TaxTMI 
TaxTMI 
2025 (6) TMI 1855
X X X X Extracts X X X X
X X X X Extracts X X X X
....de from Bovine Bone protein. Later, the assessee proposed to manufacture collagen peptides from fish protein. Accordingly, fish protein obtained by decalcification of fish scales were imported from countries like China and Japan. From around April, 2016 however, imports were also made of the same product from countries like Indonesia. It is significant to state that the imports in question were made under cover of advance authorizations that were obtained by the assessee from the Directorate General of Foreign Trade [DGFT] under the scheme of advance authorization introduced by the Government of India to encourage and promote exports from India. The advance authorization scheme enables duty free import of inputs/raw materials required for manufacture of export goods. The application for an advance authorization is to be made to the DGFT, and after verification of the details of export products, details of imported items required for the manufacture of export products, the manufacturing process and the details of indigenous items required for manufacture of export products, the DGFT issues the advanced authorization specifying the description of items permitted for imports, quantity....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be confiscated on account of the suppression of the correct description of the goods and for misdeclaring the same. The confiscated goods were however allowed to be redeemed on payment of redemption fine, and penalties under Sections 112(a), 114A and 114AA of the Customs Act, 1962 were also imposed on the assessee. 5. In the appeal preferred by the assessee before the Appellate Tribunal, the Appellate Tribunal framed the following issues for consideration: (i) Whether the imported item is fish protein as declared by the appellant or is it processed/demineralised fish scales at as per the test reports ? (ii) Whether the product is to be classified under chapter heading 0511 9190 based on the description is demineralised fish scales allowed to be classified under chapter heading 3504 0099 as claimed by the appellant ? (iii) Whether the appellant had mis-declared the description of the product in order to claim the benefit of advance authorization ? (iv) Whether the appellant had made any willful mis-declaration of the description of the goods which attracted invocation of extended period under the provisions of the Customs Act, 1962 which warran....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Sridharan, the learned senior counsel assisted by Sri. Dhananjay Sethuraj, the learned counsel appearing on behalf of the assessee and Sri. R. Harishankar, the learned Standing Counsel appearing on behalf of the Revenue. 9. On a consideration of the rival submissions, we find that the question that essentially arises for consideration is whether, on the facts of the instant case, a mis-description of the inputs imported under cover of an advance authorization is really relevant for the purposes of levy and collection of import duty under the Customs Act read with the Customs Tariff Act. It is significant that under the Foreign Trade (Development and Regulation) Act, the issuance of advance authorization and monitoring of the imports effected under cover of such advance authorization is within the regulatory jurisdiction of the DGFT. In the instant case, the authorities entrusted with the administration of the advance authorization scheme do not have a case that there was a breach of any of the conditions of the advance authorization issued to the assessee. That apart, we note from the provisions of the Foreign Trade Policy, 2009 to 2014 issued by the Central Government under Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the assessee at the time of import of the product under the advance authorization scheme to be in breach of the terms and conditions of the advance authorization, the stand of the Revenue that the assessee would lose the benefit of the notification in question, cannot be accepted. It is relevant in this connection to notice the judgment of the Supreme Court in Titan Medical Systems Pvt. Ltd. v. Collector of Customs, New Delhi - [2003 (151) E.L.T. 254 (SC)] where in almost identical circumstances, where the customs authorities had demanded a differential duty alleging a mis-representation of facts to the licensing authority, the Supreme Court, while rejecting the said contention, found as follows: "As regards the contention that the appellants were not entitled to the benefit of the exemption notification as they had misrepresented to the licensing authority, it was fairly admitted that there was no requirement, for issuance of a licence, that an applicant set out the quantity or value of the indigenous components which would be used in the manufacture. Undoubtedly, while applying for a licence, the appellants set out the components they would use and their value. Howeve....