TaxTMI 
TaxTMI 
2025 (8) TMI 728
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....he country. 1.3 Since the products in dispute fall under the category of pesticides, including insecticides, weedicides, fungicides etc., it is a mandatory requirement for the manufacturer to obtain registration under the Insecticides Act, 1968, in order to manufacture and sell the same. Accordingly, the appellants had made applications for registration of their products under Section 9 of the Act of 1968 and obtained the requisite registration certificates under the categories of pesticides and insecticides. 1.4 A new scheme called 'Merchandise Export India Scheme' (MEIS) came to be introduced under Foreign Trade Policy (FTP) 2015-2020 by the Director General of Foreign Trade, Ministry of Commerce & Industry. With the introduction of the aforesaid new scheme, the incentive rate came to be revised based on Harmonized System of Nomenclature (HSN) i.e., for insecticides, fungicides and herbicides of CTH being 380891, 380892 and 380893, respectively, the incentive rate for these items was fixed @ 2% on the FOB value. Similarly, for other pesticides, the relevant CTH being 38089910 or 38089990, the incentive rate was fixed @3% on the FOB value. 1.5 The appellants had classifie....
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....er CTH 38089199/ 38089290/ 38089910/ 38089990 of the Tariff Act; instead of CTH 38086100/ CTH 38086200/CTH 38086900 of the Tariff Act, in terms of subheading note no. 2. It was further alleged that since CTH 38086100 or 38086200 or 38086900 are not covered under Appendix-3B (MEIS Schedule), the products in dispute are not entitled to any benefit under MEIS scheme. 1.10 During the aforesaid investigation by SIIB-JNCH, statement of ShriR.K Shetty, the Director of the appellants' firm was recorded, wherein he had inter alia, stated that the DRI had already issued the SCN for the same products in dispute and they were of the view that the said goods are classifiable under CTH 380891 of the Tariff Act. On the basis of the statement, SIIB-JNCH had verified the issue, whether DRI has dealt with similar issue of mis-classification in the case of the appellants for the same period in dispute, and thereafter, excluded the common shipping bills, which were a part of DRI's SCN. On conclusion of the investigation, the SIIB-JNCH had issued the SCN being No. 1438/2023-24/Commr/CEAC/NSII/ CAC/JNCH dated 28.09.2023 to the appellants, inter alia, demanding the export benefits availed in terms of ....
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....final and binding. It is not in dispute that till date DGFT has not cancelled the MEIS scrips issued to the Appellants. Thus, the present Show Cause Notice is wholly without jurisdiction. Consequently, the Impugned order confirming the show cause notice ought to be set aside. Reliance was placed on the decision of the Hon'ble Supreme Court of India in the case of Titan Medical Systems Pvt. Limited v. Collector of Customs [2003 (151) ELT 254 (SC)], the Hon'ble Delhi High Court in the case of Designco, M/S Amit Exports And M/S Sharma International Versus Union Of India & Ors. [2024 (11) TMI 1150 - Delhi High Court] and on the recent decision of this Hon'ble Tribunal in the case of Bharat Rasayan Ltd v Commissioner of Customs 2024 (5) TMI 281 (Tri-Mum) upheld by Hon'ble Supreme Court 2025 (2) TMI 758. (b) In the present case, the Department admittedly has demanded the recovery of export benefit in terms of Section 28 (4) and/or Section 28AAA of the Act. Both Section 28 (4) and Section 28 AAA of the Act deals with power of the proper officer to recover the import duty wrongly forgone. It does not give power to the proper officer for recovery of the export benefit. Hence, the d....
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....is regard for the same period in dispute vide show cause notice dated 20.10.2020. The same is evident from para 8 of the present show cause notice and Annexure Z as well. However, vide the show cause notice dated 28.09.2023, the Customs authorities again raised the demand on the products under dispute which were not covered by the aforesaid show cause notice dated 20.10.2020 by invoking extended period of limitation by again changing the classification and the same is not permissible in law. The Department was aware that similar proceedings were undertaken in respect of the classification of the products under dispute by the DRI when they issued the first Show cause notice, hence the adjudicating authority erred in confirming the demand raised by the present show cause notice by invoking extended period which is not permissible. Reliance in this regard was placed on the decision of the Hon'ble Supreme Court in the case of Nizam Sugar Factory Vs. Collector [2006 (197) ELT 465 (SC)]. (f) The entire issue regarding availability of the MEIS scrips on the products under dispute is an industry wide issue. Thus, the Customs Department was aware of the ongoing dispute pertaining t....
