2019 (4) TMI 1832 - AT - Customs

Classification of imported goods - Capsule of Dry Mix Powder of Soy/Tofu Flaxseed - classified under CTH 12119011/12089000/12119099 of the Tariff Act, 1975 or under CTH 21069099? - appellant submitted that just because Soya is dried, cleaned, powdered and processed, the classification of the subject goods cannot be migrated from Chapter 12 to Chapter 21 of the Tariff Act - Confiscation - redemption fine - penalty. HELD THAT - The subject goods should appropriately be classifiable under CTH 21069099, as against the claim of the appellant under CTH 12119099 - it is also found from the available records that the appellant had accepted before the lower authorities that the imported goods are not classifiable under CTH 12119011 or CTH 12089000 - It is also noticed from the original order dated 24.02.2011 that the subject goods though were held to be liable to confiscation under Section 111(m) of the Customs Act, 1962, but no redemption fine was imposed on the ground that the said goods have already been cleared and not available for confiscation. Penalty u/s 114 of CA - HELD THAT - The said statutory provisions are attracted in the eventuality, where the duty has not been levied or has been short levied by reason of collusion or any wilful misstatement or suppression of facts. On perusal of the case records, including the adjudication and the impugned orders, we find that the authorities below have not adduced any plausible evidence to show that the ingredients mentioned in Section 114A ibid are present in the circumstances of the case - the provisions of Section 114A cannot be invoked for imposition of penalty on the appellant. Penalty set aside - Confiscation upheld - redemption fine cannot be imposed - appeal allowed in part.

Summary

Issues: Classification of imported goods under the Tariff Act, 1975; Imposition of redemption fine and penalties; Invocation of Section 114A for penalty imposition.

In this case, the appellant imported consignments classified under CTH 12119011/12089000/12119099 but were reclassified under CTH 21069099 by the department. The Commissioner of Customs (Appeals) upheld this classification due to the specialized nature of the goods, classifying them under CTH 2106. The appellant argued against this classification, stating that the goods should remain under Chapter 12 and that no misdeclaration occurred. The Tribunal examined the report by the Assistant Drug Controller, HSN Notes, and product literature, affirming the classification under CTH 21069099. The Tribunal also noted that no evidence of collusion or wilful misstatement was present to invoke Section 114A for penalty imposition.

The key issue before the Tribunal was the classification of the imported goods under the Tariff Act. The appellant claimed the goods should remain under Chapter 12, while the department reclassified them under Chapter 21 due to their specialized nature as a food supplement. The Tribunal, after examining relevant reports and literature, upheld the department's classification under CTH 21069099, rejecting the appellant's argument.

Another issue addressed was the imposition of redemption fine and penalties on the appellant. The Commissioner of Customs (Appeals) had imposed these fines, alleging suppression of facts by the appellant. However, the Tribunal found no evidence to support this claim and set aside the penalties imposed, ruling in favor of the appellant.

The Tribunal also analyzed the invocation of Section 114A for penalty imposition. It was found that the authorities failed to provide sufficient evidence of collusion or wilful misstatement to justify the application of this provision. Consequently, the Tribunal set aside the penalty imposed under Section 114A, thereby ruling in favor of the appellant and allowing the appeals on this ground.