TaxTMI 
TaxTMI 
2026 (2) TMI 195
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....ber Latex Concentrate' in liquid form under the trademark EXCEL TEX-D from M/s. Kuala Lumpur Kepong Berhad, Malaysia by classifying the same under CTH 4001 2910 attracting BCD @ 20% vide Sl. No. 491 of Notification No. 21/2002 Cus dated 01.03.2002. However, it appeared to the audit team that the goods were correctly classifiable under CTH 40011020 attracting BCD @ 70% as it appeared that all natural rubber latex is predominantly obtained from rubber tree which is botanically known as Heavea Brazilinsis and in order to merit classification under the Heading 'Hevea' the product should be in a form other than liquid i.e. in the form of strip, sheet etc.. After due process of law, the Ld. Commissioner of Customs rejected the classification adopted by the appellant and reclassified the goods under CTH 40011020 and confirmed the short-paid customs duty of Rs.92,18,355/- along with interest for the period April 2011 to March 2012 and imposed equal penalty under section 114A of the Customs Act, 1962. Hence the present appeal. 3. The learned Advocate Shri S. Muthuvenkataraman appeared for the appellant and Ld. Authorized Representative Smt. O.M. Reena appeared for the respondent. 3.1 ....
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....r identical goods, under the identical description, under identical documents, from identical suppliers have been classified in respect of about 59 BE's under CTI 4001 2910 as Hevea, were not reviewed. The same practice was followed by the appellant while self-assessing the goods under the 5 impugned BE's. The facts were fully known to the department and hence there is no suppression of fact involved. The demand under extended period as per section 28(4) is untenable and is barred. K. Even otherwise claiming a classification under a mistaken, but genuine (bona fide) belief is not an offence. He relied on the following judgments: i. In Shree Ganesh International Vs Commissioner of C.Ex Jaipur - 2004 (174) ELT 171, [Declaration in BE based on foreign suppliers documents not mis declaration under Section 111(m), therefore confiscation of goods or imposition of penalty not warranted]. ii. In Hindustan Lever Ltd. Vs CCC, Bombay - 1996 (83) ELT 520, [Claiming classification and exemption under a heading later revised by Customs does not constitute misdeclaration under Section 111(m)]. iii. Super Electronics Vs Collector of Customs 2003( 153) ELT 254 SC; Tata....
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....eets 4001 2200 -- Technically Specified Natural Rubber (TSNR) 4001 29 -- Others 4001 2910 --- Hevea 4001 2920 --- Pale Crepe 4001 2930 --- Estate Brown crepe 4001 2940 --- Oil Extended Natural Rubber 4001 2990 --- Other 4001 3000 - Balata, Gutta-percha, Guayule, chicle and similar natural gums 6. We find that the appellant has raised strong grounds for the SCN issued in this case being time barred. The dispute relates to the period from 01.04.2011 to 31.03.2012, while the SCN seeking to demand duty is dated 09.03.2015, hence it has been issued beyond the normal period of 1 year. As regards a decision on the classification of the goods on merits, it has been held by the Hon'ble Allahabad High Court in Commissioner Customs, Central Excise & Service Tax Vs M/S Monsanto Manufacturer Pvt. Ltd. [2014 (35) STR 177 (ALL)], after citing the Hon'ble Supreme Court's judgment in State Bank of India Vs B.S. Agricultural Industries [AIR 2009 SUPREME COURT 2210], that once it is held that the demand is time barred, there would be no occasion for the Tribunal to enquire into the merits of the issues. Further the Hon'ble Sup....
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.... First Schedule to the Customs Tariff Act, 1975, for legal purposes, classification of imported shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to Rule 2 to 6 of the GIR. Thus Rule 1 of the GIR provides that the classification of goods shall be determined according to the terms of the headings of the tariff and any relative Section notes or Chapter notes. Rules 2 to 6 provide the general guidelines for classification of goods under the appropriate sub-heading. Hence in the event that the goods cannot be classified solely on the basis of GIR 1, and if the headings and legal notes do not otherwise require, the remaining Rules 2 to 6 may then be applied in sequential order. We find that tariff heading 4001 2910 makes a specific reference to 'Hevea' under the heading 'Natural rubber in other forms'. Hence there could have been genuine divergence of views involving interpretation of law on the classification of the goods between the appellant and revenue. 8. Further the impugned order states that none of the 5 Bills of Entry have been assessed by the departmen....
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....ssed BE's through the "Bill of Entry (Electronic Declaration Regulations), 2011", published in the Official Gazette on 25.11.2011 [which was issued in supersession of the "Bill of Entry (Electronic Declaration) Regulations, 1995"], and incorporated the changes made in the Finance Act 2011. 10. As per the Annexure to the SCN extracted above, it is seen that two BE's were filed prior to the enactment of the Finance Bill 2011 and all BE's were filed before the publication of the Bill of Entry (Electronic Declaration Regulations), 2011 in the Official Gazette. It is perturbing to note that the rival sides have not brought out the factual time lines, as noted above, ushering in the change in law on assessment which is so critical in understanding and deciding the issue. They have thus not been of help to this Bench in finding out the truth, and help administer justice with fairness and impartiality. This laxity in presenting facts is also observed in that while the Ld. A.A. records that none of the 5 impugned BE's were assessed by the department and the appellant speaks of the said 5 BE's carrying identical description etc as in the 59 BE's that preceded them and were assessed by the....
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....reference to the 59BE's, it cannot be said that revenue was not aware that the appellant was importing Rubber latex concentrate with the dry rubber content being 60% and of Hevea origin, when the departmental officers themselves have assessed and cleared at least two such consignments with the same description before the self-assessment regime came into force. Further the 5 BE's though carrying a partial change in description show the Dry Rubber Content (DRC) as 60% and the goods have not been shown by revenue to be different from the 59 BE's filed earlier. 12. Although we have noted our dissatisfaction with the manner in which the rival parties have presented the factual matrix, we observe that the impugned order places particular emphasis on the importer-appellant's status as an ACP client. It is pertinent to record that the erstwhile ACP scheme has, with effect from 23.08.2011, been subsumed into the Authorized Economic Operator (AEO) programme. The underlying objective of both schemes is to extend assured facilitation to importers who possess a consistent record of compliance and fulfil the prescribed eligibility criteria. Such accreditation is conferred only upon select imp....