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TMI Blog2010 (10) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai in Appeal No.C/1185/04 (Sonam International Vs. Commissioner of Customs Lucknow). 2.We have heard Sri Rajesh Singh Chauhan learned counsel for the appellant and Sri Naveen Mullick on behalf of respondent as well as perused record. Facts of the case:- 3.Directorate of Revenue Intelligence, (in short DRI) Lucknow, received information that respondent M/s. Sonam International, Shop No.9,B-Wing, Devki Nagar, Eksar Road, Borivali (West), Mumbai-400103, is involved in illicit import of third Country Origin Vitamin E powder by misdeclaring as poultry feed supplement in the Bill of Entry from Nepal into India. The Supplier at Nepal M/s. Anivet Industries, Birganj, Nepal, through the Land Customs Station, Sonauli on the Indo-Nepal Border in the State of Uttar Pradesh is exporting Vitamin E powder as poultry feed supplement importing it from foreign countries in Nepal. Respondent M/s. Sonam International by misdeclaring the Vitamin E powder as "Poultry Feed Supplement" AV-117 of Nepali Origin, vide Bill of Entry No.487/02, dated 1.12.2002 and cleared on 21.5.2003, through the Land Customs Station of Sonauli, on the Indo-Nepal Border in Uttar Pradesh, loaded on a truck bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a financial crisis, therefore, he had allowed them to use the premises as Office on paper only, and no rent was ever taken. All post/letters received in their name, were sent to the Mumbai Office of the respondent M/s. Sonam International. 6.DRI found that Sri Nailesh Shah looked after the imports of the respondent M/s. Sonam International from Nepal into India and he also ran a manufacturing Unit at the Union Territory of Daman in the name and style of M/s. Baadar Schultz Laboratories, engaged in the manufacture of "Poultry Feed Supplement" and is a partner. Sri Nailesh Shah in view of these circumstances, had common interest in the affairs of both the firms namely, M/s. Baadar Schultz Laboratories at Daman and M/s. Sonam International at Mumbai. 7.In follow up action, the Officers of DRI at Surat detained 2225 kgs. of Vitamin E Powder, which according to the appellant, was misdeclared as "Poultry Feed Supplement-AV 110" in the Bill of Entry No.5509/03, dated 27.2.2003 filed for clearance of the same at LCS, Sonauli, at factory premises of M/s. Baadar Schultz Laboratories, Daman on 30.5.2003 under the drawal of proper Panchnama. The goods seized were sent for test and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E powder valued at Rs.7,82,644/-, which was seized under Section 110 of the Act on 6.9.2003 by the Officers of DRI, Surat. 12.M/s. Baadar Schultz Laboratories, Daman, filed a Civil Misc. Writ Petition No.6353 of 2003 in Bombay High Court in August, 2003 for release of the goods seized by the DRI, Surat on 6.9.2003. The Bombay High Court, by an order dated 13.10.2003, directed inter alia that the department will draw three samples of the seized goods; one to be given to the petitioners, the other to be sent for chemical analysis and the third to be retained by the department. The department was given the liberty to proceed with the investigation well within reasonable time and to complete the same within 8 weeks from the date of order. The Bombay High Court has given liberty to adjudicate the matter with due compliance of principles of natural justice. The Court also directed the petitioner to cooperate with the investigation. The goods were released subject to furnishing of bank guarantee of Rs.5,50,000/- and and a bond for Rs.7,50,000/-. 13.In spite of specific observations made by Bombay High Court, various persons relating to present controversy like Sri Pradeep Pathak, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1.2004 and remanded to judicial custody. Bail application of Sri Pradeep Pathak was rejected by the Special Judicial Magistrate (Economic Offence), Lucknow on 5.1.2004 and by the District and Sessions Judge Lucknow, on 28.1.2004. A complaint under Section 135 (1) (b) of the Act had been filed by the prosecution in the Court of Special Chief Judicial Magistrate (Economic Office), Lucknow on 28.2.2004. In the meantime, Bombay High Court by an order dated 6.1.2004 extended time limit for investigation by 8 weeks. 17.The appellant after investigation, found that imported goods have been declared as "Poultry Feed-AV 110" in the column 6 of the said Bill of Entry meant for description of goods. The Vitamins and "Poultry Feed Supplement" are different products and have different identity under the Customs Tariff, while the former is classifiable under Chapter 29, the latter is classifiable under Chapter 23. 18.Under Explanatory Note to HSN (Chapter 23), the characteristic feature of animal feed supplement is that they essentially contain products from each of the three group of nutrients i.e., "energy" nutrients consisting of high carbohydrates, "body building" protein rich nutri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exure No.2). 