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TMI Blog2012 (9) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on payment of duty based on their declaration, without any bond or other undertaking - when the order-in-original was passed by the Jt. Commissioner, the goods were not physically available for confiscation - no redemption fine was liable to be imposed under Section 125 of the Act in lieu of confiscation of the goods X X X X Extracts X X X X X X X X Extracts X X X X ..... a separate show-cause notice issued to M/s. Radha V. Company, the Joint Commissioner of Customs confirmed total demand of duty of Rs. 7,27,384/- against them in respect of 2 Bills of Entry under Section 28(2) of the Customs Act, held the goods liable for confiscation under Section 111(d) and (m) of the Act and imposed a penalty of Rs. 7,27,384/- on the party under Section 112(a) of the Act. As the goods were not physically available for confiscation, the adjudicating authority refrained from imposing redemption fine. This part of the Joint Commissioner's order was reviewed by the Commissioner and, accordingly, an appeal was preferred to the Commissioner (Appeals). The Commissioner (Appeals) accepted the revenue's view by holding that redemption fine was imposable even if the goods were not available. The appellate authority remanded the matter to the lower authority for determining the quantum of fine. This remand order of the Commissioner (Appeals) is under challenge in Appeal No. C/1049/2007. 7. The Joint Commissioner's order against M/s. Radha V. Company was taken by them in appeal to the Commissioner (Appeals) but the latter only reduced the penalty to Rs. 2 lakhs while u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng duty from an importer without resort to Section 129D for revision of assessment. 9.2 Both sides have also cited decisions in support of their respective arguments. Decisions cited by the learned counsel : (1) Commissioner of Cus., Mangalore v. Jindal Vijaya Nagar Steel Ltd., 2007 (207) E.L.T. 47 (Kar.) (2) Commr. of Cus. (Imports) Mumbai v. Hindustan Gas & Industries Ltd., 2006 (202) E.L.T. 693 (Tri.-Mumbai) (3) Madhus Garage Equipments v. Commissioner of Cus. (Appeals), Bangalore - 2006 (198) E.L.T. 388 (Tri.-Bang.) (4) Commissioner of C.Ex., Aurangabad v. Videocon Appliances - 2009 (235) E.L.T. 513 (Tri.-Mumbai) (5) Mac & Megha Agro Equipments (P) Ltd. v. Commr of Cus., Cochin - 2006 (199) E.L.T. 260 (Tri.-Bang.) (6) STI India Ltd. v. Commissioner of C. Ex., Indore - 2008 (222) E.L.T. 112 (Tri.-Del.) (7) Collector of Central Excise, Baroda v. Cotspun Limited - 1999 (113) E.L.T. 353 (S.C.) (8) Madurai Power Corpn. (P) Ltd. v. Deputy Commr. of C.Ex., Madurai-I - 2008 (229) E.L.T. 521 (Mad.) The learned Counsel has also pointed out a difference between Section 28 of the Customs Act and Section 11A of the Central Excise Act. An amount of duty of excise short-levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act and cleared on payment of such duty under Section 47 of the Act. The show-cause notice subsequently issued by the department under Section 28(1) of the Act proposed to revise classification of the goods and to collect from the appellants the differential amount of duty based on SH 0904.11 of the CTA Schedule. According to the appellants, any revision of classification of the goods could have been made only by recourse to the procedure laid down under Section 129D of the Act and not under Section 28 of the Act. According to the respondent, any amount of duty short-levied or short-paid, for whatever reason, could be determined and demanded under Section 28 of the Act. This legal issue is covered by some of the decisions cited by the learned Advocate and the learned SDR. The earliest judgment referred to by both sides is that of the Hon'ble Supreme Court in the case of Jain Shudh Vanaspati Ltd.(supra). The learned counsel has argued that the relevant ruling of the Apex Court in the said case is applicable only in cases involving fraud on the Revenue. On the other hand, the learned SDR has argued that the ruling is applicable to other cases also. Obviously, while the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent to the clearance under Section 47 of the concerned goods. Further, Section 28 provides time limits for the issuance of the show cause notice thereunder commencing from the "relevant date"; "relevant date" is defined by sub-section (3) of Section 28 for the purpose of Section 28 to be the date on which the order for clearance of the goods has been made in a case where duty has not been levied; which is to say that the date upon which the permissible period begins to run is the date of the order under Section 47. The High Court was, therefore, in error in coming to the conclusion that no show cause notice under Section 28 could have been issued until and unless the order under Section 47 had been first revised under Section 130." The ruling which emerges from the above judgment of the Apex Court is that, even subsequent to clearance of goods under Section 47 of the Customs Act, a show-cause notice could be issued under Section 28(1) within the prescribed period of time reckoned from the relevant date for the purpose of recovery of customs duty not-levied, short-levied, not-paid, short-paid etc". 