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2020 (9) TMI 133 - AT - CustomsProvisional assessment - onerous condition of furnishing 100% bank guarantee on the Appellant for the differential duty amount - Classification of imported goods - carbonated fruit drinks such as Big Cola, Big Orange Cola, Big-lemon and other similar products - whether classifiable under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975? - applicability of Sl.No.48 under schedule 2 as Fruit Pulp or Fruit Juice based drinks in Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017 - HELD THAT - The Appellant s products are seasonal and competitive in market. As pointed out by the counsel for the Appellant, already substantial part of the season has been lost by the appellant due to the inability to comply with the conditions of provisional assessment put forth by the department, particularly the furnishing of 100% Bank Guarantee. Once the assessment of the identical products has already been decided by the Commissioner (Appeals) in favour of the appellant vide the OIA dated 08.06.2020, I see no justification in ordering to furnish 100% Bank Guarantee. Revenue is directed to allow the import of consignments of the Appellant without insisting on any Bank Guarantee with immediate effect. The respondent Revenue is expected to adhere to this order in letter and spirit, without causing any further loss of business to the Appellant - appellants shall be permitted to release the goods on condition of their executing Indemnity Bond agreeing and undertaking to pay the amount of differential duty as may be imposed on them by the Customs authorities while making the final assessment, instead of bank guarantee. Appeal allowed.
Issues Involved:
1. Classification of imported goods. 2. Requirement of bank guarantee for provisional assessment. 3. Compliance with appellate authority's orders. 4. Judicial discipline and adherence to higher appellate authority decisions. Issue-wise Detailed Analysis: 1. Classification of Imported Goods: The primary issue revolves around the classification of the appellant's imported products (carbonated fruit drinks) under the Customs Tariff Act, 1975. The appellant classified these goods under Tariff Item 2202 99 20 as "Fruit Pulp or Fruit Juice based drinks" taxable at 12% IGST. However, the Customs Officer classified them under Tariff Sub Heading 2202 10 as "water, including mineral water and aerated water, containing added sugar or other sweetening matter or flavor," attracting 28% IGST and 12% Compensation Cess. The adjudicating authority upheld this classification, but the Commissioner of Customs (Appeals) later reclassified the products under Tariff Item 2202 99 20, favoring the appellant. 2. Requirement of Bank Guarantee for Provisional Assessment: The appellant contested the requirement of furnishing a 100% bank guarantee for provisional assessment, arguing it was unnecessary since the appellate order was in their favor. They cited several judicial precedents, including Sai Exports v. Commissioner of Cus. (Port-Import), Chennai, and other similar cases, where courts held that imposing a bank guarantee for provisional assessment was unwarranted if an appellate order favored the assessee. The Tribunal agreed, noting that the appellant had already lost a significant part of the season due to the inability to comply with the provisional assessment conditions. 3. Compliance with Appellate Authority's Orders: The appellant argued that the Assistant Commissioner of Customs should honor the order passed by the first appellate authority, even if the department had filed an appeal against it, in accordance with judicial discipline. The Tribunal supported this view, emphasizing the Supreme Court's judgment in Kamlakshi Finance Corporation, which mandates that orders of higher appellate authorities should be followed unreservedly by subordinate authorities unless suspended by a competent court. 4. Judicial Discipline and Adherence to Higher Appellate Authority Decisions: The Tribunal highlighted the importance of judicial discipline, citing the Supreme Court's observation that failure to follow higher appellate authority orders results in undue harassment to assessees and chaos in tax law administration. The Tribunal reiterated that the department could not mechanically insist on a bond and bank guarantee without reference to the appellate order in the assessee's favor. Conclusion: The Tribunal directed the respondent Revenue to allow the import of the appellant's consignments without insisting on any bank guarantee. Instead, the appellant was required to execute an Indemnity Bond agreeing to pay the differential duty as determined in the final assessment. This decision was made to prevent further business losses for the appellant and ensure compliance with judicial discipline. The Tribunal's order was to be adhered to in letter and spirit, allowing the appellant to release the goods without undue hindrance.
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