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TMI Blog2014 (5) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of tests mentioned above’ - CFL in its report dated 27.01.2014 clarified that ‘conclusively the product was declared safe food’ on the basis of food safety parameters under its rules and regulations, 2011 - The product could only be certified as safe food as u/s 3(q) of the F.S.S. Act, 2006 in which ‘Safe food’ means assurance that food is acceptable for human consumption according to its intended use - These reports have not been challenged by Ld. Advocate. It is found that the sample of the imported goods are not unsuitable for immediate consumption and therefore they would merit classification under CTH 080280 and not under CTH 0812 and chargeable to duty @ 100% BCD and 4% Additional duty - Since the declared CIF value is less than Rs.75/-, their import is not free in view of the DGFT Notification - Accordingly the imported goods are liable for confiscation u/s 111(d) as they are imported in violation of the provisions of D.G.F.T. regulation - They are also liable for confiscation u/s 111(m) as they were mis-classified by assessee along with the mis-declaration regarding their suitability for immediate consumption in the state in which they were imported. The goods were sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple is not adulterated in respect of the quality characteristics like presence of Aflatoxin, SO2 etc. As the goods were dry betel nuts in split condition, the department sought to classify the same under tariff sub-headnig 08028020 where applicable rate of duty is 100% BCD and 4% Additional duty. DGFT vide Notification No.10(RE-2012)/2009-14 dated 14.08.2012 allows importation of split betel nuts (botanical name Areca nut) provided CIF value is Rs.75/- and above per Kg. therefore the imported goods appeared to be restricted. Accordingly show cause notice was issued proposing recovery of differential duty, confiscation of the imported goods under Section 111(d) and 111(m) of the Customs Act, 1962 for mis-classification/mis-declaration of the impugned goods and imposition of penalty on the Appellant under Section 112(a)(i) of the Customs Act, 1962. In the meantime Applicant/Appellant filed Writ Petition No.626(W) of 2013 before the Hon'ble High Court of Calcutta requesting for provisional release of the goods. The Writ Petition was disposed for considering the provisional release of the goods in accordance with law. The goods were released provisionally subject to the condition to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nataka And Another vs. Sangam Solvent Textiles Ltd. reported in 2004 137 STC 231 Kar. 3.2 He submitted that SO2 is recognized as a class II preservative as per Food Safety and Standard (Food Products Standard & Food additives) Regulation, 2011. Any preservative, not being a preservative of Class I, may be harmful, even if it is used in permitted quantity. In the light of this, the SO2 being present in the imported goods certain processes are necessarily to be carried out on them to make them free from SO2 before sending the same to the market. 3.3 The Ld. Advocate also relied upon the clarification of HS on the Web Zollamter, where it is clearly mentioned that provisionally preserved betel nuts is classifiable under heading 0812 of HSN (page 73 of the Paper Book). 3.4 He submitted that where a commodity is classifiable prima facie under two headings the same should be classified under the heading which occurs later in the tariff (interpretative rule 3(c) of the Tariff) is relied upon. It is therefore submitted that as the Chapter Heading 0812 appears later to the Chapter Heading 0802 in the sequential order, the subject goods are classifiable under Chapter sub-heading 0812. 3.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that according to Chapter Note-3 to chapter 8, dried fruit or dried nuts of this chapter may be partially re-hydrated or treated for additional preservation or stabilization by heat treatment, sulphuring etc. and therefore mere presence of SO2 will not alter the classification of the imported goods which are specifically mentioned under Chapter sub-heading 08028020 as split Areca nuts He submitted that for an item to fall under Chapter heading 0812 it is mandatorily required that the presence of sulphur dioxide must make the imported goods unsuitable in that state (at the time of importation) for immediate consumption. However, in the present case the Plant Quarantine Laboratory in its report has categorically 'recommended for release (for consumption only)'. Further Central Food Laboratory in its report dated 10.12.2012 has reported that SO2 is present within limit and opined that sample is found not adulterated in respect of the tests mentioned above. It is the submission that word 'adulterated' has been defined in the Prevention of Food Adulteration Act, 1994, Section 2(ia), which reads under Section:- (ia) 'adulterated' - an article of food shall be deemed to be adjulterated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not produced any such licence import of subject goods is in violation of Foreign Trade Policy (FTP) and are liable for confiscation under Section 111(d) of the Act. 9. The Ld.Special Counsel has further submitted that 'self-assessment' system has been introduced in respect of Customs clearance of imported goods under Section 17 of Customs Act, 1962 with effect from 8/4.2011 and Sub-rule (4) ibid provides that (4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. Thus it was the responsibility of the importer, under self-assessment system, to declare the correct facts in regard to the imported goods and classify them under the appropriate heading. In the present case, the classification was dependent on the fact fo the unsuitability of the goods for immediate consumption and on this very question of fact the importer has mis-declared, as the test reports have indicated. 10. He submitted that as the classification of the imported betel nut was sought for by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) For additional preservation or stabilization (for example, by moderate heat treatment, sulphuring, the addition sorbic acid or potassium sorbate); (b) To improve or maintain their appearance (for example, by the addition of vegetable oil or small quantities of glucose syrup), provided that they retain the character of dried fruit or dried nuts. 0802 Other nuts, fresh or dried, whether or not shelled or peeled 0802 80 Areca nuts 08028010 Whole 08028020 split 0812 Fruit and nuts provisionally preserved (for example, by sulphur di oxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption. Ongoing through the above chapter notes, we find that merely sulfuring, heat treatment etc. for additional preservation, will not alter their classification. 14. The Ld.Advocate has submitted that in this case split betel nuts are preserved by Sulphur-Di-Oxide which is class II preservative and requires various processing after the goods were imported to make them suitable for human consumption and therefore being unsuitable in that state for immediate consumption they are correctly classifiable under chapter 0812. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem which is a guideline to determine the scope and content of the harmonized system sub-headings, it is noticed that the products classifiable under chapter heading 081290 are - 0812.10 - Cherries 0812.90 - Other Provided they remain unsuitable for immediate consumption in that state Such products are used mainly in food industry (manufacture of jam, preparation of candied fruits etc.). The products most commonly presented in this state are Cherries, Strawberries, Oranges, Citrons, Apricots and Greengages. They are usually packed in casks, trays or open-lath type containers. As against this the imported goods are not presented in packed casks, trays etc. 17. The Ld.Advocate has referred to Board's Circular dated 31.07.1997 and the judgement of the Hon'ble Karnataka High Court in case of Vishista Solvent Oils Pvt. Ltd. to support their plea that the exemption is available/admissible so long as the oil imported is used for edible purposes even after refining. We find that the issue involved in the above citations, was regarding applicability of exemption Notification. Thus, we find that the Board's Circular and the judgement in case of Vishista Solvent Oils Pvt. Ltd. cited by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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