9.5 In the case of Venus Enterprises (supra), the Hon'ble High Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods were already cleared, no demand notice can be issued under Section 28(1) of the Act as unworkable and redundant, inasmuch as the jurisdiction of the authorities to issue notice under Section 28 of the Act with respect to the duty, which has been short-levied, would arise only in the case where the goods were already cleared. In view of the clear finding with regard to the misdeclaration and suppression of value, which led to the undervaluation and proposed short-levy of duty, we do not see any lack of jurisdiction on the part of the adjudicating authority to issue notice under Section 28(1) of the Act". We are told that the SLP filed against the above decision of the High Court was dismissed by the Apex Court [Venus Enterprises v. Commissioner - 2007 (209) E.L.T. A61 (S.C.)]". 9.6 We further note that the ratio of the Apex Court's decision in Jain Shudh Vanaspati case (supra), as contained in para 5 of its judgment, was applied by the court later in a Central Excise case (Re-Rolling Mills case) after observing that Section 11A of the Central Excise Act was pari materia with Section 28 of the Customs Act. The Hon'ble Supreme Court thus held against the assessee (Re-Rol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout jurisdiction. Madurai Power Corporation was engaged in the generation of electricity, for which Low-Sulphur Heavy Stock (LSHS) was used as primary fuel. The corporation procured LSHS at a concessional rate of duty under Notification No. 3/2000-C.E. For this purpose, they used a certificate issued by the competent authority, which permitted them to procure LSHS without payment of duty from various installations of Indian Oil Corporation Ltd. The question arose as to whether the benefit of Notification No. 3/2000-C.E. could be denied to the corporation and whether duty on LSHS could be demanded under Section 11A of the Central Excise without cancellation of the said certificate by the procedure laid down under Section 35E of the Act. It was this question which was answered in the negative by the Hon'ble High Court. We note that the Hon'ble High Court's decision was rendered without noticing the Hon'ble Supreme Court's judgment in Re-Rolling Mills case (supra) wherein the Apex Court passed the following order : "The learned Counsel for the parties do not dispute that this appeal is covered by the decision of this Court in Union of India & Ors. v. Jain Shudh Vanaspati Ltd. & An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unripe fruit of the plant "Long Pepper" was classifiable under SH 1211.90 only inasmuch as fruit of "Long Pepper" was predominantly used as medicine in Ayurveda, Siddha and Unani systems. In this connection, the learned counsel referred to the following literature : (1) INDIAN MATERIA MEDICA by Dr. K.M. Nadkarni : It contains Therapeutic Notes on action and uses of parts of piper longum in Ayurveda, Siddha and Unani systems. The parts used are stated to be immature berries (i.e., dried unripe fruits or fruiting spikes) dried in the sun, and stems (roots). The book states inter alia thus :- "Both, fruit and root are much prescribed in palsy, gout, rheumatism, lumbago, etc. Fruit is given to women after parturition to check haemorrhage and to ward off fever. As vermifuge it is one of the best remedies for colic in children. Fruit is used to some extent as a spice". (2) MEDICINAL PLANTS by S.K. Jain : This book states thus : "Long Pepper" consists of the dried fruits of the plant. It is used as a tonic, and in making irritating snuffs. It is also used in liniments for rheumatic pains and paralysis. A decoction made from the dried immature fruits is useful in chronic bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N Heading 12.11. He particularly referred to the illustrative list of products included in Heading 12.11 of HSN. The list included "Long Pepper" (Piper Longum). The learned counsel referred to ITC (HS) Classification 2002-07, whereunder "Pippali" was shown in the list of crude drugs "required for the manufacture of Ayurvedic, Unani or any other system of medicine". He also claimed support from Examination Order