9911796707
TMI Blog2017 (12) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... composition and had undergone the process - In the case at hand also there has been no evidence adduced, say by way of an expert opinion or test report from a competent authority / organization to support the claim of the department, that the products are food preparations - the impugned Concentrated Mineral Drops imported by the appellant will not merit classification under 21069099. Valuation of imported goods - enhancement of value - whether the enhancement of the declared import values by the department is in order? - Held that: - From the narration in the SCN it is found that certain details had been retrieved from the hard disc and other documents recovered from the premises of the appellant. From these documents, it emerged that commercial invoices submitted by the appellant at the time of import indicated lower values per bottle against actual values - the appellant has not disputed the fact of recovery of the hard disc / files / documents which have been analyzed by the Commissioner as aforesaid. They have also not been able to adequately refute, by adducing any evidence to the contrary that the adjudicating authority has erred in arriving at the aforesaid conclusions conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant Company and other persons who were noticees in the proceedings. 1.1 Appellants filed a writ petition W.P(C) 6660/2012 before the Hon'ble High Court of Delhi for issue of direction to Customs authorities to permit provisional release of goods. The Hon'ble High Court of Delhi directed the Commissioner of Customs to deliberate with respect to whether or not clearance ought to be made qua the consignment covered under the earlier Bill of Entry dated 06.05.2011 and thereafter pass an appropriate order as deemed fit. Another writ petition was preferred before the Hon'ble High Court of Madras as WP No. 31734/2016 and the Hon'ble High Court vide an order dated 26.10.2016 taking note that the adjudication proceedings had been completed and the Order-in-Original had been passed, held that the relief claimed to direct the department to grant provisional release of the goods is not maintainable. Therefore, only option available for the petitioner is to move the CESTAT for appropriate interim relief. On writ appeal No. 142/2017 preferred by the department against this order, vide order dated 16.12.2017 the Hon'ble High Court ordered as under:- 5. The appeal filed by the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Added Anti-Cacking or Free Flowiong Agents; Sea Water. The imported goods of the appellant are exactly similar to the goods imported by Keva Industries. The goods imported by Keva Industries were classified as sea waterunder CTH 2501 by the Order dated 18.07.2010 passed by the Ld. Commissioner and further affirmed by the Order dated 10.02.2012 of the Tribunal. The chemical composition of the imported goods of the appellant and that of the imprted goods of Keva Industries are exactly identical. Therefore, both the imported goods must be classified under same heading of 2501. The detailed description of imported goods of the appellant from MRI, USA viz., Andersons Concentrated Mineral Drops (CMD) and of the imported goods of Keva Industries from Trace Mineral Research, Utah, USA viz., Concentrate Trace Mineral Drops are as under: Appellant Keva Industries Chloride Magnesium 250 mg Magnesium 600 mg Chloride 690 mg Sulfate 220 mg Sodium 5 mg Sodium 45 mg Potassium 3 m g Lithium 3 mg Sulfate 37 mg Boron 1-3 mg Lithium 395mcg 0.61/9 mg Boron 370 g. iv) The Ld. Commissioner wrongly classified the imported goods under Customs Tariff Heading 2106 which cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted goods makes reference to goods such as Mithans, Mithai, Namkeens, Mixtures, Bhujia, Chabena, which are produced by mixing their ingredient and then frying or roasting them in hot oil. These goods mentioned in the item are eatables and does not have mineral salt/sea water as their main constituents. It is submitted that imported goods in question had not gone through frying or roasting but a simple natural evaporation. In any case, the onus of proof is on the department to prove that the imported goods are similar to those mentioned under supplementary notes of 21069099. (d) Emphasis is laid on Note 5 of Supplementary Notes of Chapter 21:- "Heading 2106 (except tariff items 2106 9020 and 2106 9030), inter alia, includes, (a) protein concentrates and textured protein substances; (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; (c) preparations consisting wholly or partly of foodstuffs, used in the making of beverages of food preparations for human consumption; (d) powders for table creams, jellies, ice-creams and similar preparations, whether or not swee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods in the category of food supplement or food preparation but as sea water/mineral drops which are used to treat the deficiency of minerals and salts in the body. The imported goods are leftover of natural evaporation and have not gone through any process or preparation and none of its constituents are added to them. The imported goods are not even considered as food or food preparation by the consumers or by the Central Food