2023 (7) TMI 722 - AT - Customs

Benefit of duty free import as raw materials as per Notification No.52/2003-Cus dated 31.03.2003 denied - misdeclaration of goods - Coffee Husk/Bits or Robusta Coffee Beans? - Classified under CTH 09019010 or not - typographical error or intentional misdeclaration? - HELD THAT - While issuing general exemption on import of goods for EOU, it is specified that such EOU must follow procedure prescribed under Rule 5(1) (a) of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. In the present case as evident from the application for Procurement of Goods under the said Rule, the importer has provided information/ documents to Customs Export Promotion Cell and executed B-17 bond for import of Vietnam Robusta Coffee having CIF Value of Rs. 96,09,828/-. As per the invoice, description of the goods is shown as Vietnam Robusta Coffee and as per the description of the consignment mentioned in Certificate of Quality and Weight by the exporter/seller in Vietnam it shows Vietnam Robusta Coffee and Quality Moisture-13%, Husks-50%, Broken Kernels -50%. On arrival of the goods, Bill of entry was filed by giving description of goods as Vietnam Robusta Coffee . It is an admitted fact that the importer sought bulk import of Vietnam Robusta Coffee and entire documents including Bill of entry shows proper declaration. When permission was given for import of Vietnam Robusta Coffee, percentage of constituents like Beans, husk and skins were not mentioned. In the absence of any such condition, no allegation of mis-declaration can be alleged at the time of import. The power vested in the Customs authority is to verify that the goods are as per the import documents and the relevant approvals and it is for the concerned authority under Special Economic Zone to consider the request of EOU to import raw material suitable for import and to ensure fulfillment of export obligations as per the norms issued from time to time. In the present situation, goods even if considered as consisting of coffee husk/bits as alleged, it is legally permitted to import subject to fulfillment of condition 2A under General Exemption No. 69, Notification No. 52 / 2003-Cus dated 31.03.2003. The respondents are directed to release the goods by extending the benefit of Notification No. 52 /2003-Cus dated 31.03.2003 - appeal allowed.

Summary

Issues: Mis-declaration of imported goods leading to denial of exemption notification and confiscation of goods

The appellant, a private limited company engaged in manufacturing and export of Herbal Ayurvedic Extracts, imported "Vietnam Robusta Coffee" as raw material for production. Customs officers found the import consignment to be "Coffee Husk/Bits" instead of Robusta Coffee Beans. The Coffee Board test report confirmed the goods as "Raw Coffee Hulled/ Peeled." The Adjudication Authority alleged mis-declaration and confiscated the goods, allowing redemption on payment of customs duty, fine, and penalty. The appellant challenged this decision.

The appellant argued that the goods were allowed for import under General Exemption No. 69, Notification No. 52/2003-Cus, as raw materials required for production. Test reports showed a percentage of coffee husk and other materials in the imported goods. The appellant contended that the findings were based on assumptions, and the sampling method was not proper. Even if the goods contained coffee husk, being an Export Oriented Undertaking (EOU), they were authorized for duty-free import as raw materials.

The Authorized Representative for the Respondent claimed mis-declaration based on the description of goods as "Vietnam Robusta Coffee" with specified percentages of husks and broken kernels. The mis-declaration was considered grounds for confiscation of the goods.

The Tribunal considered the eligibility of the appellant to import goods, including coffee husk, under the prescribed rules for EOUs. The documents and declarations made at the time of import were found to be in order, and no mis-declaration was alleged initially. The liberal approach in import policy for EOUs was emphasized, allowing the import of raw materials to meet export requirements.

The Tribunal set aside the impugned order, directing the release of goods by extending the benefit of the relevant exemption notification. The decision was pronounced in the Open Court on 30/06/2023.