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2019 (2) TMI 1504 - AT - CustomsClassification of imported goods - Germinated Oil Palm Seeds - whether classified under CTH 1209 or under CTH 1207? - benefit of N/N. 21/2002-Cus dated 01.03.2002 - Held that - By application of rule 1 of General Rules of Interpretation of Import Tariff classification of the goods is to be done in accordance with the terms of headings and any relative Section or Chapter Notes. It is not the case of the appellant that by application of the above Rule 1 the classification as done by the revenue is erroneous but appellants are contending that the classification should have followed the exemption notification. We are not in position to agree with the said contention - appeal dismissed - decided against appellant.
Issues: Classification of imported goods under CTH 1201 or 1209, Applicability of exemption notifications No. 20/2006 and No. 21/2002, Interpretation of Chapter Note 3 of Chapter 12, Refund claim based on exemption notification.
Classification Issue: The appeal challenged the classification of imported Germinated Oil Palm Seeds under CTH 1201 instead of CTH 1209. The Commissioner upheld the assessment under CTH 1201, citing Chapter Note 3 of Chapter 12 which excludes oil seeds from heading 1209. The appellant argued that since the seeds were for cultivation, they should be classified under CTH 1209. However, the Tribunal disagreed, stating that the exemption under Notification No. 20/2006 for non-oil seeds did not apply to oil seeds like the imported goods. The Tribunal emphasized that the classification must follow the terms of headings and Chapter Notes, not the exemption notification. Exemption Notification Issue: The appellant contended that exemption under Notification No. 21/2002 should apply instead of Notification No. 20/2006. They argued that the assessment should have granted full exemption from Additional Duty as the rate was not specified in the notification. However, the Tribunal held that exemption notifications must be strictly interpreted, with any ambiguity benefiting the revenue. Citing a Supreme Court ruling, the Tribunal emphasized that the burden of proving applicability lies with the assessee, and any ambiguity should favor the revenue. Therefore, the Tribunal dismissed the argument for full exemption under Notification No. 21/2002. Interpretation of Chapter Note 3: The appellant challenged the application of Chapter Note 3 of Chapter 12, arguing that it should not apply due to the exemption notification. They contended that the note applies only when goods are not under any exemption. However, the Tribunal disagreed, stating that the note excludes oil seeds from heading 1209 regardless of exemptions. The Tribunal emphasized that the exemption notification does not override the Chapter Note, leading to the classification under CTH 1201. Refund Claim Issue: The Tribunal distinguished a previous case involving a refund claim, where the appellant had not challenged the assessment initially. In the present case, the appellant had claimed and received the exemption at the time of assessment. The Tribunal highlighted that the issue in the present case was not about a refund claim without challenging the assessment. Therefore, the Tribunal rejected the comparison to the previous case and dismissed the appeals, upholding the assessment and exemption granted by the revenue authorities. This detailed analysis covers the classification dispute, exemption notification applicability, interpretation of Chapter Note 3, and the distinction regarding refund claims, providing a comprehensive overview of the legal judgment.
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