TaxTMI 
TaxTMI 
2025 (3) TMI 132
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....ported one consignment of gas oil/automotive diesel oil, by mis-declaring the imported goods as 'mixed hydrocarbon oil', the imported goods covered under B/E No. 4226990 dated 17.01.2023 were put on hold. Subsequently, the goods covered under the subject B/E were examined under Panchnama dated 27.01.2023 and ten representative samples of imported goods were drawn by NSPU from each of the ten containers of imported consignment. These samples were forwarded to the Joint Director, Central Revenue Control Laboratory (CRCL), NCH, Mumbai vide letter dated 30.01.2023 with a request to test and chemically analyze the samples of imported goods on the following parameters:- (i) Whether the sample under reference meets the IS standard of Solvent (IS 1745), Motor Gasoline (IS 2796, IS 17021 or IS 17076), Aviation Gasoline (IS1604), Kerosene Intermediate, Kerosene (IS 1459), Aviation Turbine Fuel (IS 1571), Gas Oil (IS-17789), Vacuum Gas Oil (IS17792), Light Diesel Oil (IS 15770), Automotive Diesel Fuel (IS 1460), High Flash High Speed Diesel (IS 16861) or waste oil. (ii) Overall chemical composition including Sulphur, Cetane no. & oxygen and physical composition of the sample....
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.... confiscation under Section 111(d), 111(m) ibid and offering an option to redeem the goods for reexport upon payment of a redemption fine of Rs.6,00,000/-under Section 125 ibid and imposed penalty of Rs.4,00,000/- on the appellants-importer under Section 112(a) ibid. In an appeal filed by the appellants against such original order dated 20.04.2023, the Commissioner (Appeals) had upheld the order of the original authority and rejected the appeal by the appellants. Feeling aggrieved with the said Order-in-Appeal dated 13.09.2023, which is impugned herein, the appellants have filed this appeal before the Tribunal. 3.1. Learned Advocate for the appellants submitted that the imported goods were duly examined by the jurisdictional Customs authorities who had also drawn representative samples of such goods and subjected the same for testing. By relying upon the CRCL test reports of such goods which clearly stated that the imported samples did not meet the requirements of IS 1460- IS standard prescribed for Automotive Diesel Oil, and that these are mixture of 'Mineral Hydrocarbon Oil', clearly proved that the appellants-importer have correctly declared the imported goods. However, the adj....
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....the appellants and the learned Authorized Representative of the Department and perused the case records. 6. The dispute between the appellants-importer and the department lies in the correct classification of imported goods and thereafter applicability of the relevant import conditions prescribed under ITC-HS policy of FTP. The appellants has declared the goods as 'Mixed Hydrocarbon Oil' by classifying it under Customs Tariff Item (CTI) 27011990,whereas the department had contended that the said goods are classifiable as 'Automotive Diesel Fuel falling under CTH27101944, of the First Schedule to the Customs Tariff Act, 1975, which is restricted for import as specified in ITC-HS. 7. Before we consider the submissions made by both sides, it is important to note that the undisputed facts with the respect to the factual matrix of the case are as follows: (i) All the representative samples of imported goods contained in ten containers have been tested and the test results obtained; (ii) The test reports of CRCL laboratory had given the overall composition of the goods and specific report as to whether such goods confirm to the IS standards prescribed for Solvents, Moto....
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....ssment made under Section 17(1) of the Customs Act, 1962 with respect of Bill of Entry No. 4226990 dated 17.01.2023 and the declared goods as "Mixed Hydrocarbon Oil for Industrial Use". (ii) I order for reassessment of the impugned goods covered under Bill of Entry No. 4226990 dated 17.01.2023 under section 17(5) of the Customs Act, 1962. 1 order re-classification of the goods under CTH 27101944 with amendment in description as "Automotive Diesel Fuel". (iii) I confiscate the goods imported vide B/E No. 4226990 dated 17.01.2023with total declared value of Rs. 69,61,664/-(Rupees Sixty Nine lakhs Sixty One thousand Six hundred Sixty Four only) under Section 111(d) & Section 111(m) of the Customs Act, 1962. However, I give an option to the importer to redeem the goods for re-export on payment of Redemption Fine of Rs. 6,00,000 (Rupees Six Lakhs only) under Section 125 of the Customs Act, 1962. If the redemption fine is not paid within 120 days of the issue of this Order, the option given for redemption shall become void in compliance of Section 125(3) of the Customs Act, 1962, unless an appeal against this order is pending. Reexport is allowed subject to non-availment of any exp....