Laboratory but is mineral drops from the inland sea lake of Utah, USA. (vii) Nanosil is a suspended silver solution, which is manufactured by a patented process in which Nanosilver particles are created and suspended in distilled water. It is submitted that Nanosil has a good effect on persons suffering from infections and other diseases like Cancer etc. The Department and the Ld. Commissioner failed to appreciate the prophylactic qualities of Nanosil and erroneously and wrongly contended that it shall fall under Customs Tariff Heading 21069099. The correct classification for Nanosil should be and is rightly CTH 30045020 and not under CTH 21069099 as contended by the department or as confirmed by the Ld. Commissioner. Further, since the imported goods Nano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 55 of the said SCN. The Departments stand merely relies upon the agreement between the appellant and the Mineral Resources Intl. Inc., whereby the appellant was entitled to a discount of 2.5 to 3% on account of advance payment, a discount of 5% on account of order of full container load, 10% discount for full pallet load and a further discount of 5% for adhering to the schedule. The Department in its SCN has challenged the discount actually advanced to the appellant on the ground that the appellant never imported 4 containers of CMD in 2011-12 and also that the discounts meant for containers had been extended in respect of consignments shipped by air. It is submitted that the appellant had always made prepayment, always ordered pallet load and always ordered pallet load and always followed the order schedule as renegotiated with MRI and therefore that appellant requested for full discounts and being a new association MRI was also pleased to oblige. It is not out of place to mention herein that the invoices were raised on actual pricing after the said discounts and the payments made by the appellant were also in accordance with the said invoices. It is submitted that in the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with food or beverages so that daily consumption will become 2 ml. It is stated that it is not a drug and not for medicinal use. All those would show that CMD is a dietary supplement to supplement the mineral deficiencies in the human body especially magnesium and trace elements. Elete also is from the same source, but with lesser concentration. These products are rich source of magnesium apart from other trace elements and minerals and inter alia support a health PH balance. Nanosil is claimed to be a suspended silver solution which enhances general immunity. From the labels it is discernable that these are food supplements and not medicine. Therefore, the correct classification is CTH 21.06 under residual heading 21069099 as other food preparations not elsewhere specified or included. 3.2 With regard to the mis-declaration of the value the Ld. AR submitted that in one of the e-mails dated 07.01.2011, covering the second shipment, it was mentioned that prices that I quoted are the prices of Schedule E in the contract but with an additional 2.5% discount for prepayment etc. It was stated in the e-mail that by adopting such method appellants would save customs duties. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough sweat; that it is also a supplement which is used for reducing mineral deficiencies in the body. Appellant has also represented that both CMD and Elete are pure, all-natural, low sodium mineral concentrates, with a healthy pH balance. Hence these are 100% natural products and cannot in any manner be classified under Heading 21069099 which covers "food preparations". 7. The Appellants had classified and sought to clear the impugned goods CMD and Elete under CTH 30045020 as preparations of minerals and their supplements or under the residual heading 21069099 as "other". It is also noticed that in respect of some imports, they have claimed classification of CMD under CTH 220190. 8. The appellants have imported yet another product Nanosil, which, according to them, is a suspended silver solution, manufactured by a patented process in which they create Nanosil particles suspended in distilled water which is used as a supplement and not as a medicine. In respect of Nanosil, the department has held that it should fall under CTH 21069099. Appellant however contend that Nanosil should be correctly classified under CTH 30045020 which covers "preparations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e : This space is purposely left blank 12. From the above label, what is seen claimed is that CMD is "originally, all natural, sea mineral supplements from UTAHs Great Lake made through solar evaporation". The ingredients of the bottle have been declared as pure Salt lake concentrate containing magnesium, chloride, sodium and sulphate, lithium and boron. It is also indicated that CMD is not drug. Not for any medicinal use. No approved therapeutic claims". For these reasons, appellants have submitted that the impugned product is nothing but concentrated salt water of great salt lake in UTAH, USA. Appellants have also claimed classification under CTH 2501 as sea water. The department argues that the impugned items CMD are to be classified as "food preparations not elsewhere specified or included under 21069090. 