27.The Joint Commissioner Custom had elaborately considered and discussed rival contentions and statutory provisions and reached to the conclusion that seized goods of 2225 kg Vitamin-E, 50% were imported by misdeclaring them as "Poultry Feed"/"Poultry Feed Supplement" AV-110 under the garb of Notification No.40/02-Cus., dated 12.4.2002 read with Revised Protocol to the Indo-Nepal Treaty of Trade and in violation of provisions contained in Notification No.9/96 (NT)-Cus., dated 22.1.1996 issued under Section 11 of the Act and confiscated them under Section 111 of the Act and penalty was also imposed under Section 112 of the Act. 28.Confessional statement has been made by Sri Pradeep Pathak on 2.1.2004 and 3.1.2004 to the effect that respondent M/s. Sonam International has been engaged in smuggling Vitamin-E from Nepal and M/s. Anivet Industries does not possess any manufacturing unit of poultry feed supplement. The goods under the garb of poultry feed supplement Vitamin-E is smuggled in India abusing the Indo-Nepal Treaty. It has also been stated by Sri Pradeep Pathak that M/s. Anivet Industries imports Vitamin-E from overseas and exports to M/s. Sonam Internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plier under 4 digit HSN Code as 2936. 32.The order dated 23.4.2004 passed by the Joint Commissioner of Customs, Customs (Prev.) Commissionerate, Lucknow was the subject matter of appeal before the Commissioner (Appeals). The Commissioner (Appeals) by the order dated 13.9.2004 had disallowed the appeal, and upheld the original order passed by the adjudicating authority. The Commissioner (Appeals) also relied upon the confessional statement and test report coupled with other documents. 33.The appellate authority observed that the facts of the case clearly transpire that DRI Officers were investigating the case and were having prior cogent information that some smuggled of third country origin were being imported from Nepal to India by misdeclaring the same. The belief turned into truth after investigation and seizure of goods. The appellate authority further relied upon Section 111 of Customs Act, 1962 with regard to confessional statement and abuse of Indo-Nepal Treaty of Trade to import third country origin goods in India. It has further been held by the appellate authority that goods were imported in contravention of Notification dated 12.4.2002 and under Section 112 of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, department has taken contrary view and stated that the goods in question, were Vitamin-E as such classifying the same under the heading 29.36 of Customs Tariff, the respondent is guilty of offence acting in contravention of Notification dated 12.4.2002 and the Notification dated 21.1.1996 issued under Section 11 of the Customs Act, 1962. 38.The heading No.23.09 includes the product of a kind used for animal feeding, not elsewhere specified or included, obtained by processing vegetables or animal materials to such an extent that they have lost essential characteristics of the original material, other than vegetables waste, vegetable residues and by-products of such processing. Annexure No.14 to the supplementary affidavit filed on behalf of Nailesh Shah authorised representative of the respondent firm M/s. Sonam International, shows that the animal fodder includes various items under the heading 23.01, 23.02 and so on. Under column of description of Article, various items have been given like flours, meals and pellets of meat or meat offal of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption; greaves; bran, sharps and other resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion" nutrients. These are substances which promote the assimilation of carbohydrates, proteins and minerals. They include vitamins, trace elements and antibiotics. Lack or deficiency of these nutrients usually causes disorders. 42.The preparation known in trade as "premixes", are generally compound compositions consisting of number of substances, the nature and proportions of which vary according to animal products requirement. The substances are to improve digestion, to preserve feeding stuffs which serve as carriers. 43.The circular issued by the Government of India dated 26.3.1996 provides that where animal feed supplements are just inter-mixtures of vitamins only without other ingredients, except solvents, stabilizers or anti-oxidants, cannot be classified under heading 23.02 even though they are used as animal feed supplements. The Board had observed that such inter-mixtures of vitamins are specially covered under heading 29.36. The circular further provides that animal feed supplements use vitamins, pro-vitamins, amino-acids, anti-biotics, "Coccidiostats" etc., in very small quantities (micro-quantities) and that the feed supplements contain other organic and inorgani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te authority, should have given reasons while allowing the appeal with regard to various issues factual and legal aspect adjudicated by the original as well as appellate authority. He would submit that Tribunal has not considered the factual finding as well as proposition of law recorded by the original as well as the adjudicating authority while dismissing the appeal of respondent, which renders the order substantially illegal. He would submit that the Tribunal has failed to exercise jurisdiction vested in it and the goods seized, cannot be termed as animal feed supplement and shall not fall under the heading No.23.09 but it shall fall under the heading No.29.36 as held by two authorities below. 