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TMI Blog2018 (1) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... poultry agencies have not carried out any further manufacturing activity with the goods purchased and sold them directly in the market as a ‘animal feed supplement’. Further, when the goods imported vide B/E No. 5420683, dated 27-5-2016 and B/E No. 5490477, dated 2-6-2016 were referred to Animal Quarantine and Certification Service, Govt, of India, reported that the goods referred to them contained ‘Meat and Bone meal’ which comes under the category of ‘Livestock products’ and is categorized as high risk commodity. As per N/N. 2666(E), dated 16-10-2014, the import of the said product can be done only after obtaining Sanitary Import Permit (SIP) in advance from the Ministry of Agriculture & Farmers’ Welfare, New Delhi. Secondly Tuticorin port is not authorized for import of livestock products. It clearly proves that the goods imported cannot be termed as ‘Feed additives or premixes’ and in fact is ‘animal feed’ and therefore, the Bench is of the considered view that the benefit of the exemption notification cannot be extended to the goods in question and accordingly, rejects the claim of the applicant for extending the benefit. Finalization of provisional assessments - Held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications were allotted with numbers S.A. Cus/20-24/2017-SC and were allowed to be proceeded with by the Bench on 20-4-2017. 1.3 The SCN demands inter alia differential Customs duty to the tune of ₹ 1,58,67,518/- (Rs. 1,42,38,418/- pertaining to M/s. Shiva Biochem and ₹ 16,29,100/- pertaining to M/s. P.N. Enterprise) and applicable interest thereon. It was also proposed in the SCN to finalise the 4 provisionally assessed Bills of Entry under Section 18 of the Customs Act, 1962, as listed in the Annexure VI (including two live Bills of Entry) to the instant SCN. There is also a proposal in the SCN for appropriation of an amount of ₹ 2,38,25,532/- towards the duty and other liabilities paid by M/s. Shiva Biochem, Rajkot and appropriation of an amount of ₹ 16,29,100/- paid towards duty liability by M/s. P.N. Enterprise, Morbi. 1.4 In this regard, Shri Ameet K. Dedhia, Proprietor of M/s. Amit Cargo International, one of the authorized CHA of M/s. Shiva Biochem, Rajkot and M/s. P.N. Enterprise, Morbi had also filed settlement applications separately before the Bench on 19-4-2017 as co-applicant of M/s. Shiva Biochem, Rajkot and M/s. P.N. Enterprises, Morbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tch of the consignments were taken care by him. During the search operation thee-mail correspondence, retrieved from him indicated that the imported goods purchased by M/s. GBKAL Overseas Pvt. Ltd. were animal feed supplement and not Organic Manure Composite Fertilizer, as declared by M/s. Shiva Biochem, in the customs document for import. During the search, the laptop of Shri Ameet K. Dedhia containing several e-mail correspondence along with other incriminating documents were seized under the Customs Act, 1962 under mahazar proceedings dated 9-6-2016. 1.10 Scrutiny of the documents and in pursuance of the information revealed that the import consignments of M/s. Shiva Biochern, Rajkot, were sold to M/s. GBKAL Overseas Pvt. Ltd., Rajkot, as such and subsequently packed and dispatched in 50 kg. packing to M/s. Shanmuga Feed Mills, Coimbatore one of their customer as Animal Feed Supplement . Accordingly, a search was conducted at M/s. Shanmuga Feed Mills by the Officers of DRI on 10-6-2016. Statement was recorded from Shri Shanmugam, Proprietor of M/s. Shanmuga Feed Mills on 10-6-2016, wherein he inter alia stated that they would place the order Animal Feed Supplements over ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts lesser duty; that since, the supplier company was in the name of his co-brother (Shri Vipul Bavarva), Shri Hiran Kalariya arranged documents for the import of animal feed supplement in the name of Organic manure - Composite Fertilizer ; that they had imported three consignments of animal feed supplement by declaring the same as Organic Manure - Composite Fertilizer in the name of M/s. P.N. Enterprise and at the end of Oct, 2015, M/s. P.N. Enterprise, which stood in his name, was closed and M/s. Shiva Biochem was started as a partnership firm, with his brother-in-law; that Shri Hiren Kalaria and his co-brother Shri Vipul Bavarva as partners and the imports were continued in the name of Ms. Shiva Biochem; that Shri Hiren Kalaria, his brother-in-law was handling all the imports in the name of M/s. P.N. Enterprise; that all the consignments of imported animal feed supplement were sold to M/s. GBKAL Overseas (P) Ltd., and from there they raised invoices for the sale of animal feed supplement to other traders; that though they had declared the imported animal feed as Organic Manure - Composite Fertilizer at the time of import, they mentioned the name of the goods only as anima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. CAGEMAX and filed the Bill of Entry with Customs under Chapter Heading 3101 and paid lesser duty; that