dated 2-7-2002 obtained by the Customs authorities from the Assistant Drugs Controller, wherein the subject goods was held to be a "crude drug." The learned counsel for the appellants also relied on certificates obtained from manufacturers of Ayurvedic medicines, to whom the appellants had sold the imported goods. He also relied on a letter dated 23-4-2003 of the Ministry of Health and Family Welfare, which stated that "Pippali" was used in the preparation of Ayurvedic medicines. The learned counsel also referred to an appendix to the Prevention of Food Alteration Rules 1955 to show that "Pippali" or "Long Pepper" did not figure in the list of spices. The learned counsel for the appellants also referred to the statements given by them under Section 108 of the Customs Act. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... International v. Commissioner of Customs, Nagpur - 2004 (169) E.L.T. 284 (Tri.-Mumbai), wherein it was found that "Long Pepper" was generally used as a condiment and was specifically mentioned under Heading 09.04 and it was held that Chapter Note 2 could not be read to mean that the Chapter (Chapter 9) excluded even those products which were specifically mentioned under Heading 09.04. The learned SDR, submitted that, if it was held that "Long Pepper" on account of its pharmaceutical use stood excluded from Chapter 9 by virtue of Chapter Note 2, its classification under the 8 digit entry (0904 11 10) in the Tariff Schedule w.e.f. 1-3-2003 would become redundant. He argued that Chapter Note 2 could not be so construed as to render the 8 digit classification of "Long Pepper" under SH 0904 11 10 redundant. According to the learned SDR, if "Long Pepper" is classifiable under SH 0904 11 10 from 1-3-2003, it can only be classified under SH 0904.11 pre-1-3-2003. In this manner, it was argued that the Tribunal's decision in Ganesh International (supra) was squarely applicable to the period of dispute involved in this case. 10.3 The learned SDR also relied on HSN Notes under Heading 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the genus 'Piper'. The only difference which we have found in relation to classification of Pepper under Heading 09.04 of the erstwhile 6 digit scheme and heading 0904 of the present 8 digit scheme is that the former is broadly genus-based whereas the latter is finely species-based. It goes without saying that all species of Pepper, such as Long Pepper, Light Black Pepper, Black Pepper, Green Pepper etc., which are seen sub-classified under the entry 0904 11 (Pepper, neither crushed nor ground) in the 8 digit scheme of classification belong to the genus "piper" described as "pepper, neither crushed nor ground" and classified under the entry 0904.11 in the erstwhile 6 digit scheme. In other words, "Long Pepper, neither crushed nor ground" was specifically classified under SH 0904.11 under Heading 09.04 in the 6 digit scheme of classification, pre-1-3-2003. In our view, the effect of Note 2 to Chapter 9 must be examined in this background. In Ganesh International [2004 (169) E.L.T. 284], the Tribunal observed that Chapter Note 2 could not be read to mean that the chapter excluded even those products which were specifically mentioned under Heading 09.04 and that the intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scope of the expression "other products of Heading 12.11" needs to be examined with reference to the relevant HSN Notes to Heading 12.11. There is a long list of products under these HSN Notes which say that all the listed products are included in Heading 12.11. One of the items figuring in this list of products in alphabetical order is : "Long pepper (Piper longum) : (roots and underground stems)." Conspicuously, only roots and underground stems of "Long Pepper" are seen included in the above item. Fruit (berry) of "Long Pepper" stands excluded from the above item, which would go to show that fruit of "Long Pepper is a product excluded from Heading 12.11. The learned counsel has argued that, as the above list of products is not exhaustive, it cannot be said that fruit of "Long Pepper" is not included in Heading 12.11. The same argument was rejected by this Tribunal in Ganesh International's case (supra) by observing thus : "True, it is not exhaustive in so far as the plants are concerned, but it is exhaustive, in so far as the products of the plants mentioned therein are concerned. We notice that the list mentions fruits of some other plants and not of long pepper. It is for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 74-SC-CX = 2010 (259) E.L.T. 10 (S.C.)]