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....filed during the course of hearing of the appeal. 6. The issues involved in the present appeal for consideration by the Tribunal are as under: (a) Whether the Customs Department can demand export benefit under Section 28 (4) and/or 28AAA of the Act of 1962, when the MEIS scrips have not been cancelled by the DGFT? (b) Whether the export benefit can be demanded by invoking Section 28(4) and /or 28AAA of the Act of 1962? (c) Whether the products in dispute are classifiable under CTH 38089199/ 38089290/ 38089910/38089990 of the Tariff Act, as claimed by the appellants; or under CTH 38086100 or 38086200 or 38086900 of the Tariff Act, as held by the adjudicating authority? (d) Whether the extended period of limitation is invocable, especially considering the facts and circumstances involved in the present case? 7. The present appeal relates to the SCN dated 28.09.2023 issued by SIIB- JNCH for the period January 2017 to December 2019 and the same had been issued by invoking the extended period of limitation. It is the case of SIIB-JNCH that the appellants had wrongfully availed the MEIS scrips by mis-classifying the products in dispute under CTH ....
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....show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellants." 8. We find that the facts of the present case are at a better footing than the case of Nizam Sugar Factory (supra), inasmuch as the SCNs were issued by the officers in DRI and officers in SIIB for the same period in dispute. We also find that officers in SIIB-JNCH themselves, in the present SCN dated 28.09.2023, have accepted that for the same period in dispute relating to same products in dispute, the DRI had already issued the SCN. Such acknowledgement of fact is recorded at paragraph 8 of the SCN dated 28.09.2023, as under: "8. Investigation by DRI Ahmedabad As per the statement of Shri Raghuram Kanyan Shetty, Managing Director of M/s Heranba Industries Ltd, show cause notice issued by DRI, Ahmedabad was checked and it was found that DRI has dealt with similar issue of mis-classification of CTH by the same ex....
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....on of the adjudged demands. In this context, the Hon'ble Supreme Court, in the case of Jaiprakash Industries Vs. Commissioner of C. Ex, Chandigarh - 2002 (146) ELT 481 (SC), have held that extended period cannot be invoked, when the divergent views have been taken by various High Court on the same issue. The relevant paragraph of the judgement is reproduced below: "8. In this case, there was a divergent view of the various High Courts whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture. In view of the divergent views, of the various High Courts, there was a bona fide doubt as to whether or not such an activity amounted to manufacture. This being the position, it cannot be said that merely because the Appellants did not take out a licence and did not pay the duty the provisions of Section 11A got attracted. There is no evidence or proof that the licence was not taken out and/or duty not paid on account of any fraud, collusion, wilful mis-statement or suppression of fact. We, therefore, set aside the demand under the show cause notice dated 3rd May, 1993." 11. We also find merits in the argument placed by the appellants that classifica....
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....er: "108. We are thus of the firm opinion that it would be impermissible for the customs authorities to either doubt the validity of an instrument issued under the FTDR Act or go behind benefits availed pursuant thereto absent any adjudication having been undertaken by the DGFT. An action for recovery of benefits claimed and availed would have to necessarily be preceded by the competent authority under the FTDR Act having found that the certificate or scrip had been illegally obtained. We have already held that the reference to a proper officer in Section 28AAA is for the limited purpose of ensuring that a certificate wrongly obtained under the Customs Act could also be evaluated on parameters specified in that provision. However, the said stipulation cannot be construed as conferring authority on the proper officer to question the validity of a certificate or scrip referable to the FTDR Act." 13. In the present case, since the competent authority under the FTP i.e., the DGFT having not ruled against the appellants' claim for the benefits under MEIS, it would not be open for the Customs authorities to take punitive action against the appellants for denying the benefits ....