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2015 (8) TMI 1069 - AT - CustomsClassification of Dry (Betel) nuts under CTH 08129090 or CTH 08028020 Mis-declaration of Goods Imposition of redemption fine, duty and penalty Appellant filed Bill of Entry claiming classification of Dry (Betel) nuts under ITC HS Code 08129090 however as goods were dry betel nuts in split condition, department sought to classify under tariff sub-heading 08028020 Commissioner vide impugned order confirmed differential duty, redemption fine and penalty Held that - product was declared as Safe Food on basis of food safety parameters tested under its rules and regulations Court find from test reports that sample of imported goods are not unsuitable for immediate consumption and therefore they would merit classification under CTH 080280 and not under CTH 0812. Classification was dependent on fact for unsuitability of goods for immediate consumption and on this fact importer misdeclared, as test reports have indicated Classification of imported betel nut was sought for by Appellant under CTH 0812 which has essential criteria that State in which goods are imported are unsuitable for immediate consumption It was obviously mis-declaration on part of importer Goods therefore liable for confiscation Once imported goods are found to be classifiable under CTH 0802 8020, their import is not allowable if their CIF value is below ₹ 75 per kg. as provided in DGFT Notification In view of facts and circumstances of case, court of opinion that as goods are classifiable under CTH 0802 8020 duty @ 100% BCD and 4% Additional duty was leviable Thus, order of adjudicating Commissioner modified to extent of reduction in amount of redemption fine whereas duty and imposition of penalty confirmed Decided against assesse.
Issues Involved:
1. Classification of imported goods. 2. Applicability of DGFT Notification. 3. Confiscation of goods. 4. Quantum of redemption fine. 5. Imposition of penalty. Detailed Analysis: 1. Classification of Imported Goods: The primary issue was whether the imported split betel nuts preserved with SO2 should be classified under CTH 08028020 (split Areca nuts) or CTH 08129090 (fruit and nuts provisionally preserved). The Appellant argued that the presence of SO2 made the nuts unsuitable for immediate consumption, thus falling under CTH 0812. The department contended that the classification should remain under CTH 08028020 as the goods were found suitable for consumption based on test reports from the Plant Quarantine Laboratory and Central Food Laboratory, which indicated that the nuts were safe for consumption and not adulterated. The Tribunal concluded that the goods were classifiable under CTH 08028020, as the presence of SO2 did not render them unsuitable for immediate consumption. 2. Applicability of DGFT Notification: The DGFT Notification No. 10(RE-2012)/2009-14 dated 14-8-2012 restricts the import of split betel nuts with a CIF value below Rs. 75 per kg. The imported goods had a declared CIF value of Rs. 51 per kg, making them restricted. The Tribunal upheld that the import required a specific license and, in its absence, the goods were liable for confiscation under Section 111(d) of the Customs Act, 1962. 3. Confiscation of Goods: The Tribunal addressed the confiscation of goods under Section 111(d) and 111(m) of the Customs Act, 1962. The goods were mis-classified and mis-declared regarding their suitability for immediate consumption. As the goods were imported without the required license and misdeclared, they were liable for confiscation. The Tribunal noted the insertion of sub-rule (4) to Section 17 of the Customs Act, which allows re-assessment of duty if self-assessment is found incorrect. 4. Quantum of Redemption Fine: The Tribunal considered the Appellant's argument that no market enquiry was conducted before fixing the redemption fine. The Tribunal referred to the market price of the goods, which was between Rs. 70 and Rs. 84 per kg, and determined that the market price of the imported goods was approximately Rs. 3.00 Crores. The Tribunal reduced the redemption fine from Rs. 1.25 Crore to Rs. 1.00 Crore, considering the market price and the duty involved. 5. Imposition of Penalty: The Appellant contested the penalty of Rs. 50.00 Lakhs imposed by the Commissioner. The Tribunal upheld the penalty, considering it justified given the gravity of the mis-declaration and the potential revenue implications. The penalty was approximately 35% of the duty amount sought to be evaded, and the Tribunal found no reason to interfere with the order of the Commissioner. Conclusion: The Tribunal modified the order of the adjudicating Commissioner by reducing the redemption fine to Rs. 1.00 Crore but upheld the confirmation of differential duty and the imposition of the penalty. The appeal was disposed of accordingly.
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