2019 (10) TMI 426 - AT - Customs

Classification of imported goods - CAXESTER MCT 8040 (Medium Chain Triglyceride 60/40) - IMEX 3/9280 (Caprylic Capriate Triglyceride) - whether classified under CTH 29159090 or under heading No 15162091? - exemption under N/N. 12/2012-Cus at Sl No 165 - HELD THAT - All the published literature support the findings recorded by the Commissioner in the impugned order to the effect that the goods imported are nothing but re-esetrified fat/ oil. On going through the published literature, and also the fact that as per the rulings relied from U S Customs and Kenya Customs, there are no error in the classification of the goods determined under Chapter 15162091. It is true that the Rulings of the U S Customs and Kenya Customs may not be binding but definitely have great persuasive value as the Classification Code followed by all these Countries, are based on HSN Explanatory Notes at least upto the six digit level, with which the classification system adopted by Indian Customs is also aligned. It is only beyond six digit level that local jurisdictions have their own expansions. Chapter 28 and 29 of the Customs Tariff refer to inorganic and organic chemicals. Every material in this universe will have chemical constituents - organic/ inorganic. Then can by referring to Chemical Structure, every product gets classified in these chapters. Such an argument is nothing but making the entire scheme of tariff redundant and hence the arguments advanced by the appellants need to be rejected on this ground itself. Appeal dismissed - decided against appellant.

Issues Involved:
1. Classification of imported goods.
2. Recovery of short-paid duty.
3. Applicability of interest under Section 28AA of the Customs Act, 1962.
4. Confiscation of imported goods under Section 111(m) of the Customs Act, 1962.
5. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Classification of Imported Goods:
The primary issue revolved around the correct classification of the imported goods "CAXESTER MCT 8040" and "IMEX 3/9280". The appellants classified these goods under CTH 29159090, availing the benefit of exemption under Notification No 12/2012-Cus at Sl No 165. The revenue, however, argued that the goods should be classified under heading No 15162091. The Commissioner, after considering the manufacturing process and relevant HSN notes, concluded that the goods were re-esterified fats/oils and should be classified under heading 15162091. The Tribunal upheld this classification, noting that the goods are indeed re-esterified fats/oils and aligned with the classification codes used by other countries like the US and Kenya, which, although not binding, have persuasive value.

2. Recovery of Short-Paid Duty:
The Commissioner ordered the recovery of ?54,56,156/- under the provisions of sub-section (1) of Section 28 of the Customs Act, 1962, for the duty short-paid due to incorrect classification. The Tribunal upheld this recovery, agreeing with the Commissioner’s classification and the resultant duty calculation.

3. Applicability of Interest under Section 28AA of the Customs Act, 1962:
The Commissioner ordered the importer to pay interest on the short-paid duty under Section 28AA of the Customs Act, 1962. The Tribunal affirmed this decision, indicating that interest is applicable as per the statutory provisions for the short-paid duty.

4. Confiscation of Imported Goods under Section 111(m) of the Customs Act, 1962:
The Commissioner decided not to confiscate the imported goods under Section 111(m) of the Customs Act, 1962. The Tribunal did not find any reason to challenge this decision, implying that the conditions for confiscation as per the Act were not met.

5. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
The Commissioner also chose not to impose any penalty on the importer under Section 112(a) of the Customs Act, 1962. The Tribunal upheld this decision, indicating that there was no sufficient ground to impose a penalty based on the facts and circumstances of the case.

Conclusion:
The Tribunal dismissed the appeal, affirming the Commissioner’s classification of the goods under heading 15162091, the recovery of short-paid duty, and the applicability of interest. The decisions not to confiscate the goods or impose a penalty were also upheld. The order was pronounced in the open court on 10.10.2019.

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