2024 (11) TMI 843 - AT - Customs

Custom Classification - importer imported various consignments of Ground Colemanite (B2O3 40%) Natural Boron Ore - Eligibility for exemption from basic customs duty under Sr. No. 113 of Notification No. 12/2012-Cus and Sr. No. 130 of Notification No. 50/2017-Cus - whether the imported goods falls under Customs Tariff 2528? - HELD THAT - In the instant case, the Department had drawn the samples and the testreport of the samples is clearly in favour of the appellants. Since the goods imported by the appellant fall under CTH 2528 and since as per the Test Report of the CRCL, New Delhi the imported goods are Boron Ore , both the requirement of the said Sr. No. 113 and 130 of Notification No. 12/2012-Cus, and 50/2017 Cus. respectively are satisfied. Therefore, in our view the goods imported by the appellants are indeed Boron Ores , hence eligible to the duty exemption. There is no stipulation in the said Notifications that if the Boron Ore is imported after removing the foreign particles, impurities and other substances, it would not be entitled to the exemption. The presumption of the department that the exemption to Boron Ores under Sr. No. 113 of Notification No. 12/2012-Cus and Sr. No. 130 of Notification No. 50/2017-Cus. is available only if the Boron ores is imported with the foreign particles impurities and other substances contained in it when extracted from the mine and that the exemption is not available if the Boron ore is imported after removing the foreign particles, impurities and other substances by physical processes, is totally baseless and untenable in law. The revenue clearly erred in reading into the Notification additional words and conditions which are absent in the Notification. Entry Natural Boron Ore in the earlier exemption Notification has been replaced by the entry Boron Ores - With effect from 1st March 2005, the exemption is available to all types of Boron Ores and is not restricted or confined to only Natural Boron Ore. Therefore we are of the considered view that the goods imported by the appellant is Boron Ores and clearly eligible for exemption under notifications as claimed by the appellant in the Bills of Entry. Invoking larger period of limitation under Section 28(4) of the Customs Act 1962 - It is settled law that claiming of a particular classification or notification is matter of belief on the part of the importer and the claiming of a particular classification or exemption notification does not amount to mis-declaration or willful mis-statement or suppression of fact. Issue of eligibility to exemption notification or classification of goods under one heading or another is an issue of law and not a statement of fact. We also find that number of bills of entry were assessed by the proper officer of customs after examination of the goods. The issue whether the goods are Boron ores or not was specifically examined by the officers in the case of number of Bills of Entry and the exemption benefit was extended by the officers after such verification/examination. Accordingly, in our view it cannot be said that there was any willful mis-statement or suppression of fact on appellant s part. The larger period of limitation cannot be applied merely because the department subsequently entrains a different view on the scope of the Notification. We do not consider that the ingredients of Section 28 are satisfied so as to invoke the extended period of limitation in the present case. Hence the demand for the extended period is not sustainable on limitation also apart from merit. Thus, we find that the demand of duty and penal action cannot sustain in the facts of the instant case and all the other confirmation such as confiscation of the goods, fines in lieu thereof, penalties on all the appellants being consequential to demand of duty, are also not sustainable. Appeal allowed.

Summary

Issues Involved:

1. Classification and eligibility for exemption of imported goods under Customs Tariff Heading 2528.
2. Interpretation of exemption notifications, specifically regarding "Boron Ores."
3. Applicability of extended limitation period under Section 28(4) of the Customs Act, 1962.
4. Compliance with remand directions provided by the appellate authority.

Issue-wise Detailed Analysis:

1. Classification and Eligibility for Exemption:

The primary issue was whether the imported goods, identified as "Ground Colemanite (B2O3 40%) Natural Boron Ore," were correctly classified under Customs Tariff Heading (CTH) 2528 and eligible for exemption from basic customs duty under Sr. No. 113 of Notification No. 12/2012-Cus and Sr. No. 130 of Notification No. 50/2017-Cus. The Tribunal found that the test reports from CRCL, New Delhi, confirmed the goods as "Boron Ore," a classification that aligns with CTH 2528. The Tribunal emphasized that the classification under sub-headings (25280090 or 25280030) was irrelevant for the exemption, as the exemption notifications referred to heading 2528 in general.

2. Interpretation of Exemption Notifications:

The Tribunal addressed the interpretation of "Boron Ores" in the exemption notifications. The Commissioner had denied the exemption on the basis that the goods were not in their natural state as mined, but had been subjected to physical processes. The Tribunal rejected this interpretation, noting that the notifications did not restrict the exemption to "Natural Boron Ore" and that the term "Boron Ores" in the notifications was broad enough to include ores that had undergone physical processing. The Tribunal highlighted that the word "Natural" was consciously removed from the notifications post-2005, indicating an intention to broaden the scope of the exemption.

3. Applicability of Extended Limitation Period:

The Tribunal examined whether the extended limitation period under Section 28(4) of the Customs Act, 1962, was applicable. The Show Cause Notice alleged willful misstatement and suppression of facts by the importer. However, the Tribunal found no evidence of willful misstatement or suppression, as the classification and exemption claims were based on a reasonable belief and supported by test reports. The Tribunal concluded that the extended period could not be invoked merely because the department later disagreed with the classification or exemption claim.

4. Compliance with Remand Directions:

The Tribunal criticized the Commissioner for not adhering to the remand directions provided by the appellate authority. The remand order had instructed the Commissioner to reconsider the matter in light of the test reports and judgments cited by the appellants. However, the Commissioner relied on external sources like Wikipedia and websites, contrary to the Tribunal's directions. The Tribunal reiterated that the Commissioner was bound to follow the appellate authority's findings and directions.

Conclusion:

The Tribunal set aside the impugned orders, allowing the appeals with consequential relief. It emphasized that the imported goods were indeed "Boron Ores" eligible for exemption under the relevant notifications, and that the extended limitation period was inapplicable due to the absence of willful misstatement or suppression of facts. The Tribunal's decision underscored the importance of adhering to expert test reports and the proper interpretation of exemption notifications.