself. This plea is hence rejected. 6.3) As regards the date of supplying all RUDs, the appellant has stated that although the SCN mentioned that the relied upon documents were enclosed as Annexure A along with a detailed worksheet as Annexure B, these documents were not enclosed as stated. Repeated requests were made for service of the complete show cause notice vide their letters dated 09.08.2022, 07.09.2022, 03.11.2022 and 24.11.2022. It was only on 04.01.2023 that the missing annexures wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Vs Collector of Central Excise, Pune - Civil Appeal No. 4457 of 1984. Dated: 19.2.1992]. 7.3) Further correcting a classification or duty rate error helps ensure fair competition and prevent market distortion in a competitive business environment. Allowing one entity a tax advantage over others (which in this case is 7.5%) gives it a massive cost advantage and creates an uneven playing field, leading to price undercutting and reduced market share for competitors. This not only distorts the market but also impacts public revenue. 7.4) Further in the indirect tax regime, unlike that of direct taxes where the tax is both paid and borne by the assessee, the incidence of tax is borne by the final consumer or recipient of goods or services and not by the primary manufacturer/ trader/ service provider who collects and deposits the tax to the government account. Thus, correcting a wrong classification and rate of duty may only lead to a temporary difficulty for the primary taxpayer as he has the benefit of setting off the duty against the credit accumulated due to a lower tax out flow on the final product and further of passing on the tax burden downstream. 7.5) Hence a healthy ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant company) who instructed him to file the bill of entry under CTH3812 3990 even after he brought it to his notice that the HS code of the product mentioned in the certificate of origin issued by China Chamber of international commerce was 151800. Statutory requirements under section 46 of the customs act mandate the importer to make true declaration in the BoE. Hence the importer had willfully misstated the customs tariff heading in order to avail lower rate of customs duty. The appellant on the other hand has stated that the issue of the classification with respect to the impugned imports came to the knowledge of the department on two occasions. Firstly, when the second consignment i.e. BoE No 4230263 dated 01.12.2017 was assessed provisionally and for the second time when the BoE No 8854412 dated 14.11.2018 was assessed finally after raising queries about the same issue of classification. The question of their providing factually incorrect data was false and is a wild allegation. Hence the question of suppression mis-declaration etc., does not arise. 8.2) The question before us is whether the importer acted dishonestly and in a non-bonafide manner while making the self-ass....