TaxTMI 
TaxTMI 
2026 (10) TMI 255
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..... 185 thereof. The importer also used the MEIS licenses bearing number 6519161989 dated 26.03.2019, 0519162314 dated 27.03.2019 and 0519164148 dated 09.04.2019 for payment of BCD at the rate of 7.5 per cent and SWS on BCD at the rate of 10 per cent of BCD totally amounting to Rs. 2, 10,676.90. In addition the importer paid IGST at the rate of 18 per cent amounting to Rs 4, 97,581 against notification no. 01/2017 dated 28.06.2017 S.no. 40 of Scheduled III. 1.1 During the scrutiny of documents as were uploaded on Esanchit, it was observed that the CTH of the imported goods in certificate of origin dated 30.09.2019 issued by China Counsel for Promotion of International Trade, (Nanjing) was mentioned as 2106909090 as different from the one as was mentioned in the Bill of Entry (29161590). In the said Bill of Entry the importer had declared the imported goods as 'DHA Algae Oil' and classified the same under CTH 29161540. Opining it to be a case of misdeclaration that the consignment was put on hold and under preventive check for 100% examination which was conducted by SIIB officers under Panchanama dated 23.10.2019 in presence of the representative of the importer/ Gcard holder of th....
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....osed upon the appellant except that the original adjudicating authority has refrained from imposing penalty under Section 114AA of the Act. Being aggrieved of the said order, the appellant is before this tribunal. 2. We have heard Ms. Eesha Shonak and Mr. Kartik Bhardwaj, Advocates for the Appellant and Mr. Shiv Shankar, Authorized Representatives of the Department. 3. Learned counsel for the appellant has submitted that the dispute is on the fact of description of the goods as well as the classification given by the Importer. The COO Certificate no 19C320101534/00021 dated 30.09.2019 issued by the China Council for the Promotion of International Trade (Nanjing) classified the good under CTH 2106909090 whereas the subject Bill of Exchange (BOE) classified it as CTH 291616590. Because of the difference in classification, the subjects goods were sent for Preventive Check for 100% examination. Subsequent to examination of the imported goods by the SIIB Officers under Panchama dated 23.10.2019, the goods were sent to bonded warehouse under Section 49 of the Customs Act 1962 ("the Act") on account of mere apprehension that there might be a mis-declaration in BOE, the same were sei....
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....llowed. 4. While rebutting the said submissions Learned DR appearing for the department has submitted that the importer has classified the imported goods as unsaturated acyclic monocarboxylic acid/fatty acid. However, the sample examination report thereof concluded the goods to be algae oil, a kind of vegetable oil instead of being a pure fatty acid and thus is rightly classifiable under CTH 15159099 as claimed by department instead of CTH 29161590 as was declared by the appellant. It is submitted that even if the imported goods has DHA but the oils with DHA from plant sources have historically been classified under chapter 15 only hence, it is rightly held in the impugned order that the goods were mis-declared by the appellant. The initial certificate of country of origin had a different CTH then the one declared by the appellant. It is submitted that the department has rightly followed the general rules of interpretation. Rule 1 thereof maintains the primacy of the chapter notes. 5. Learned DR has relied upon the decision of Hon'ble Supreme Court in the case of Welkin and also on the decision in this tribunal M/s Kisan Kraft Machine Tools Pvt Ltd vs Commissioner of Customs ....
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....getable oils, namely the following: cardamom oil, chillies or capsicum oil, turmeric oil, ajwain seed oil, niger seed oil, garlic oil 1515 90 40 --- Fixed vegetable oils of edible grade namely the following . mango kernel : Oil, mahua oil, rice bran oil --- Other : 1515 90 91 --- Edible grade 1515 9099 --- Other (ii) CTH 2916 2916 Unsaturated acyclic monocarboxylic acids, cyclic monocarboxylic acids their anhydrides, halides, peroxides and peroxides and peroxyacids their halogenated, sulphonated, nitrated or nitrosated derivatives - Unsaturated acyclic monocarboxylic acids, their anhydydrides, peroxides peroxyacids - their derivatives : 2916 11 00 -- Acrylic acid and its Salts 2916 12 -- Esters of acrylic acid 2916 12 10 --- Butyl acrylate 2916 12 90 --- Other 2916 13 -- Methacrylic acid and its salts: 2916 13 10 --- Methacrylic acid 2916 13 20 --- Salts of methacrylic acid 2916 14 00 -- Esters of methacrylic acid 2916 15 -- Oleic, linoleic or linolenic acids, their salts and esters: 291....
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....tion of incomplete or unfinished goods. Clarifying that as long as the essential character of the complete or finished article is ovious from the goods as presented at the time of importation the classification of complete article shall be applied. Similarly, it shall apply to the un-assembled or disassembled goods. GRI 2 (b) thereof deals with the mixtures consisting of different materials or substances; consisting of two parts. Number 1. A reference in the heading to a material/substance shall be taken to include a reference to mixtures or combinations of that material or substance. This part does not talk about the finished goods made of materials and substance. Number 2. Goods of a given material or substance mentioned under any heading of a tariff and a reference to goods consist wholly or partly of such materials or substance. This part does not deal with the composite goods made. 10. GRI 3 is the rule which acts as a tie breaker in case where goods prima facie are classifiable under two or more headings. According to this rule the heading with a more specific description of goods is preferred to a heading with more general discrimination of goods. Sub cl....
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....ts mainly of triglycecids and fatty acids make up almost their entire structure. A fatty acid composition analysis shows that removing fatty acids means the substance is no longer a fat or oil. Thus, every oil has fatty acid, the specific mix varies. 14. At this stage we observe that the investigation in the present appeal has placed reliance on the technical writeup, in respect of imported good/ DHA algae oil as available on the website of US food administration. According to which DHA algae oil is a member of fatty acid family belonging to omega 3 poly unsaturated fatty acid family which are edible oil rich in Docosahexaenoic Acid (DHA). These are produced using algae species as raw material. Through processes including bio-fermentation, separation and purification. DHA otherwise contains 22 carbon and 6 table bonds, giving it an unstable structure and properties. The main source of DHA are fish oil in addition to algae oil. In fish oil DHA exist in the form of Ethyl Easters whereas in algae oil it exist in the form of Trilaurin. The only difference about DHA algae oil and DHA fish oil is that algae oil is derived from pure natural plant sources and is free from fishy odour an....
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....nd use of a product is generally irrelevant for classification unless the Tariff entry explicitly mentions it. Since chapter heading 2916 excludes oleic acid of purity of less than 85 % and other fatty acid of purity less than 90 % as already observed above, the imported good in question cannot match classification under chapter 29 of the tariff act as has been claimed by the appellant. Chapter 29 would cover products of chemical and allied industries whereas natural oil would of course be containing fatty acids in varying proportion. Otherwise also the identity of algae oil is because of its origin from plant and containing natural omega 3 fatty acid and not that it was a result of some chemical process. 18. From the discussion about the imported product in question, we hold that in terms of GRI Rule 1 of Tariff headings of chapter notes, the specific entry for edible oil is under CTH 1515. Merely because one of the constituent of the imported good/ DHA algae oil is linolenic acid or the product is the defined chemical organic compound it cannot fall under CTH 2916 which otherwise doesn't fulfill the criteria of GRI Rule. The chapter heading/tariff heading of 2916 and even of C....