likewise, he had imported two more consignments in the same method from Netherland, in the name of M/s. P.N. Enterprise and evaded customs duty; that due to some financial problems in the company, Shri Narendra, Proprietor, had closed down the firm M/s. P.N. Enterprise; that after closure of the company M/s. P.N. Enterprise, he started M/s. Shiva Biochem (IEC No. 2415005983), which is a partnership firm with Shri Ameet K. Bagthalia as another partner for the transaction of Protein meal animal feed supplement in the name of Organic Manure - Composite Fertilizer ; that the entire operations relating to M/s. Shiva Biochem were taken care of by him; that he directly negotiated with M/s. CAGEMAX for the purchase to be made by M/s. Shiva Biochem through his overseas company M/s. Rehakal International, Poland, with the help of his employee in Poland, who raises the invoice and packing list in the name of M/s. Shiva Biochem, with the description of the goods as Organic Manure - Composite Fertilizer ; that in receipt of all documents from his employee he or Shri Vipul Bavarva used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that day itself. 1.17 Statement was recorded from Shri Vipul Bavarva, Director, M/s. GBKAL Overseas, Rajkot and Director in M/s. Shiva Biochem, Rajkot wherein he inter alia stated that he admitted their mistake to have misdeclared the imported goods to avoid payment of higher rate of duty applicable to the product Protein meal animal feed supplement imported by them. 1.18 The evidences indicated that M/s. Shiva Biochem had misdeclared the imported goods as Organic Manure - Composite Fertilizer , whereas the actual imported goods were Protein meal animal feed supplement , in order to evade payment of appropriate Customs duty. Accordingly, 435 MTs of imported goods having assessable value of ₹ 1,28,11,600/- in 18 containers covered under Bill of Entry No. 5420683, dated 27-5-2016 and 337 MTs having assessable value of ₹ 97,94,711/- in 14 containers covered under the Bill of Entry No. 5490477, dated 2-6-2016 were seized under Section 110 of the CA, 1962, in the presence of Shri Hiren Bhagvanji Kalariya and Shri Vipul Lalji Bhai Bavara under mahazar proceedings dated 10-6-2016. The seized goods contained in the sealed containers were handed over to the Manager, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l animal feed supplement imported vide Bill of Entry No. 5420683, dated 27-5-2016 and 5490477, dated 2-6-2016 imported by the M/s. Shiva Biochem contained meat and bone meal which came under the category of livestock products and categorized the same as high risk commodity. Moreover, the import of the said product could be done only after obtaining a sanitary import permit in advance from the Ministry of Agriculture and Farmer s Welfare, New Delhi and Tuticorin Port was not authorized for import of livestock products. The AQCS had also requested the Department to take immediate action regarding deportation/destruction at the cost of the importer under intimation to them, since the imported goods had not fulfilled the mandatory requirements. 1.24 M/s. Shiv Biochem and M/s. P.N. Enterprise, vide letters dated 13-8-2016 and 12-8-2016 respectively contented that they were eligible to pay the applicable effective rate of Customs duty of the goods covered by the correct CTH (@ 20% ad valorem under Sr. No. 106 of Notification No. 12/2012-Cus., dated 17-3-2012) which was not taken into consideration. 1.25 Based on the evidences and statement recorded from various entities involved, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... International and M/s. Filaha International Ltd., Dubai are all companies related to M/s. Shiva Biochem; M/s. Reha International, M/s. Filaha International, M/s. Rehaka International, Dubai and JHK POL Sp Zoo, Poland were the related companies of M/s. P.N. Enterprise and M/s. Shiva Biochem and the same was suppressed to Customs; M/s. Jasta, Poland and M/s. CAGEMAX, Netherlands were the actual suppliers of Protein Meal Animal Feed Supplement whereas the invoices were raised from related companies of the importers viz., M/s. Filaha International Ltd., Dubai and M/s. Rehakal International SP Z.O.O, Poland (subsequently renamed as M/s. JHKPOL SP. Z.O.O, Poland); the facts were not disclosed to Customs Department at the time of filing Bill of Entry for clearance of the impugned goods; Though, initially, protein meal animal feed supplement was imported by M/s. P.N. Enterprise with correct declaration under CTH 2309 90 10 and on payment of appropriate duty, over a period of time, the description of the same goods was changed to Organic Manure Composite Fertilizer by M/s. P.N. Enterprise in respect of imports made by them and by M/s. Shiva Biochem, since its inception. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Narendra Hirjibhai Adroja was the proprietor of M/s. P.N. Enterprise, Morbi and Director in M/s. GBKAL Overseas P. Ltd., Rajkot and taking care of finance and documentation. As proprietor of M/s. P.N. Enterprise, Morbi, he had actively involved in the unlawful activity with the guidance of Shri Hiren Bhagvanji Kalaria and misdeclared the description of the imported goods in three bills of entry with fabricated invoices and thereby evaded payment of appropriate customs duty. Also M/s. P.N. Enterprise had cleared their earlier five consignments with actual description through Tuticorin Port without being obtained Sanitary Import Permit from Ministry of Agriculture and Farmer s Welfare, New Delhi prior to the import; Shri Ameet K. Dedhia, proprietor of M/s. Amit Cargo International was well aware of the offence committed by M/s. Shiva Biochem and M/s. P.N. Enterprise in the misdeclaration and illegal import of the impugned consignments and knowingly abetted the importers in filing of bills of entry with fabricated invoices. 1.29 M/s. Shiva Biochem, Rajkot were called upon to show cause to the Commissioner of Customs, Customs House, Tuticorin as to why : i. The declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of Bills of Entry listed in Annexures-IIIA; x. penalty should not be imposed on the applicant under Section 112 of the Customs Act, 1962 for suppressing the actual description, value and documents with intention to evade Customs duty and rendering the subject goods liable to confiscation, in respect of the Bills of Entry listed at Annexures IIIB and IIIC; xi. penalty should not be imposed on the applicant under [Section] 114AA of the Customs Act, 1962 for knowingly furnishing false documents in respect of Bills of Entry listed in Annexures IIIA, IIIB and IIIC; xii. the 4 provisionally assessed Bills of Entry listed in Annexure VI should not be finalized under Section 18 of the Customs Act, 1962, as per the above findings since the provisional assessment was not warranted for the reasons that the goods appeared to be Protein Meal Animal Feed Supplement and not Organic Manure-Composite Fertilizer as claimed by the applicant and accordingly compliance with the provisions of Fertilizer Control Order, 1985 was not required. 1.30 M/s. P.N. Enterprise, Morbi were called upon to show cause to the Commissioner of Customs, Customs House, Tuticorin as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty and interest thereon should not be imposed under Section 114A of the Customs Act, 1962 in respect of goods imported vide Bills of Entry specified in Annexure IIB/Annexure V. x. penalty should not be imposed on the applicant under Section 114AA of the Customs Act, 1962, in respect of goods imported vide the Bills of Entry specified in Annexure IIB. 1.31 Shri Hiren Bhagavanji Kalaria, Director of M/s. Shiva Biochem was called upon to show cause to the Commissioner of Customs, Tuticorin as to why penalty under Sections 112 and 114AA of the Customs Act, 1962 should not be imposed on him for his acts of commission and omission as detailed in the SCN. 1.32 Shri Vipul Lalji Bhai Bavarva, Director of M/s. Shiva Biochem was called upon to show cause to the Commissioner of Customs, Tuticorin as to why penalty under Sections 112 and 114AA of the Customs Act, 1962 should not be imposed on him for his acts of commission and omission as detailed in the SCN. 1.33 Shri Narendra Hirjibhai Adroja, Proprietor of M/s. P.N. Enterprise, Morbi was called upon to show cause to the Commissioner of Customs, Tuticorin as to why penalty under Sections 112 and 114AA of the Customs A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,21,05,476/- and also the interest liability of ₹ 4,54,620/- and the rest of amount of ₹ 1,49,25,540/- for refund. The applicant has further requested for immunity from prosecution, fine and penalty as proposed in the SCN. Averments of M/s. P.N. Enterprise, Morbi : 3.1 M/s. P.N. Enterprise in their application for settlement dated 3-4-2017 have averred that : The applicant was a proprietorship firm and was engaged in import of organic manure - composite fertilizer and animal feed supplement. The applicant accepts the description of goods as Animal Feed supplement/additive under classification CTH 2309 90 10. The goods viz. Protein Meal Animal Feed supplement classified under CTH 2309 90 10 was eligible for benefits of exemption as available at Sl. No. 106 of Notificaiton No. 12/2012-Customs, dated 17-3-2012, with applicable Customs duty of 20%. The applicant accepts the description of goods as Animal Feed supplement/additive under classification CTH 2309 90 10. Accordingly, the amount of differential duty has been worked out to ₹ 13,60,418/- as detailed in the Exhibit D to the application. They had already deposited an am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question of either accepting the duty liability or the manner in which it has been arrived at was also not applicable to them. He seeks immunity from penalty and prosecution from these cases. Admissibility of the applications of M/s. Shiva Biochem and M/s. P.N. Enterprise and their co-applciants : 5.1 Applications of M/s. Shiva Biochem, Rajkot and M/s. P. N. Enterprises, Morbi along with their co-applicants (i) Shri Hiren Bhagvanji Kalariya, Director of M/s. Shiva Biochem, Rajkot. (ii) Shri Vipul Laljibhai Bavarva, Director of M/s. Shiva Biochem, Rajkot, and Shri Narendra Hirjibhai Adroja, Proprietor of M/s. P.N. Enterprises were received on 3-4-2017 were