2016 (9) TMI 570 - AT - Customs

Classification - Glyphosate Technical 95% - Paraquat dichloride 42% Technical - classifiable under Tariff Item 38089990 or under tariff item 38089390 - Fipronil 92% - Sources of imports - Insecticides Act, 1968 - Held that - the DGFT both in the policy as well as the licences, issued to the appellant specifically mentioned the classification of the chemical ITC (HC) under tariff item 38089990. - the import policy as issued by the DGFT read with the licences given to the appellant are to be considered for assessment of clearance of the goods in so for they related to the classification of the goods. The appellant followed the provisions of DGFT import policy where the products are specifically mentioned by the name and also by the classification - no violation with reference to import - classification in order. The certificate of registration issued by the Ministry of Agriculture approved of import of these chemicals without any specification of source. Valuation - mis-decaration - Held that - the quantum of import of each consignment will have the bearing of unit price and so also the time difference between the imports. There is nothing on record to indicate that the earlier import price has been vitiated by the extra consideration between the exporter and the India importer. The imports were under advance licence intended for re-export - re-determination not justified. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of imported products under Tariff Item 38089390.
2. Correct declaration of the value of the imported products.
3. Compliance with DGFT licenses and import policy.
4. Allegations of mis-declared value and mis-classification.

Classification Issue:
The appeal challenged the classification of Glyphosate Technical 95% Paraquat Dichloride 42% under Tariff Item 38089390 by the original authority, which resulted in a revised assessable value and imposition of penalty. The appellant argued that DGFT licenses specified the correct classification under Tariff Item 38089990, allowing free imports. The Tribunal noted the DGFT's classification in licenses and policies, which permitted re-export without diversion to the domestic market. The Ministry of Agriculture approved the import without source specification, emphasizing re-export conditions. The Tribunal upheld the appellant's compliance with DGFT policy and licenses, concluding no duty implications existed due to the classification, thus rejecting the lower authority's decision on this issue.

Value Declaration Issue:
Regarding the declared value of imported products, the original authority based its revision on the appellant's later imports, alleging undervaluation. The appellant contended that price discrepancies were due to market fluctuations, varying quantities, and time gaps between consignments. The Tribunal agreed, emphasizing that unit prices are influenced by import quantities and timing. Without evidence of price manipulation, the Tribunal found no merit in the lower authority's valuation adjustment, as the imports were under advance licenses for re-export, ultimately setting aside the impugned order and allowing the appeal.

Compliance Issue:
The appellant demonstrated adherence to DGFT import policy by correctly classifying products as per licenses and policies, intended for re-export without domestic market diversion. The Tribunal emphasized the finality and binding nature of DGFT decisions on policy interpretation. Considering the lack of duty implications from the classification, the Tribunal found the appellant in compliance with DGFT regulations, leading to the rejection of the lower authority's findings on this issue.

Mis-declaration Allegations:
The appellant refuted allegations of mis-declared value and mis-classification, highlighting adherence to DGFT licenses and policies for correct classification and re-export purposes. The Tribunal's analysis focused on market fluctuations, import quantities, and timing as factors influencing unit prices, dismissing the lower authority's valuation adjustment based on later imports. The Tribunal's decision favored the appellant's compliance with DGFT regulations, leading to the allowance of the appeal and the setting aside of the impugned order.