TaxTMI 
TaxTMI 
2026 (5) TMI 382
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.... duty with interest and penalty. Thereafter a corrigendum is issued on 09.08.2021 proposing amendment of differential duty under Section 28(4) of the Customs Act, 1962. Adjudication authority confirmed the demand along with interest and imposed penalty under order-in-original dated 28.10.2021 and when an appeal was filed before the Commissioner (Appeals), it was dismissed vide impugned order dated 05.01.2023. Aggrieved by said order, present appeal is filed. 3. When the appeal came up for hearing, the Learned Counsel for the Appellant submits that the classification of goods under Customs Tariff Heading (CTH) 1806 9090 as per impugned order is prima facie unsustainable, since the Adjudication /Appellate authority has not considered the submissions made by the Appellant while replying to the show cause notice. In this regard, Learned Counsel submits that the description of the goods for Customs Tariff Heading (CTH) 33021016 as per Customs Tariff Act, 1975 is as under:- MIXTURES OF ODORIFEROUS SUBSTANCES AND MIXTURES (INCLUDING ALCOHOLIC SOLUTIONS) WITH A BASIS OF ONE OR MORE OF THESE SUBSTANCES. OF A KIND USED AS RAW MATERIALS IN INDUSTRY: OTHER PREPARATIONS BASED ON ODO....
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....on as food. Therefore, the said imported product cannot be considered as "Chocolate and other Food Preparation containing Cocoa". Chapter 18 of the Customs Tariff Act 1975 covers "Cocoa and Cocoa Preparations" and Chapter Heading 1806 covers "Chocolate and other food preparations containing Cocoa". Customs Tariff Heading (CTH) 180690 i.e., "Others" is a residuary heading under Chapter Heading 1806 and the sub-headings under this category are as below:- 18069010 Chocolate and Chocolate Products 18069020 Sugar Confectionary Containing Cocoa 18069030 Spreads Containing Cocoa 18069090 Other Further, the Chapter Notes under Chapter 18 reads as under:- 1. This Chapter does not cover the preparations of Heading Nos. 0403, 1901, 1904, 1905, 2105, 2202, 2208, 3003 or 3004 2. Heading No 1806 includes sugar confectionary containing Cocoa and subject to Note 1 to this Chapter, other food preparations containing cocoa. 5.1 A harmonious reading of the description of goods under Customs Tariff Heading (CTH) 18069090 and the relevant Chapter Notes enjoins that in order to classify an imported product under Customs Tariff Heading (CT....
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....y be confined to its grammatical or ordinary parlance, but it should also be construed in the light of the context. This Court reiterated that the expression should be construed in a manner in which similar expressions have been employed by those who framed relevant notification. The Court emphasised the need to derive the intent from a contextual scheme. In this case, therefore, it is necessary to endeavour to find out the true intent of the expressions "food products and food preparations" having regard to the object and the purpose for which the exemption is granted bearing in mind the context and also taking note of the material or common parlance meaning by those who deal with those goods, of course bearing in mind, that in case of doubt only it should be resolved in favour of the assessee or the dealer avoiding, however, an absurd meaning. Bearing the aforesaid principles in mind, in our opinion, the revenue is right that the non-alcoholic beverage bases in India cannot be treated or understood as new 'nutritive material absorbed or taken into the body of an organism which serves for the purpose of growth, work or repair and for the maintenance of the vital process' a....
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....ng to and considering the aforesaid material." 11. As regards confirmation of demand by invoking the extended period of limitation, the learned counsel submits that as per Section 47 of the Customs Act, 1962, clearance of imported goods is allowed for home consumption. This has remained the same under assessment by the proper officer of Customs as well as self-assessment by the importer. Thus, even under the self-assessment as per Section 47, the proper officer of Customs issuing 'Out of Charge (OOC) is required to satisfy himself about nature of the goods i.e., whether prohibited or not, duty assessed which includes classification and valuation (based on the documents uploaded in ICEGATE) and any other charges payable under the Customs Act, 1962. Thus, if the proper officer is not satisfied about the classification or any other aspect pertaining to the self-assessment, he can deny clearance of goods for home consumption. Thus, even if the Appellant submitted the entire details related to the goods imported by the Appellant while filing the Bill of Entry and merely if the goods imported are cleared under RMS, no allegation can be made of suppression regarding classification ....
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.... subject to Note 1 to this Chapter, other food preparations containing cocoa. The Chapter notes or Section notes do not provide for any specific conditions such as the product under this chapter are meant for direct consumption. Thus, when there is a proper Customs Tariff Heading (CTH) 18069090 for classification of 'chocolate and other food preparations containing cocoa', the appellant cannot resort to some other Customs Tariff Heading (CTH) on the grounds that the impugned goods are not food preparations containing cocoa meant for direction consumption. Learned AR further submits that on plain reading of the above description and chapter notes, it is evident that to qualify for classification under Customs Tariff Heading (CTH) 33021010, the goods should be synthetic flavouring essence' and also this Chapter 33 excludes vegetable extracts (plant based products). Further, the expression 'odoriferous substances' in heading 3302 refers only to the substances of heading 3101 (essential oils etc.,). In the instant case, the appellant has classified the impugned goods as 'chocolate flavor' (mixtures of odoriferous substances and mixtures) or synthetic essence under C....
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....RI rules, and statutory notes instead of broad reliance on usage or trade terms. As regards Limits on Trade Parlance /Common Meaning, it is held that Trade parlance or commercial usage is secondary and can be used only where statutory language is silent or ambiguous. Further considering the duty liability, it is held that even specially designed items may not qualify for lower duty classification unless they objectively fall within relevant tariff definitions. 15. Heard both sides and perused the records. 16. We find that the Appellant had classified 'Chocolate Flavour' imported vide Bill of Entry No 3489701 dated 02.06.2019 under Customs Tariff Heading (CTH) 33021010 as "mixtures of odoriferous substances and mixtures". On the basis of the Audit observation, the show cause notice (SCN) has alleged that the imported item is a "chocolate flavour" which is extracted from Cocoa, a plant-based product and is classifiable under Customs Tariff Heading (CTH) 18069090 as "chocolate and other food preparations containing cocoa". We find that the harmonious reading of the description of goods under Customs Tariff Heading (CTH) 18069090 and the relevant Chapter Notes reveals tha....