2024 (5) TMI 338 - AT - Customs

Classification of imported goods - Import of branded nutrition/ dietary supplements - liable to IGST at 28% under Sr.No.9 of Schedule IV of Notification No.1/2017-IGST-Rate or at 18% under Sr. No.453 of Schedule III of the said Notification - demand barred by time limitation or not - suppression of facts or not - HELD THAT - As regard demand being time barred, it is submitted that this is not a case of mis-declaration or mis-classification. The dispute is only regarding applicable rate of IGST. It is settled law that the applicable rate of tax is the function of department. Appellant had claimed one rate as per its understanding and belief. If the department have any objection in the claim of the appellant, nothing prevented the department to make appropriate changes this does not involve any suppression. The department s view is also based on data and facts, which were on record available at the time of assessment. Since, there is no suppression of fact, the entire demand is time barred. From the reading of Sr. No. 9, it is seen that the description of goods covers food preparations not elsewhere specified or included i.e. Protein concentrates and textured protein substances, etc. From the description of the goods imported by the appellant, clearly do not fall under the description Protein concentrates and textured protein substances. Since, in the entry the word i.e. is prefixed that means only the description mentioned after i.e. are covered because i.e. denotes the specific item. Therefore, as per the list of the item imported by the appellant, none of the goods is covered under Protein concentrates and textured protein substances. Therefore, the aappellant s imported goods are not covered under Sr. No. 9. The appellant claimed the IGST rate @ of 18% as per Sr. No. 453 of Schedule III, which reads as goods of any chapter which are not specified in schedule I,II,IV,V or VI. As discussed, the appellant s goods is not specified in schedule IV which is claim of the department. The same will fall under Sr. No. 453. Accordingly, the correct rate of IGST applicable is 18% under residuary entry Sr. No. 453 of schedule III of IGST Notification 01/2017- Integrated Tax (Rate) dated 28.06.2017, as amended. The very issue has been considered by this Tribunal in the case of Neuvera Wellness Venture 2023 (10) TMI 964 - CESTAT AHMEDABAD . Thus, it can be seen, the facts of the said decision and that of the present case are absolutely identical. Therefore, the ratio of the above decision is directly applicable in the fact of the present case. Accordingly, impugned order is not sustainable. Hence, the same is set aside. Appeal is allowed.

Summary

Issues Involved:
1. Classification of imported goods for IGST rate.
2. Jurisdiction of Customs Officers to decide IGST rate.
3. Time-barred demand.

Summary:

1. Classification of Imported Goods for IGST Rate:
The core issue was whether the appellant's imported dietary supplements fell under Sr. No. 9 of Schedule IV (28% IGST) or Sr. No. 453 of Schedule III (18% IGST) of IGST Notification No. 01/2017. The appellant argued that their goods did not fit the description under Sr. No. 9, which is restricted to "Protein concentrates and textured protein substances" and other specific items. The Tribunal noted that the description under Sr. No. 9 is specific due to the use of "i.e." and concluded that the appellant's goods did not fall under this category. Therefore, the correct classification was under Sr. No. 453 of Schedule III, attracting 18% IGST. This conclusion was supported by previous Tribunal decisions, including Neuvera Wellness Venture P. Ltd. v. C.C., Mundra 2023 (10) TMI 964.

2. Jurisdiction of Customs Officers to Decide IGST Rate:
The appellant contended that Customs Officers lacked jurisdiction to decide the IGST rate, citing judgments such as Ortho Clinical Diagnostics India Pvt Ltd. v. Commissioner Of Customs (Import), Mumbai 2022 (9) TMI 1109 and IFB Industries Limited v. Commissioner Of Customs (Ns-V) 2023 (8) TMI 1244. The Tribunal did not explicitly address this jurisdictional argument in the final decision but focused on the correct classification and rate of IGST.

3. Time-Barred Demand:
The appellant argued that the demand was time-barred as there was no mis-declaration or suppression of facts. The Tribunal agreed, noting that the dispute was solely about the applicable IGST rate and that all relevant data were available at the time of assessment. The Tribunal held that the demand was time-barred and noted the principle of revenue neutrality, as any IGST paid would be available as input tax credit to the appellant.

Conclusion:
The Tribunal set aside the impugned order, concluding that the appellant's goods were correctly classified under Sr. No. 453 of Schedule III, attracting 18% IGST, and that the demand was time-barred. The appeal was allowed.