50.Sri Chauhan has also submitted that appeal is very well maintainable because of the fact that respondent importer had committed fraud by importing Vitamin-E under the garb of animal feed supplement by misdeclaring on the basis of fraudulent, manufacturing document which shall disentitle respondent to claim benefit on the basis of clearance given by the Custom at Sonauli at the time of entry of goods. 51.It has been vehemently argued that M/s. Anivet Industries does not have g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D of the Act, attains finality and it is not open to challenge. He submitted that no substantial question of law is involved and interference at this stage, will amount to re-assessment of Bill of entry and this Court has no jurisdiction to decide the issue of assessment. The classification falls under the heading No.23.09 and not under heading No.29.36. He has also submitted that once Bombay High Court released the goods, the matter attains finality. He further submitted that poultry feed supplement AV-110 imported from Nepal with due clearance by Nepal authorities under the terms of Indo-Nepal Treaty, cannot be placed against heading No.29.36 of Customs Tariff Act, 1975. He further submitted that premixtures containing vitamin-E, cannot be classified under heading No.29.36 and there is no evidence that such premixtures are brought and sold as only vitamin-E. 54.Sri Rajesh Singh Chauhan for appellant relied upon the cases reported in (1995) 3 SCC 454: Collector of Central Excise, Shillong. Vs. Wood Craft Products Ltd.; 1997 (89) E.L.T. 646 (S.C.) Surjeet Singh Chhabra. Vs. Union of India; 1996 (83) E.L.T. 258 (S.C.): Naresh J. Sukhawani. Vs. Union of India; (1995) 3 SCC 454: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o goods which means an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in section 82 or the entry made under the regulations made under section 84. Section 2 (33) defines the word, "prohibited goods" which means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been compiled with. Under Section 2 (39), the word, "smuggling" has been defined in relation to any goods which means any act or omission which will render such goods liable to confiscation under section 111 or section 113 of the Act. 58.Chapter IV of the Act empowers the Central Government to prohibit the importation or exportation of goods as may be specified in a notification. The purpose has been given in sub-section (2) of Section 11 under the Chapter IV. Chapter IV-A provides detection of illegally imported goods and prevention of the disposal thereof. The word, "illegal import" has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof by presenting to the proper office a bill of entry for home consumption or warehousing in the prescribed form. The bill of entry shall mention all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. The importer while presenting a bill of entry shall at the foot thereof make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, relating to the imported goods. If the proper officer is satisfied that the interests of revenue are not prejudicially affected and that there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for a bill of entry for a warehousing or vice versa. 63.Section 47 deals with the clearance of goods for home consumption and provides that where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --(1) The importer of any goods, other than goods intended for transit or transhimpment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form: Provided that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2)Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. (3)A bill of entry under sub-section (1) may be presented at any time after the delivery of the import manifest or import report, as the case may be: Provided that the [Commissioner of Customs] may in any special circumstances permit a bill of entry to be presented befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of Commissioner is further appealable to Tribunal constituted under the Act in pursuance of provisions Section 129 of the Act. Section 130 as stood prior to its omission by the National Tax Tribunal Act, 2005 (29 of 2005) Sec.30 and Sch. Pt. VI-7., with effect from 28.12.2005, confers appellate power to High Court. For convenience relevant portion of Section 130 is reproduced as under: "130. Appeal to High Court.---(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law. (2)The Commissioner of Customs or the other party aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be --- (a) filed within one hundred and eighty days from the date on which the order appealed against is received by the Commissioner of Customs or the other party; (b) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion with regard to rate of duty of custom or value of goods for the purpose of assessment shall not be subject matter of appeal before the High Court. Section 130-E deals with the provisions with regard to appeal in the Hon'ble Supreme Court which is reproduced as under: "130-E. Appeal to Supreme Court.