2005 (4) TMI 387 - AT - Customs

Summary

Issues:
1. Confiscation of imported goods under Customs Act, 1962.
2. Classification of goods as Vitamin E or animal feed supplement.
3. Compliance with Notification 40/2002-Cus and Notification 9/96-Cus.
4. Misdeclaration of goods and liability to penalty.

Confiscation of Imported Goods:
The case involved the confiscation of goods imported from Nepal by Sonam, which were claimed to be poultry feed supplement but found to be Vitamin E with high ash content. The Joint Commissioner ordered absolute confiscation and imposed a penalty, which was upheld by the CC (Appeals). However, the Tribunal found that misdeclaration was not proven, and the goods were correctly classified as animal feed supplements under Heading 23.09 of the Tariff. The Tribunal ruled that there was no basis for confiscation or penalty under the Customs Act, 1962.

Classification of Goods:
The Tribunal analyzed the nature of the imported goods and their purity levels. It was established that the goods were Vitamin E adsorbed on inorganic material carriers, not meeting the purity requirements under Heading 29.36 but falling under the classification of animal feed supplements under Heading 23.09. The decision was supported by relevant Circulars and legal precedents, emphasizing the importance of purity levels in classification.

Compliance with Notifications:
The case also addressed compliance with Notification 40/2002-Cus and Notification 9/96-Cus regarding the classification and import of goods. The Tribunal found that the manufacturing process in Nepal resulted in a change in classification from the third country of origin, which aligned with the conditions stipulated in the notifications. Therefore, the goods were deemed to be in conformity with the notifications, and the benefit of duty exemption was upheld.

Misdeclaration and Penalty:
The Tribunal concluded that since misdeclaration was not established, there was no basis for absolute confiscation or penalty under the Customs Act, 1962. Upholding the duty exemption benefit and finding no grounds for penalty, the Tribunal allowed the appeals, setting aside the previous orders for confiscation and penalty. The judgment highlighted the importance of accurate classification, compliance with notifications, and the lack of evidence to support misdeclaration or penalty imposition.