13. We are unable to find any facts or evidence adduced by department to establish that CMD is a food preparation per se. By its very nature the use of the word preparations" in heading 21.06 will surely result in foods to be subjected to some type of preparation or in other words, food that has been worked on so as to result in substance like those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order that CMD drops would fall under 21069099. 16. Appellants have also brought to our attention the decision rendered by Tribunal in respect of identical item imported by their competitors namely KEVA's CONCENTRANCE MINERAL DROPS which, according to them, were held not to be classified under 2106 as alleged by department. Appellant had also submitted sample bottle of (30 ml) of the said product imported by Keva Industries. The label of which is scanned and reproduced below :- This space is purposely left blank This space is purposely left blank 17. On a comparison of the labels of the appellants CMD drops and that of Kevas Concentrance Mineral Drops, it is noted that both claim to be products from Great Lake of Utah and more or less make the same claims about the ingredients and minerals therein. Both the labels indicate an advisory that the product is not a drug / medicine and not intended to treat, prevent or cure any diseases. In our opinion, therefore Keva's Minerals Drops can be considered as a product identical to that imported by the appellant herein. We then find that the Tribunal in the case of CC New Delhi Vs Keva Industries - 2013 (292) ELT 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain deficiency. Now the question to be decided is under which tariff entry the goods fall. We are satisfied that the goods being natural sea water has not gone any preparation to be called as food preparation or any other preparation. There is no test report brought out by Revenue to discharge burden of proof to claim that the goods in question submit to tariff entry 2106 and also to satisfy that it is a preparation with or without certain composition and has undergone process. In such circumstances, stand of respondent does not appear to be devoid on merit. 5. We had anxiety in the course of hearing to find out edibility of the goods and whether is fit for human consumption. Revenues ground does not discard the claim of human consumption and utility of the goods for the said purpose even though such goods are lying in custody of Revenue for long time. Once we are satisfied that the goods have not undergone any preparation, there is no scope to discard the finding of the first appellate authority made in para 6(d) of the appellate order where he has analyzed the HSN note of heading 2501 and there is nothing contradictory evidence brought by revenue to discard his observation. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ottle as ₹ 1300/.- 15. Recovery of these documents or their authenticity has not been disputed by appellant. The invoice documents of appellants have been analysed in detail by the adjudicating and the conclusions arrived are re-produced for ready reference :- "27. The Show Cause Notice also brought out in detail in paras 51,52, 53 & 55 with regard to the mis-declaration of the value and mis-declaration of terms of invoice. M/s.Itspossible had entered into a contract with their supplier i.e., MRI for the exclusive sales of the products of MRI. On perusal of the Broker Agreement of 2011 dated 30/12/2010 between MRI and Itspossible and subsequent amendment to Schedule E of the said agreement, it is noticed that as per the said agreement, the full container discount and discount for meeting schedule are actually available only when at least 4 containers are shipped each year. In the instance case, Itspossible had never imported 4 containers of CMD in 2011 or 2012. Further, it is also pertinent to mention that the discounts meant for containers were also extended in respect of consignments shipped by Air. When Shri Vipin Kumar was questioned about the same, he stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted to mis-declaration of the actual freight paid and also non-declaration of pre-importation charges such as Ex-Works, CC charges etc., incurred in respect of some of the consignments a discussed in para 53 of the Show Cause Notice. ii. When Shri Vipin Kumar was questioned about the above discrepancies, he admitted that freight charges were not properly declared to the Customs and the values mentioned at para 55 of the Show Cause Notice are correct as they reflect the actual freight and other charges paid by them for their imports and he undertook to pay the differential duty arising out of this. When Shri Venkatesan was questioned about the same, he stated that the mis-declaration of freight charges was known to Shri Vipin Kumar, that freight amount, ex-work charges and fuel surcharges (levied in case of air consignments) are includable in the assessable value; that however, as requested by Shri Vipin Kumar, he had not included the ex-work charges and fuel surcharges in the assessable value; that at times they had under declared the freight charges also. iii. It is evident that in order to reduce the liability of Customs duty, Itspossible, besides mis-declaring the descri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
