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TMI Blog2016 (12) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual function but were changed by the Appellant’s employee in consultation with the Management, we are of the view that the goods does not merit classification as parts of dairy Machinery. For the reasons stated above and looking to the fact that the issue involves of intended mis-declaration, mis-classification and suppression of facts we do not find any infirmity in the order passed by adjudicating authority and uphold the same in as much as the same is related to Appellant M/s Yakult Danone (India) Pvt. Ltd. As regard penalty imposed upon Shri Kiyoshi Tatsui Oike, Managing Director is concerned we find that he was concerned with overall working and not particularly involved in any contumacious conduct. The correspondence for changes of HS codes and alteration of SPE sheets was an act between its parent company M/s Yakult Honsha Ltd, Japan and Mr. Tomoshi Suzuki on the advice of Consultant M/s SBBFL. We thus find that no active involvement of Shri Oike is appearing in record that he orchestrated the alleged acts of violation of Custom laws and intended to cause revenue loss. We therefore do not find it fit to impose penalty and set aside the penalty imposed upon him - As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said plant comprised of machineries viz (1) tanks for blending, culturing, storage etc; (2) water sterilizer for water sterilization ; and (3) other machineries such as injection moulding machine, Unscrambler, Selector, Filling machine, Refrigeration Unit etc. That they had declared the description of goods of the two of the said five consignments (2nd and 3rd consignments) as dairy machines. During scrutiny of records seized from CHA, it was found that the supplier of machine M/s Yakult Honsha Co. Ltd has provided specification of production equipment sheet to the Appellant bearing HS codes as 8422.49, 847982 and other codes whereas the same was changed to 8434 2000 while submitting the same to the customs for clearance of said imported machines. Shri Kiyoshi, the Managing director in his statement dt. 12.09.2011 and 13.09.2011 also stated the HS code of imported machines of 2 nd and 3rd consignment appearing in original SPE sheets were 842890, 847982, 842139, 844730, 842230 842839,844359. He also admitted that the description given in original SPE sheet does not match with the HS codes declared in Bill of Entries. That the machine of 3 rd consignment were used for manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic bottles for feeding in filling machines (Sr. No. 7 of Annexure B) (viii) Shrink Wrap Machine: It packs Yakult filled plastic bottles in the packs of 5 bottles or 50 bottles(Sr. No.8 of Annexure B) (ix) Plastic Injection Blow Machine: It manufactures empty plastic bottles for filing with Yakult (Sr. No. 9 of Annexure B) (x) UHT/High Temperature Machine: It is used for ultra heat treatment of the mixture of skimmed milk powder, glucose and water (Sr. No. 10 of Annexure B) (xi) Dissolving tank: It is tank of 15000 Ltr capacity. It mixes skimmed milk powder with glucose and water as mentioned at (i) above (Sr. No. 11 of Annexure B) (xii) Reverse Osmosis Water Treatment Plant : It filters and purifies water (Sr. No. 12 of Annexure B) It was contended in the SCN that the imported machines mentioned at i to v xi have functions as specified under CTH 84798200. The machines covered at vi, vii viii appear to be functioning for filling, sealing and packing of plastic bottles which were classified under heading no 842230. The machinery mentioned at (ix) appear to be plastic injection/ blow machine classified under chapter 8477. The machine mentioned at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon its understanding of Customs Tariff. That the imported goods involved in the case were cleared by availing exemption under Notification No. 6/2006 - CE dt. 31.03.2006 (Serial No.11) which accorded complete exemption from CVD on Dairy Machine classified under 84.34 of the Tariff. The imported items are correctly classifiable under heading 84.34. The HSN Explanatory Notes to the heading states This heading covers mechanical milking machine, and other machines, whether for farm or industrial purposes, used in the treatment of milk or converting it into dairy products . The plant is set up for manufacture of Dairy based drink :Yakult falling under Heading 84.03 of the Tariff which is undisputed. That the relevant portion of Explanatory Notes pertaining to Heading 84.34 relied upon by the department is for classification of Vats/ Tanks/ Vessels/ is dependent on feature of product. The Appellant also relied upon the certificate dt. 10.05.2013 of Dr. Jasbhai Prajapati. SMC college of Dairy Science, Certificate dt. 25.06.0213 by Dr. Sushil Kumar, NDRI, Karnal, certificate dt. 16.05.2013 from the manufacturer of the imported machinery that the same has been specifically manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement by the Appellant the goods cannot be confiscated. The ld. Counsel also submits that the impugned order is not sustainable as cross examination of Shri Anil Choudhary was not granted, expert certificates were not considered and no reasoning was provided for rejecting the classification of goods under heading 84.34. 