---An appeal shall lie to the Supreme Court from--- (a) any judgment of the High Court delivered--- (i)in an appeal made under section 130; or (ii)on a reference made under section 130 by the Appellate Tribunal before the 1st day of July, 2003; (iii)on a reference made under section 130-A, in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or (b) any order passed before the establishment of the National Tax Tribunal by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment." Thus, a combined reading of Section 130 and Section 130-E of the Act reveals that whenever question re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal but it is subject to action conferred by Chapter XIV of the Act. In case the goods are seized under Section 111 of the act, a penalty may be imposed under Section 112 of the Act. (b) Section 114-AA further provides that if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purpose of this Act, shall be liable to a penalty not exceeding five times the value of goods. The provisions of Section 114-AA inserted by the Act 29 of 2006 with effect from 13.8.2006, makes existing law more stringent with intention to check the import of goods by unlawful means. (c) Section 117 empowers the authorities to levy the penalty in the event of non-compliance of any provisions of the Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure. 70.Section 123 of the Act provides that burden to prove that goods are not smuggled, shall lie on the person from whose possession such goods are seized. 71.It shall be appropriate to take note of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , XV and XVI of the Act. 74.The structure of central excise tariff is based on internationally accepted nomenclature founded in HSN and, therefore, any dispute relating to tariff classification as far as possible, should be resolved with reference to nomenclature indicated by HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985, vide, (1995) 3 SCC 454: Collector of Central Excise, Shillong. Vs. Wood Craft Products Ltd. 75.Accordingly, while interpreting the heading as to whether the goods imported and seized by the custom, falls under the heading 2309 or 2936, the entire related provisions including the Tariff, General Rules for interpretation of schedule provided under the Customs Tariff Act, 1985, should be taken into account. 76.It is trite in law that while considering the statutory provisions, meaning should be given to each and every word, Sections, Clauses and statutes as a whole. Statutory provisions cannot be interpreted in isolation or piecemeal, vide, 2002 (4) SCC 297 Grasim Industries Limited v. Collector of Customs; 2003 SCC (1) 410 Easland Combines v. CCE; 2006 (5) SCC 745 A. N. Roy v. Suresh Sham Singh and 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries possesses any manufacturing unit in Nepal, rather it imports goods from the third country. In the present case, Vitamin-E was imported in Nepal and exported to India through respondent. 79.Once the appellant prima facie had made out a case that M/s. Anivet Industries has no manufacturing unit at Nepal and goods were smuggled into India by misdeclaration, then burden was on the respondent under Section 123 of the Act, to lead evidence to negate the charges. 80.The respondent has failed to lead any evidence which may even prima facie establish that M/s. Anivet Industries is having manufacturing unit in Nepal to produce "Poultry Feed Supplement" which was imported by them. In view of the above, the respondent does not seem to be entitle for the benefit of Indo-Nepal Treaty to secure its interest. 81.Much emphasis has been given by the learned counsel representing respondent with regard to certificate given by the authorities of Nepal. Of course, the authorities of Nepal have given certificate with regard to goods imported by the respondents stating therein that the "Poultry Feed Supplement" in question, is the product of Nepal but the Indo-Nepal Treaty does not seem t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Baadar Schultz Laboratories at Daman by use of vitamin-E. 86.Sri Pradeep N. Soni in his statement dated 2.6.2003, had stated that M/s. Sonam International (respondent) is the property of his father and since he is aged person, he manages the affairs of the company. He admitted that the goods imported from M/s. Anivet Industries of 2000 kg of AV 110 was seized by DRI ON 30.5.2002. He further states as under: "I state that in our factories M/s. Bader Schulz Labs . M/s. Bio Vet Industs., we manufactor feed supplements vitamin premixes to different companies customers. M/s. Ranbaxy (sic......) Feeds, (sic...), etc. In our said two factories different feed supplement imported from China, Japan Europe are used. However, the said factories generally (sic...) from Sonam Industries and Sheetal Pharma and from various local importers." 87.From the aforesaid statement it seems to correct that vitamin-E is imported by the respondent from various countries for manufacture of animal feed supplement. The aforesaid statement is supported by receipts of imports of vitamin-E of M/s. Anivet Industries whereby the industry has imported into Nepal Vitamin-E from China and Germany. Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods and it is part of their stock and is poultry feed supplement, not Vitamin-E. Merely by saying that goods seized is poultry feed supplement is not sufficient. 