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Issues: Classification of imported item under Customs Tariff, requirement of license for imported item classified as consumer goods, validity of confiscation order, imposition of fine and penalty.
Classification of Imported Item under Customs Tariff: The appeal concerned the classification of an imported item declared as "Food Additives/Ribotide" under Customs Tariff. The Commissioner classified the item under Heading 3824.90 instead of CTH 29.42, requiring a license if classified as consumer goods. The literature provided by the party indicated the item's composition as a mixture of Nycleotide 5' - Inosinate (IMP) & 5' - Guanylate (GMP), both with flavor-enhancing properties. The Commissioner held that the item fell under 3824.90, not 29.42, as it was considered a consumer good, necessitating a license per Export-Import Policy 1992-97. The Commissioner ruled the item confiscable under Sec. 111(d) and imposed a fine and personal penalty. Requirement of License for Imported Item Classified as Consumer Goods: The appellants argued that the item, Ribotide, was a compound obtained from Glucose and not a consumer item but a flavor enhancer and food additive. They contended that the subsequent change in classification should not be accepted, as the item was cleared under OGL previously. The Department argued that the item was marketed and declared as a food additive, falling under Chapter 29 only if a single chemical compound. The Department highlighted that the item was a directly consumable product, not a single compound, and thus required a license for import. Validity of Confiscation Order and Imposition of Fine and Penalty: After considering arguments from both sides, the Tribunal found no issue with the Commissioner's order. The appellants' acceptance of the classification for customs duty payment under Chapter 3823.00 was noted, and their challenge to the ITC classification was rejected. The Tribunal upheld the confiscation order, stating that the item was directly used as a food additive, making it a consumable item requiring a license. The Tribunal emphasized that the item did not meet the criteria of a separate chemically defined organic compound under Chapter 29, justifying the confiscation order. The plea to continue clearing consignments without a license was dismissed, and the imposed redemption fine and penalty were deemed justified, considering the leniency shown compared to precedent cases. In conclusion, the Tribunal rejected the appeal, confirming the classification under Customs Tariff, the requirement of a license for the imported item classified as a consumer good, the validity of the confiscation order, and the imposition of the fine and penalty as per the Commissioner's decision.
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