. In that case, the Hon'ble Supreme Court refused to entertain the department's appeal against the Tribunal's order on a valuation issue, after noting that the department had not challenged an earlier decision of the Tribunal on the same issue (in another assessee's case), which was followed by the Tribunal in the case of Bal Pharma Ltd. In the instant case of Ganesh International, the Revenue can legitimately claim support from the view taken by the Apex Court and argue that Ganesh International is bound by 2004 (169) E.L.T. 284 on the classification issue. 10.8 As it cannot be said that, in the shift from 6 digit scheme to 8 digit scheme of classification of goods, there was any significant change of law warranting exclusion of "Long Pepper" from Chapter 9 of the Tariff Schedule, the goods imported by all the appellants prior to 1-3-2003 are liable to be classified in the same way identical goods imported by M/s. Ganesh International after 1-3-2003 was classified by this Tribunal vide 2004 (169) E.L.T. 284. Accordingly, we hold that the goods imported by the appellants should be classified under SH 0904.11 of the Tariff Schedule as cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the counsel, nothing was suppressed by the appellant with intent to evade payment of duty. The goods was described and classified in the Bills of Entry on the basis of bona fide belief that it was a crude drug as certified by the Assistant Drugs Controller in the case of Ganesh International. Therefore, he argued that the extended period of limitation was not applicable to the case. 11.4 The learned SDR reiterated the relevant findings of the original authority and the appellate authority. He pointed out that the appellant chose to describe the goods are "Pippali" in Sanskrit, instead of "Long Pepper" in English with a view to classifying the item under SH 1211.90 and clearing it on payment of duty at lower rate than what was applicable to "Long Pepper" classifiable under SH 0904.11. It was also submitted that the proprietor, in this statement under Section 108 of the Customs Act, clearly admitted the classifiability of the goods under SH 0904.11. In the circumstances, the extended period of limitation was rightly invoked for recovery of differential duty from the appellant. 11.5 We have carefully considered the submissions. The appellant has submitted that, before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bills of Entry No. 296422 dated 23-9-2002, none of these letters stated the reason for the 'protest'. The proprietor did not state any reason for protest in his statement dated 11-12-2002 either. In the circumstances, we are constrained to hold that the "protest" of the appellant is of no consequence insofar as the invocation of extended period of limitation is concerned. 11.6 Nevertheless, the fact remains that the appellant's plea of limitation against the demand of differential duty on the goods covered by the 2 Bills of Entry was not considered by the lower appellate authority. The learned Commissioner ought to have examined on merits the contention of the party that they did not misdeclare the description of the goods for monetary gain and hence the proviso to sub-section (1) of Section 28 of the Customs Act was not applicable. We, therefore, remit the issue of limitation to the lower appellate authority for a speaking order, thereon. It goes without saying that, for the extended period of limitation to be invoked in the case, it has to be established that the appellant misdeclared the description of the goods in the Bills of Entry with intent to evade payment of the dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 112 of the Customs Act. 13.2 It appears from the records that Shri Gopal B. Ahuja, partner of Ganesh International and authorized signatory of Gautam Overseas, had stated under Section 108 of the Customs Act that "in Sanskrit, Long Pepper is called Pippali". The show-cause notice itself acknowledged this fact by noting that "Pippali is a synonym for Long Pepper in Sanskrit language". In reply to the notice, the appellants submitted that "in fact the notice admits in clear terms that "Pippali" is a synonym for "Long Pepper" and that the goods are in fact Long Pepper". 13.3 The learned counsel for the appellants has referred to literature on "piper longum" (Long Pepper) in this context also. 'THE INDIAN MATERIA MEDICA' gives the nomenclature as "Pippali" in Sanskrit and "Long Pepper" in English. 'MEDICINAL PLANTS' by S.K. Jain also provides the Sanskrit name of J "Long Pepper" as "Pippali". 'VEGETABLE DRUGS OF INDIA' by D. Sanyal and R. Ghose also states the Sanskrit name of "piper longum" as 'Pippali'. The name of the commodity in Hindi is also seen as 'Pippali' in this book. It is, therefore, not deniable that what is known in English as "Long Pepper" is known as ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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