91.Hon'ble Supreme Court in a case reported in (2001)2 JT (SC) 407 Santosh Hazari versus Purushottam Tiwari(Dead) by L.Rs. held as under : "The appellate Court has jurisdiction to reverse or affirm the findings of the trial Court. First appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for hearing both on questions of fact and law. The judgment of the Appellate Court must, therefore, reflect its conscious application of mind, and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the Appellate Court." ................ ................ While reversing a finding of fact the Appellate Court must come into close quarters with the reasoning assigned by the trial Court and then assign its own reasons for arriving at a different finding. This would satisfy the Court hearing a further appeal that the First Appellate Court had discharged the duty expected of it." 92.The afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the person was carrying the gold, the circumstances under which the gold was discovered, the manner in which he was carrying smuggled gold, the considerable quantity of the gold that was being carried namely, blocks and bars in which the major portion of the gold was found and expected to recover gold it may be inferred that the accused was evading the prohibition. The circumstances should be taken up cumulatively. 97.In the case of Kewal Krishan Vs. State of Punjab reported in AIR 1967 SC 737 their Lordship's held that when goods are seized with reasonable belief that they are smuggled one then onus proving that they are not smuggled goods i.e. not of foreign origin on which duty was not paid shall be on the person on whose possession the goods are seized. The onus shall not be on the prosecution to show that the good are not of Indian origin. In case contention of respondent's counsel is accepted then it will amount to shifting of onus on the prosecution. 98. Their Lordship of Hon'ble Supreme Court in a case reported in 1996 (83) E.L.T. 258 (S.C.), Naresh J. Sukhawani Vs. Union of India had held as under- "4. It must be remembered that the statement made before the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention. The Customs official are not police officers. The confession, though retracted, is an admission and binds the petitioner. So there is no need to call panch witnesses for examination and cross-examination by the petitioner." 100. In the case, Surjeet Singh Chhabra and Naresh J. Sukhawani (supra) Hon'ble Supreme Court while interpreting Section 108 and 111 of Customs Act, has held that confessional statement made before the custom officers, retracted, shall be binding since custom officers are not police officers. Accordingly, the statement of Pradeep Pathak cannot be thrown out as baseless only because of retraction at later stage. 101. It shall be relevant to take note of the fact that at no stage, the respondent has either led evidence or tried to rebut the appellant's version that M/s. Anivet Industries, does not have got any manufacturing unit at Nepal and it imports vitamin-E from china, Germany and other countries. No effort was made by the respondent to establish that vitamin-E to the extent of 49% could have been used as animal feed supplement. Rather, it has been submitted that 1-2 gms., is mixed in one tone or more in animal feed. 102. It is veheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. L.R. 565). Although "magic" muchrooms picked, packaged and frozen did not, in that state, amount to a "preparation" they did come within the meaning of the word "product" or within the phrase "or other product" (Hodder v DPP; Matthews v DPP [1990] Crim. L. R. 261). "Preparation... of ... preserved food" (Food Act 1984 (c. 30). s.16). The slicing of cooked meats does not amount to "preparation" for the purposes of this section (Leeds City Council. V Dewhurst [1990] Crim. L. R. 725). Stat. Def. Food and Drugs Act 1955 (c.16), s. 135 (1)." 105. Reliance placed by respondent's counsel over the judgment of Tetragon Chemie (supra) with submission that goods in question covered, fall under heading 23.09, includes the forage and other preparation, seems to be misconceived. There appears to be no reason to differ with the Tetragon Chemie's case that preparation mentioned under heading 23.09 of HSN include sweetened forage and other preparations. Other preparations include preparations for supplementing farm-product feed and preparations for use in making the complete feeds. Vitamins or provitamins, aminoacids, anti-biotics, coccidiostats, trace elements, emulsifiers, flavourings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay not be treated as animal feed supplement but it shall be vitamin-E, a notified item for which it shall be necessary for importer to make true declaration and pay custom duties. 109. The argument of learned counsel for the respondents could have carried weight in case in the bill of entry, they would have declared the contents of vitamin-E to the extent of 50% or less. Because of substantial percentage of vitamin-E in goods in question, it shall be a product for its future use in animal feed supplement and shall fall under HSN Code29.36. 