2014 (9) TMI 997 - AT - Customs

Waiver of pre deposit - Mama s Best India Chocolate - classification under CTH 19019090 or under CTH 21069099 - products consists of skim milk powder (64.7%) Lactose (15.2%) Sucrose (12%) Coco powder (2.5%) oligofructose (FOS) (2.2%) minerals and vitamins. - Held that - As per the constitution of the impugned goods 2/3rd of the product consists skim milk powder. Therefore prima facie there is merit in the contention of the appellant that it is a food preparation based on the headings of 0401 to 0404 the cocoa contents being less than 5% by weight. Thus it appears that CTH 1901 is more specific to the goods under importation compared to CTH 2106 which is a residuary entry for food preparations not elsewhere specified or included. We further notice even if the product is held to be falling under CTH 2106 the appellant would be eligible for the benefit of Notification No.75/2005-Cus and 2/2011-CE since the product is of Singapore origin and is a food mix. Therefore the benefit of these notifications would be available. If the benefit is extended then it can be seen that the appellants have discharged excess duty liability than what is due. In these circumstances the appellant has made out a strong case for waiver of pre-deposit. - Stay granted.

Issues involved:
Classification of products under Customs Tariff Heading (CTH) 19019090 or CTH 21069099, imposition of penalties under Sections 114A, 14AA, 112(b), and 114AA of the Customs Act, 1962, invocation of extended period, eligibility for benefit of Notifications No. 75/2005-Cus and 2/2011-CE, waiver of pre-deposit, stay of recovery during appeal.

Classification of products under CTH 19019090 or CTH 21069099:
The appeal challenged the order confirming a Customs duty demand on the appellant for classifying the products "Mama's Best India Chocolate" under CTH 21069099 instead of CTH 19019090. The appellant argued that since the product primarily consists of skim milk powder, it should be classified under CTH 19019090 as a food preparation not containing cocoa. The appellant contended that CTH 1901 was more specific to the goods compared to CTH 2106, which is a residuary entry for food preparations not elsewhere specified. The Tribunal found merit in the appellant's argument and granted unconditional waiver from pre-deposit and stayed recovery during the appeal for both the main appellant and the co-appellant, the Clearing House Agent (CHA).

Imposition of penalties under Customs Act:
The adjudicating authority had imposed penalties under Sections 114A, 14AA, 112(b), and 114AA of the Customs Act, 1962. The appellant challenged these penalties, arguing that there was no mis-declaration as all ingredients were clearly declared on the packages. The Tribunal considered the submissions and granted waiver of pre-deposit, indicating that the appellant had made a strong case for the same.

Invocation of extended period and eligibility for benefit of Notifications:
The appellant contested the invocation of the extended period, claiming it was unwarranted as the goods had passed through Customs and all ingredients were declared. Additionally, the appellant argued for the benefit of Notifications No. 75/2005-Cus and 2/2011-CE, stating that even if the product fell under CTH 2106, they would be eligible for concessional duty benefits due to the product's origin and nature. The Tribunal agreed with the appellant's contentions and granted waiver of pre-deposit and stay of recovery during the appeal process.

In conclusion, the Tribunal ruled in favor of the appellant, granting unconditional waiver from pre-deposit and staying recovery of the dues during the pendency of the appeal for both the main appellant and the co-appellant. The decision was based on the classification of the products under CTH 19019090, the eligibility for concessional duty benefits, and the absence of mis-declaration on the part of the appellant.

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