4. The Counsel appearing for Appellant Shri Anil Choudhary requests for exonerating him on the ground that he was merely an employee and all the acts were on the direction of the company. That he was not benefitted personally. All the acts of alleged evasion were done by one Shri Suzuki who fled the country. He submits that from the correspondence exchanged between Mr. Suzuki and Yakult Honsha Tokyo, the parent company of the Appellant company that all the documents including SPS Sheets were prepared at Tokyo office and forwarded to them. That such changes were made on the advice of M/s SBFFL who were consultant for the clearances of imported goods. That in his statement he had clearly explained his and other officers role. That from the mail between Tokyo company and Mr. Suzuki which are annexures to show cause notice, it is clear that on the one hand there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers found that the original Specification of Production equipment Sheets (SPE Sheets) received from the supplier containing HS codes were altered by the importer so as to show the same as Dairy machines . The original sheets issued by the supplier contained the HS codes showed the codes of machines of consignment as under 842890, 847982, 842139, 847730, 842230, 842839, 844359. The description of goods in original sheets i.e goods of the second consignments were steel tanks for various purposes such as dissolving tank and parts. Culture tank surge tanks etc, hopper, air unit, humidity control unit and other parts. The goods in third consignment were Moulding machine and parts , filling and packing machine, filling machine conveyor and filling machine conveyor printer. However in the sheet submitted to the Custom officers the codes were altered to 84342000 and the description of goods were shown as Dairy machine and parts, which enabled the importer to claim benefit of exemption notification no. 6/2006 - CE dt. 01.03.2006. It is also an undisputed fact that the alterations were done by the Appellant, its parent company who had shipped the goods, the director Shri Oike, employee Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd even the original SPE Sheets provided that HS Codes. Similarly the other goods are also classifiable as per their individual description as stated in show cause notice. 8. The contention of the Appellant that Section Note IV to Section XVI of Tariff is applicable is not correct as initially the goods were classified under the respective HS code and at the time of filing of Bill of Entry the same were changed. The Section Note 2 (a) to Section XVI in such circumstances would be the guiding principle to classify the goods. Our views are also guided by the judgment of Hon ble Supreme Court in the case of HMT Ltd Vs. Commissioner of C. Ex. Cus., Aurangabad 2007 (214) E.L.T. 10 (S.C.) wherein the Hon ble Apex Court while upholding the judgment of the Tribunal observed that CESTAT found that as per HSN Explanatory Note to Chapter Heading 84.34 the machines for processing milk depend on the principle of heat exchange and they are excluded from coverage under Chapter Heading 84.34 and the heading also excludes refrigerating appliance (whether or not specifically designed for cooling or keeping milk and milk cooling vats incorporating evaporator of the refrigerating unit from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein that All these parts would doubtlessly fall under a number of headings. The Tribunal in the said case was considering the availability of Notification No. 205/88 (Sl. No. 18) which according to the Tribunal was generally worded so as to enable anything used in the construction of boilers to be covered thereunder. Accordingly, we find no infirmity in the impugned Order and reject the appeal. In view of the fact that the goods were correctly classifiable in the SPE Sheets as per their respective description and individual function but were changed by the Appellant s employee in consultation with the Management, we are of the view that the goods does not merit classification as parts of dairy Machinery. For the reasons stated above and looking to the fact that the issue involves of intended mis-declaration, mis-classification and suppression of facts we do not find any infirmity in the order passed by adjudicating authority and uphold the same in as much as the same is related to Appellant M/s Yakult Danone (India) Pvt. Ltd. 9. As regard penalty imposed upon Shri Kiyoshi Tatsui Oike, Managing Director is concerned we find that he was concerned with overall working and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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