110. It has been brought to the notice of this Court that special leave petition filed against the judgment in Tetragon Chemie's case (supra), has been dismissed by the Hon'ble Supreme Court but mere dismissal of special leave petition shall not mean that the judgment and ratio of case of Tetragon Chemie, shall be deemed to be the judgment of Apex Court and binding under Article 141 of the Constitution of India. It is settled law that judgment of Hon'ble Supreme Court shall be the judgment which lays down law while adjudicating a dispute and should be considered in reference to context and only thereafter it will have the binding effect u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thers, their lordships held that if the courts below have recorded finding of fact, the question of reappreciation of evidence by third court does not arise unless it is found to be totally perverse. The higher court does not sit as regular court of appeal. The position may be different in case finding of fact is materially affected by violation of any Rule or law or absolute perversity. As observed, it is trite in law that appellate authority while dissenting with the subordinate authority, should meet out finding recorded by the original authority by binding reasons. 115. Classification made by Revenue keeping in view the overwhelming percentage of vitamin-E in the goods seized, seems to be reasonable classification on the basis of HSN code. Hence Tribunal seems to have exceeded jurisdiction while reversing the finding of fact of two forums below without expressing the difference of opinion on various issues adjudicated by the original and appellate authority. Other case relied upon by the learned counsel for the respondent while defending the Tribunal's order are discussed hereinafter. 116. Much emphasis has been given by the learned counsel for the respondent on the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng confiscation of goods etc., on the ground of misdeclaration in Bill of Entry. With respect, the judgment of Tribunal at Delhi Tribunal, does not seem to lay down correct proposition of law to the extent with regard to its application to the present controversy. As observed, this is not a case where notice was issued for reassessment but it is case where the goods were seized on the basis of information received and later on, found to be vitamin-E falling under HSN code 2936. The Tribunal failed to appreciate the statutory right and duty of custom authorities provided under Chapter XIII and X IV of Customs Act, 1962. 122. The case of Collector of Central Excise, Kanpur and Flock (India) Pvt. Ltd (supra), seem to be not applicable under the facts of the present case where Hon'ble Supreme Court held that in case adjudicating authority has passed an order appealble under the statute, party aggrieved did not choose to exercise statutory right of filing appeal, it is not open to question the correctness of order of the adjudicating authority subsequently by filing of claim for refund on the ground that adjudicating authority has committed error. 123. Much emphasis has been giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as claimed, then there would have been no occasion to send the goods to utilise it for preparation of animal feed supplement. Virtually, the overwhelming presence of vitamin-E in the goods seized shows that deliberately, knowingly and intentionally, it was imported as vitamin-E and sent to various industries for preparation of 'animal feed supplement' which has been virtually admitted by the witnesses. 128. It has been admitted by the respondent's counsel that vitamin-E supplied by the respondent M/s. Sonam International, is used for making broiler premix, layer premix, SK bed, SK Mix, ABDK, etc. In case the goods in question for preparation would have been directly imported for use as animal feed supplement, then things would have been different and it could have been treated as HSN Code 2309. The Tribunal seems to be impress by the word,' "includes", under Chapter 23 of CETA. With regard to scope of heading 2302, by using the word, "includes", does not mean that language or words, used in heading 2936 may be given go-bye. Virtually by using the word, "includes", undoubtedly, the legislature provided in addition to preparation mentioned in heading 2302 products of a kind, us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods seized by the appellant, were used in preparation of animal feed supplement in the industries (supra). 131. That is why, Chapter 23 under heading 2309 includes product of a kind used as animal feeding not else where specified or included, obtained by processing vegetables or animal material to such extent that they have lost the essential characteristics of the original material, other then vegetable wastes, vegetables residues and by-product of such processing. Thus, note under Chapter 23 itself provides that the product under heading 2309 contains the preparation under heading 2309 which has lost their original identity or essential characteristics after mixed with other products while preparing animal feed supplement. The extent of 45-50% of vitamin speaks volume. 132. The case of Abhi Chemicals Pharmaceuticals Pvt. Ltd. (supra), does not seem to be applicable to the facts and circumstances of the present case. 133. The aforesaid proposition seems to be supported by Apex Court judgment relied upon by the respondent reported in 2001 (132) E.L.T. 525 (S.C.): Collector of Central Excise, Bangalore Vs. Tetragon Chemie P. Ltd. (supra), whereby, the Tribunal's judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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