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....opinion that the subject mixture would classified under CTI 27101944 of the ITC (HS), the same is canalized for specific importers as mentioned in condition No. 5 of Chapter 27 of the ITC (HS)" 9.1 In terms of the legal provisions under Section 2(2) and Section 17 ibid, the phrase "assessment" would mean determination of the dutiability of imported goods including inter alia in arriving at the appropriate tariff classification of such goods as determined in accordance with the provisions of the Customs Tariff Act, 1972. Further, in order to address the above issue of classification of imported goods, we would like to refer the relevant legal provisions contained in Section 12 of the Customs Act, 1962; the Customs Tariff Act, 1975 and rules framed thereunder for consideration of proper and appropriate classification of the subject goods under dispute. "Section 12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, In....
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....ws: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they....
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....y relates shall be charged on the basis of the value of the goods as defined in section 14 of the Customs Act, 1962 (52 of 1962), the duty being equal to such percentage of the value as is indicated in that column. 3. In any entry, if no rate of duty is shown in column (5), the rate shown under column (4) shall be applicable. ADDITIONAL NOTES In this Schedule,- (1) (a) "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all subheadings of tariff items the first four-digits of which correspond to that number; (b) "sub-heading", in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number; (c) "tariff item" means a description of goods in the list of tariff provisions accompanying eight digit number and the rate of customs duty; (2) the list of tariff provisions is divided into Sections, Chapters and SubChapters; (3) in column (3), the standard unit of quantity is specified for each tariff item to facilitate the collection, co....
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....artment and the appellants. The dispute in classification therefore lies in the very narrow compass of analysis of the two entriesof the Customs Tariff items under which the impugned goods are to be coveredas per the facts of the case,forproperly classifying the impugned product. Now, we may closely examine the scope of the contending classification for determining correct classification of the imported goods. "CHAPTER 27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes NOTES : 1. This Chapter does not cover: .... 2. References in heading 2710 to "petroleum oils and oils obtained from bituminous minerals" include not only petroleum oils and oils obtained from bituminous minerals but also similar oils, as well as those consisting mainly of mixed unsaturated hydrocarbons, obtained by any process, provided that the weight of the non-aromatic constituents exceeds that of the aromatic constituents.... xxx xxx xxx xxx SUPPLEMENTARY NOTE : In this Chapter, reference to any standard of the Bureau of Indian Standards refers to the l....
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....nbsp; xxxxxx 2710 19 -- Other: --- Gas oil and oils obtained from gas oil: 2710 19 41 ---- Gas oil 2710 19 42 ---- Vacuum gas oil 2710 19 43 ---- Light diesel oil conforming to standard IS 15770 2710 19 44 ---- Automotive diesel fuel, not containing biodiesel, conforming to standard IS 1460 xxx xxx xxxxxx 2710 19 90 --- Other xxx xxx xxxxxx" 9.4 From plain reading of the above tariff extract, it transpires that in order to determine the classification of the goods, particularly in respect of the goods specified in Supplementary Note 1 to Chapter 27, Natural Gasoline Liquid (NGL), Superior Kerosine Oil (SKO), Aviation Turbine Fuel (ATF),High Speed Diesel (HSD), Light diesel oil (LDO) etc. are required to fulfil the characteristics of goods as per the Standard of Measures ....
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....l fuel (IS:1460), High flash high speed Diesel(IS: 16861) and Waste Oil." From the above specific report of the samples of the impugned goods, it transpires that the imported goods under dispute are mixture of hydrocarbon oil, though containing diesel fraction, does not fulfil the standard requirements as specified under IS:1460:2005 to be considered as Automotive Diesel Fuel. In view of the above specific factual record establishing that the classification of impugned goods cannot be categorised under CTI 2710 1944, inasmuch as these goods do not fulfil the criteria mentioned for Automotive Diesel Fuel as per IS:1460:2005, the conclusion arrived at in the original order and which is confirmed in the impugned order, by the authorities below does not stand the scrutiny of law. 10.1 We also find force in the argument advanced by the learned Advocate for the appellants that statements given by the appellantsimporter alone cannot form the basis to confirm the charge of misclassification and to re-classify the goods from 'Mixed Hydrocarbon oil' to 'Automotive Diesel Fuel'. The law is well settled in these matters as the Hon'ble Supreme Court in the case of H.P.L. Chemicals Limi....