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TMI Blog2014 (9) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... rts. It is not justified to give a ruling as to whether the goods fall under Heading 38.08 or 29, except to observe that the appellants in this case on the basis of the Circular No.34/2007-Cus, dated 17.9.2007 have made out at least a probable case for consideration as to whether the goods are separate chemically defined compounds falling under Chapter Heading 28 or 29 and not Chapter Heading 38, albeit the decision of the Supreme Court in Pesticides Manufacturing and Formulations Association of India, referred supra, will having a bearing on this case. In the present case, duty at 7.5% has been paid at the time of import. It is the difference of duty that is demanded. Hence, interest of the importer and the department can be taken note of for securing the ends of justice. - amount of pre-deposit order by tribunal modified - Decided partly in favor of assessee. - C.M.A.Nos.2442 and 2443 of 2014 M.P.Nos.1 of 2014 (2 Petitions) - - - Dated:- 2-9-2014 - R. Sudhakar And G. M. Akbar Ali,JJ. For the Appellants : Mr. S. Murugappan For the Respondents : Mr. A. P. Srinivas Standing Counsel for respondents 2 and 3 JUDGMENT (Delivered by R. Sudhakar,J.) These a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit the entire amount as ordered by the Additional Commissioner of Customs with interest. Since the appellants have not complied with the direction to pre-deposit, the appeals were rejected by the Commissioner of Customs (Appeals) on 27.6.2013 in Order-in-Appeal C.Cus.Nos.877 and 878 of 2013. 2.4. Assailing the said order, the appellants filed appeals before the Tribunal along with applications for waiver of pre-deposit. The Tribunal, after hearing the appellants on merits, by placing reliance on the decision of the Supreme Court in Pesticides Manufacturing and Formulations Association of India case, referred supra, held as under by Misc.Order No.40758 and 40759 of 2014, dated 28.5.2014: 4. The applicants imported insecticides in bulk form. They declared the classification under Chapter 29 in their Bills of Entry. Revenue re-classified the goods under Chapter 38 and demanded duty accordingly. The learned counsel on behalf of the applicants drew the attention of the Bench the relevant portion of the HSN Notes to substantiate that the goods are not put up in retail sale and therefore it cannot be classified under Chapter 38. The original authority confirmed the demand of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first respondent to ignore the factual pleadings and apply the judgment given by the Apex Court in the above case without proper appreciation of the facts involved and the claims made? 3.1. Mr.S.Murugappan, learned counsel for the appellants tried to impress upon us that the decision of the Supreme Court in Pesticides Manufacturing and Formulations Association of India, referred supra, was in relation to classification of goods under the Central Excise Tariff Act, whereas in the present case, it is relating to import of goods. He relied upon paragraph (4) of the said decision of the Supreme Court to state that all separately defined chemical compounds are classifiable under Chapter 28 and 29 depending on their composition. 3.2. The learned counsel for the appellants laid emphasis on the Note 1(a)(2) of Chapter Heading 38, which reads as follows: 1. This Chapter does not cover, (a) Separate chemically defined element or compounds with the exception of the following: (1) .............. (2) Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products. to state that separate chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pesticidal chemicals in concentrated form, labelling or relabelling of containers intended for consumers and repacking from bulk pack to retail packs or the adoption or any other treatment to render the product marketable to the consumer shall amount to manufacture'. Tariff Heading 38.08 now reads as: 'Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulphur-treated bands, wicks and candles, and fly-papers).' 4.2. In support of the order passed by the Tribunal, the learned Standing Counsel also placed reliance on paragraph (25) of the decision of the Supreme Court in Pesticides Manufacturing and Formulations Association of India, referred supra, regarding the Harmonized System of Commodity Classification, which reads as under: 25. The HS of Commodity Classification which was developed by the World Customs Organisation, Brussels was adopted by India also in the ITC (HS) Classification of Export and Import Items, 2002-2007 which was issued by the Government under Section 5 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Central Excise reg. It has been represented by the trade and industry associations that certain difficulties have been faced in classification of imported boric acid. Doubts have also been expressed by field formations as to whether 'Boric Acid', would be classifiable as 'separate defined chemical compound' under chapter 28 or as pesticides / insecticides, etc. under chapter 38 of the Customs Tariff. 2. Board discussed the issue of classification of Boric Acid and other separate chemically defined compounds. It was noted by the Board that 'Boric Acid' is a chemical compound specified under heading 2810 of the Customs Tariff. It has multifarious uses, which, interalia, include industrial raw material, insecticide use, etc. Following a Supreme Court's decision in the case of Union of India Versus Pesticides Manufacturing Formulators Association of India [2002 (146) ELT 19(SC)], the Board in the past had examined the matter regarding the classification of Boric Acid, and its admissibility for imports in terms of the Foreign Trade Policy. Accordingly, Circular No.61/2004-Cus dated 28.10.2004 was issued, classifying Boric Acid under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of levy and assessment thereof in respect of Boric Acid and similar separate chemically defined compounds. 8. In the case on hand, a perusal of the Bills of Entry filed by the appellants makes it clear that except one commodity, namely, Methyl Parathion, which falls under Heading 29201100, all other commodities imported are claimed under general heading Others - 29420090. Relying on the said circular, the appellants pleaded that they will be able to justify that each one of the imported goods is separate chemically defined compound and, therefore, it will fall under Chapter Heading 29 and not under Heading 3808. However, this circular has not been taken note of by the Commissioner of Customs (Appeals) or by the Tribunal. This Circular has been issued post the Supreme Court decision in Pesticides Manufacturing and Formulations Association of India, referred supra, and it is relatable to imports. 9. On a reading of the said circular, we are of the considered view that to some extent it gives relief to import of chemicals, if they are separate chemically defined compounds. When there is specific description of the commodities and specific entries are provided und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipality v. Amalendu Das, (1984) 2 SCC 436 and CCE v. Dunlop India Ltd., (1985) 1 SCC 260 cases without analysing factual scenario involved in a particular case. 10. Section 35-F of the Act reads as follows: 35-F. Deposit, pending appeal, of duty demanded or penalty levied. Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise Authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of the Revenue: Provided further that where an application is filed before the Commissioner (Appeals) for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Industries Ltd. v. Union of India, (2007) 13 SCC 487. Further, in the present case, duty at 7.5% has been paid at the time of import. It is the difference of duty that is demanded. Hence, interest of the importer and the department can be taken note of for securing the ends of justice. 13. For the foregoing reasons, we pass the following order: (i) On the questions of law raised, we are of the view that the Tribunal was not justified in ordering the pre-deposit in the manner stated in its order dated 28.5.2014 made in Misc.Order No.40758 and 40759 of 2014; (ii) Consequently, the order of the Tribunal dated 28.5.2014 is modified to the effect that the appellant in C.M.A.No.2442 of 2014 shall make a pre-deposit of ₹ 5,00,000/- Lakhs (Rupees Fifty Lakhs only) and the appellant in C.M.A.No.2443 of 2014 shall make a pre-deposit of ₹ 20,00,000 (Rupees Twenty Lakhs only) within eight weeks from today and subject to such compliance, the pre-deposit of balance dues stands waived and recovery thereof shall stand stayed during the pendency of the appeals before the Tribunal; and (iii) On appellants making such deposit as directed by this Court, the appeals shall be t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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