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TMI Blog2015 (7) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Appellant was issued a show cause notice for imposing penalty for wrongly availing the benefit of export promotion scheme viz. Vishesh Krish & Gram Upaj Yojana Scheme (VKGUY) for mis-declaring that export product which has been declared as Oil Cake Meal, expeller variety when actually the oil cake meal was made by solvent extraction method. It was the case of the Appellant that the Castor seeds are subjected to a process of expelling in an expeller which is a high pressure continuous pressing machine. That in expelling process, 90 to 92% of the oil is extracted. That the remaining 8 to 10% of the oil left inside the oil cake can be extracted from the oil cake only by solvent extraction. That according to their view, a part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal was initially put up before DB on 03.06.2015 and DB sitting at Ahmedabad by note-sheet order transferred the case to be listed before SMB. As the only issue appealed against is imposition of penalty, which is less than Rs. 50 lakhs, therefore, SMB has jurisdiction to decide this appeal. 3.1 Learned Authorised Representative also argued that the issue involved is one of classification of the product oil cake meal whether expeller variety or not. On merit, it was his case that when 10% of the oil left in the oil cake, after expelling process, is recovered by adopting solvent extraction then the resultant cake meal exported will not be expeller variety which has been deliberately mis-declared by the Appellant in shipping bill in order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Appellant that the oil cake meal can be made by 100% solvent extraction or partly by physical extraction and partly by solvent extraction. That in the opinion of the Appellant when both the processes of physical extraction and solvent extraction are involved in making oil cake then that oil cake meal will remain expeller variety. It is the case of the Appellant that 100% oil extraction from oil seed is not possible by physical expression of seeds. That if Revenue s argument is believed that no oil cake meal will be of expeller quality. It was also argued on behalf of the Appellant that when 100% Oil is extracted from the oil seeds by solvent extraction, then only oil cake meal will be called solvent extracted meal. That having this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no doubt that in the present proceedings, oil was extracted by a combination of both by expelling process and by solvent extraction. There was thus a bonafide opinion on the part of the Appellant, based on their understanding, that when both the processes of expelling and solvent extraction are used then the resultant meal will continue to be called as expeller variety of oil cake meal. Though the reasoning given by the Appellant was not accepted by the Adjudicating authority, while deciding the classification, but it cannot be said that there was a deliberate act of mis-declaring, knowingly and intentionally, while describing the export product. 9. It is also observed that Hon'ble Apex Court in the case of Northern Plastic Ltd (supra) Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of exemptions under notifications which really did not apply to the imported goods, the appellant had intentionally tried to evade proper payment of customs duty." 10. In the light of above case law also, if an incorrect exemption is claimed by the Appellant, as a matter of belief then it cannot be considered as a declaration intentionally made to evade customs duty. The ratio of the above law laid down by Hon'ble Apex Court will be applicable to the present facts & circumstances as the Appellant was holding a bonafide belief that so long as majority of the oil is extracted by expelling process, the resultant meal will continue to be classified as expeller variety of oil cake meal. In view of the above observations and settled propo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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