TaxTMI 
TaxTMI 
2025 (7) TMI 723
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....2017 and 18th September 2020, the impugned order [order-in-original no: 167/2023-24/Commr/NS-II/CAC/JNCH dated 30th October 2023] confirmed proposals in the show cause notice. 2. The show cause notice, proposing recovery under section 28(4)/section 28AAA of Customs Act, 1962, assailed the claim as erroneous stemming from alleged incorrect classification, as covered by tariff item 3808 9199, in the shipping bills while asserting that, according to sub-heading note 2 to chapter 28 of First Schedule to Customs Tariff Act, 1975, products containing 'bifenthrin (ISO)' were, on the basis of package weight, more appropriately covered by sub-headings 3808 61 to 3808 69. 3. This particular scheme for promotion of exports, notified under the Foreign Trade Policy (FTP) 2015-20 on 1st April 2015, offered monetary support to exporters - manufacturing and service - with emphasis on 'ease of doing business', merged five erstwhile schemes for promotion of exports of manufactured goods and one for services, by securing 'duty credit scrips' to be used for discharge of duty liabilities arising from levy on commodities and services - both domestic, till June 2017, and imported - and as percentag....
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.... Customs Tariff Act, 1975, merited another classification which customs authorities were empowered to substitute by revision of assessment. He relied upon the decisions of the Tribunal in Seaswan Shipping and Logistics v. Commissioner of Customs, Tuticorin [2024 (1) TMI 257 - CESTAT CHENNAI] on invoking of jurisdiction by customs authorities, in Cipra Enterprises v. Commissioner of Customs, New Delhi [2023 (1) TMI 463 - CESTAT NEW DELHI] affirming competence to confiscate goods for misdeclaration and in Fashion Accessories and ors v. Commissioner of Customs, Kandla [2024 (3) TMI 293 - CESTAT AHMEDABAD] affirming parallel jurisdiction under Customs Act, 1962 insofar as schemes under the Foreign Trade Policy (FTP) were concerned. 6. The impugned order has placed elaborate emphasis on sub-heading notes in chapter 38 of First Schedule to Customs Tariff Act, 1975 and so did the arguments of Learned Authorized Representative. We may categorically state that this line of reasoning and resort to legal principle does not impress us as such findings lay bare demonstrated misapplication of customs law to the factual matrix of the dispute. The impugned goods are export consignments and sect....
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.... by presentation of resultant 'scrip', but intended for erasing benefit under export promotion schemes in the Foreign Trade Policy (FTP) accruing from exports and, that too, without any allegation of non-export, of export of questionable quality or at unacceptable value. The 'merchandise export from India scheme (MEIS)' itself has been devised under the authority of Foreign Trade (Development & Regulation) Act, 1992 and administered by licencing authorities designated under the statute with customs assessment and procedures being of peripheral significance save for certification of description and value therein. Its actual deployment, involving altogether different assessment upon importation of goods and for discharging assessed levy thereof by presentation of 'scrip' for attendant exemption from duty to such extent, is an act unknown to the present proceedings. The proceedings, thus beyond the jurisdictional reach of section 28 and section 28AAA of Customs Act, 1962, step into the administrative quarter of the licencing authority to issue 'scrips' by revising details in the shipping bills, viz., the ITC (HS) code therein, already assessed and cleared. The ITC (HS) Code is 'direct....
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....he shipping bill cannot be nullified except in the said circumstances. 14. The role of customs authorities, if at all, may commence only upon presentation of scrips for clearance of exported goods that too in accordance with Notification No. 24/2015-dt. 8.4.2015 issued u/s. 25 of the Customs Act, 1962. Once the scrips are issued and are presented before customs authorities to be debited towards duty liability as assessed, the acceptance thereof is governed by the notification (supra) issued u/s. 25 ibid. This is segregation of jurisdiction, which is implicit in the notification applicable to utilization of scrips on imports of goods. There is, thus, no concurrent jurisdiction over the stages involved between export and import and each stage is governed to the limits of licensing and assessment jurisdiction by the respective statutes. 15. The functions of the licensing authorities and the customs authorities operate in different fields. The function of the licensing authorities is to consider whether any particular item should be allowed to be imported or exported due to various circumstances such as the requirement of the item, the amount of foreign exchange invol....
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....s necessary that the onus of identifying the correct classification as substitute for declared classification rests with the assessing officer/proper officer. Such reclassification is to be undertaken solely for the purpose of conformity with the General Rules for Interpretation and not for any other purpose. Reclassification for any other purpose has no place in adjudication. 17. In view of the discussions made hereinabove, we are of the view that the customs authorities have overstepped its jurisdiction by resorting to re-classification of exported goods and cancelling the MEIS scrips. The same are hereby restored to the appellants. Accordingly the impugned order is set aside and the appeal filed by the Appellant is allowed with consequential relief, if any, in accordance with law.' 10. In re Seaswan Shipping and Logistics, the Tribunal was faced with a dispute in which a 'customs broker' was imposed with penalties under section 114 and section 114AA of Customs Act, 1962 and, in the course of which, the appellant therein had questioned jurisdiction of customs authorities leading to the observation that '6.2 The power to grant the MEIS rewards/benefit being co....
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....cy in the classification heading was pointed out the exporter has paid the excess MEIS benefits claimed. In the era of self-assessment any wrong declaration including that of the classification of the goods which is done deliberately in the Shipping Bill/Bill of Lading for earning undue benefit on export of goods can be examined and penal action taken against all the persons concerned by Customs if so warranted. Such blame worthy acts ultimately affect the payment of Customs and Excise duties through use of freely transferable ineligible scrips, thus defrauding the exchequer. Hence while grant of rewards to the exporter is by the DGFT preventing the leakage of revenue is the concern of Customs. Therefor while the power to grant the MEIS rewards/benefit is conferred on the DGFT authorities, action for violation of specific provisions of law can be taken under both the Acts by the respective authorities.' The correctness of re-determination of ITC (HS) Code or classification according to First Schedule to Customs Tariff Act, 1975 did not lie within the compass of the dispute; merely, the consequence of confiscation under section 113 of Customs Act, 1962 qua person who did not own ....