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2019 (11) TMI 1287 - AT - CustomsIssuance of speaking order in terms of Section 17 (5) of the Customs Act, 1962 - relevant date for appeal in terms of Section 128 of Customs Act, 1962, in the absence of speaking order - Classification of imported goods - inactive dried yeast animal feed supplement - to be classified under CTH 23099020 or under CTH 21022000? - duty was paid under protest - provisional assessment was made but order under Section 17 (5) of Customs Act, 1962 was not issued - time limitation. Issuance of Speaking Order - Whether in the facts and circumstances of the case, the lower adjudicating authority was required to issue a speaking order in terms of Section 17 (5) of the Customs Act, 1962? - HELD THAT - In terms of Section 17 (5) where any reassessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification issued therefor under this Act and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. Relevant date for appeal - In the absence of such speaking order what could be the relevant date for appeal in terms of Section 128 of Customs Act, 1962? - HELD THAT - It is crystal clear that in cases where the reassessment is done contrary to the assessment done by the importer and where the assessee does not accept such reassessment in writing, the proper officer shall pass a speaking order under reassessment; in the instant case, the appellants have claimed classification under CTH 23099090 whereas the department has assessed under CTH 21022000; therefore, it is evident that the assessment has been done contrary to the claim of the appellant; the appellants have registered protest also; it is not the case of the department that the appellants have accepted the reassessment in writing; therefore, in terms of Section 17 (5) of Customs Act, 1962, the department was under obligation to issue a speaking order. To this extent, we find that the appellant‟s submissions are sustainable - the provision of Section 128 (1) themselves take care and by virtue of the provisions, the mere finalization of a Bill of Entry itself becomes an order or communication of the order. Therefore, the appeals are required to be filed in such circumstances within a time period from the date of such reassessment / finalization. Classification of Enzymes imported by the appellant - What is the correct classification of the impugned goods whether under Chapter 21 as contended by the department or under Chapter 23 as contended by the appellant? - HELD THAT - CTH 2102 covers yeasts (active or inactive); other single cell micro organisms, dead (but not including vaccines of Heading 3002); prepared baking powders and under 8 digit heading 21022000 inactive yeasts, other single-cell micro-organisms dead - Going by the test reports of CRCL, impugned goods are inactive yeast; in view of the explanatory notes to chapter 21 dried yeast is also known as inactive yeast and for that reason inactive yeast is to be considered as dried yeast. It is clear that the entire heading 2309 talks of preparations of a kind used in animal feeding. By no stretch of imagination the impugned products imported by the appellants are preparations of a kind animal feeding. At the best, they may be used for preparation of animal feeds that is to say that they are raw material used for preparation of animal feed. Therefore, they cannot be classified along with animal feed merely by virtue of the inclusive definition given in the explanatory notes for the heading 2309 CETA. Thus, classification of impugned goods i.e. yeast is correctly arrived by the Revenue under CTH 21022000. The appellant‟s submissions on the issue of time bar loose relevance in the instant case - to extent of classification of the impugned goods is concerned; the order of the Ld. Commissioner (Appeals) does not require to be interfered with - Appeal dismissed - decided against appellant.
Issues Involved:
1. Requirement of a speaking order under Section 17(5) of the Customs Act, 1962. 2. Relevant date for appeal in the absence of a speaking order as per Section 128 of the Customs Act, 1962. 3. Correct classification of the imported goods under Chapter 21 or Chapter 23 of the Customs Tariff. Issue-wise Detailed Analysis: 1. Requirement of a Speaking Order under Section 17(5) of the Customs Act, 1962: The appellants argued that the lower adjudicating authority failed to issue a speaking order as mandated by Section 17(5) of the Customs Act, 1962, which necessitates such an order when reassessment contradicts the self-assessment by the importer. The Tribunal found that since the department reassessed the classification contrary to the appellant's claim and the appellants did not accept this reassessment in writing, the department was indeed obligated to issue a speaking order. The Tribunal noted that the Commissioner (Appeals) also accepted this requirement but incorrectly dismissed some appeals as time-barred. Therefore, the Tribunal concluded that the department's failure to issue a speaking order was a valid point raised by the appellants. 2. Relevant Date for Appeal in the Absence of a Speaking Order: The Tribunal addressed the question of the relevant date for filing an appeal under Section 128(1) of the Customs Act, 1962, in cases where reassessment is finalized without issuing a speaking order. It was held that the finalization of the Bill of Entry itself becomes an order or communication of the order, and the appeals should be filed within the prescribed time period from the date of such reassessment/finalization. The Tribunal emphasized that it could not be the legislature's intention for the aggrieved party to wait indefinitely for the issuance of a speaking order before proceeding to appeal. 3. Correct Classification of the Imported Goods: The primary contention was whether the imported "inactive dried yeast – animal feed supplement" should be classified under Chapter 21 (CTH 21022000) as per the department or Chapter 23 (CTH 23099020) as claimed by the appellants. The Tribunal examined the tariff headings and test reports, concluding that the goods were inactive yeast. The Tribunal found no condition in Chapter 21 that the yeast must be fit for human consumption, and the specific mention of inactive yeast under CTH 21022000 took precedence over the general description under Chapter 23. The Tribunal referenced the general interpretative rules for classification, particularly Rule 3(a), which states that a more specific description should be preferred over a general one. Consequently, the Tribunal upheld the classification of the goods under CTH 21022000, as assessed by the department and affirmed by the Commissioner (Appeals). Conclusion: The Tribunal upheld the department's classification of the imported goods under CTH 21022000 and dismissed the appeals. The Tribunal found that the department was obligated to issue a speaking order under Section 17(5) of the Customs Act, 1962, but this did not affect the classification outcome. The relevant date for appeal was determined to be from the date of reassessment/finalization of the Bill of Entry. The Tribunal's decision was pronounced in open court on 26.11.2019.
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