2018 (4) TMI 27 - AT - Customs

Classification of imported goods - valuation - flavors of whey protein concentrate - casein - glutamine powder - creatine - whether classifiable under heading no.21061010 and 21069099? - Held that - The description for whey in heading no. 0404 is no different and the principles governing the classification of milk products with addition can be no different when flavorings and sweetenings have been added to whey ; the attempt to shift the classification to that of edible preparations does not find merit - It would appear that the legislature did not intend interference with the retail selling price except where the price at the retailer end varied with the declaration made for assessment the enforcement empowered by Central Excise Act 1944. The Customs Act 1962 does not provide the wherewithal to do so. The re-determination of value for assessment of additional duties of customs by the adjudicating authority fails to find the backing of law. Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of imported goods under different headings for levy of customs duty, re-determination of 'retail selling price' for assessment of additional duty, confiscation and penalty under Customs Act, 1962.

Classification of Imported Goods:
The case involved the classification of imported goods under different headings for the levy of customs duty. The importer had filed a bill of entry for clearance of goods under various headings, with some items classified under a heading liable to additional duty on 'retail selling price' and others to be assessed on transaction value. The dispute arose when the revenue alleged that the entire consignment should be classified under the heading for additional duty. The tribunal analyzed the classification of specific products like 'flavors of whey protein concentrate', 'casein', 'glutamine powder', and 'creatine'. It referred to precedents and laws to decide on the classification based on the ingredients and characteristics of the products.

Re-determination of 'Retail Selling Price' for Assessment:
The adjudicating authority had re-determined the 'retail selling price' of items in the bills of entry for the recovery of differential duty under the Customs Act, 1962. The tribunal examined the provisions of section 14 of the Customs Act, 1962, and the rules for valuation to assess the authority for re-determining the 'retail selling price'. It concluded that the law did not provide the mechanism to extend the re-determination of 'retail selling price' beyond the scope of value as described in section 14. The tribunal also considered the argument that any revision in 'retail selling price' after import would require fresh labeling, amounting to manufacture subject to duties of central excise.

Confiscation and Penalty under Customs Act, 1962:
The impugned order had imposed confiscation, fine, and penalty on the importer for misdeclaration and misclassification of goods. The tribunal examined the legal grounds for confiscation and penalty under section 111(m) and section 112 of the Customs Act, 1962. It found that the re-determination of value for assessment of additional duties lacked legal backing, leading to the dismissal of the revenue's appeal and allowing the importer's appeal.

In conclusion, the tribunal dismissed the appeal of the revenue and allowed the appeal of the importer based on the legal analysis of classification, re-determination of 'retail selling price', and confiscation/penalty under the Customs Act, 1962.