numbered as S.A. Cus/20-24/2017-SC. Based on the reply received to the First Notice, the application was allowed to be proceeded with by the Bench vide letter dated 20-4-2017. Admissibility of the applications of Shri Ameet K. Dedhia, proprietor of M/s. Amit Cargo International, Tuticorin : (a) As co-applicant in M/s. Shiva biochem 5.2 The application received on 19-4-2017 and was numbered as S.A. Cus/30/2017-SC. Based on the reply received to the First Notice, the application was allowed to be proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e intention to evade Customs duty, and also knowingly furnished false documents to the Customs authorities. Re-exportation/destruction of the impugned goods imported vide BE No. 5420683/27-5-2016 and Bill of Entry No. 5490477/2-6-2016, the jurisdictional Commissioner submitted that if the applicant prefers for re-exportation of the subject goods on payment of redemption fine, then there is no objection from the department keeping in mind, for safety of the environment of the nation as the impugned goods were categorized as high risk commodity. With regard to confiscation of goods not available, for suppression of facts and furnishing of false documents to Customs with an intention to evade payment of appropriate duty and misdeclaration of goods to avoid obtaining of SIP and port restriction, the goods are liable for confiscation and imposition of penalty for the past import consignments under CA, 1962. In this regard, the case law quoted by the applicant with regard to imposition of redemption fine is not squarely applicable to this case. In as far as the amount mentioned in para (viii) of the SCN, the fact was verified and found that the amount paid during the investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz. M/s. P.N. Enterprise, Morbi and M/s. Shiva Biochem, Rajkot had devised a plan with an intention to evade payment of appropriate customs duty; As per the plan, he had floated several companies abroad with the assistance of his brothers-in-law for raising invoices wherein the goods were misdeclared; The product data sheet in the consignments furnished by the supplier CAGEMAX, Netherlands exposed the actual description of the import cargo which was also corroborated by Shri Hiren in his statement; Initially, Shri Hiren had imported their product i.e., Protein Meal Animal Feed Supplement with actual description rightly classifying under CTH 2309 90 10 attracting BCD @ 30% and continued for some period; Later he intentionally misdeclared the same goods as organic manure in the subsequent consignments classifying under CTH 3101 00 99 attracting BCD 5%, thereby evaded payment of appropriate duty for their consignments; Though he was not required to submit any Bill of Entry for itself personally as contented by him, Shri Hiren himself had admitted the fact that he had prepared the invoices as Organic Manure from M/s. JHK Pol Sp. Zoo with his assistance abroad; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Mention if there is any short payment or excess payment made by the applicant Excess amount paid : ₹ 85,41,747/- 8. Details of BG/Bond executed Nil 9. Whether the applicant is eligible for any refund on the subject issue, if so amount of refund? Total diff duty + interest payable : ₹ 1,50,24,092/ - Total amount paid - ₹ 2,35,65,839/- Excess amount paid - ₹ 85,41,747/- 6.7 The payment particulars in respect of M/s. P.N. Enterprise, Morbi, is furnished below 1. The amount of customs duty demanded, appropriation proposed, if any ₹ 16,29,100/- 2. The amount of customs duty admitted ₹ 16,29,100/- 3. The amount of customs duty paid ₹ 16,29,100/- 4. Amount of interest payable ₹ 2,02,654/- 5. Amount of interest paid N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer is neither an expert on this issue nor any authority to pass such remark/conclusion which has been relied upon by the department to deny a genuine benefit. To substantiate their claim, the applicant had submitted copies of about 10 Bills of Entry wherein the benefits of exemption have been granted by the Customs Department even though the term additive or premixes was not mentioned in the description of goods. The applicant has requested the Hon ble Bench to settle the case by extending benefit of Sl. No. 106 of the Notification No. 12/2012-Cus., dated 17-3-2012. Regarding the proposal for confiscation of the seized goods valued at ₹ 2,26,06,310/- the applicant requests that the goods may not be ordered for confiscation or a lenient view may be taken for imposition of fine. The applicant has applied for re-exportation of goods in July, 2016 and its about more than a year since the goods were imported. The sole criteria for re-export of goods is its quality before export and for that the applicant has repeatedly requested the department to permit it to take samples and get it tested whether there is any fungal infection in the product or not, but till d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the evidences unearthed during the investigation and admission of the applicant. The department s contention that the animal feed supplement is only a raw material for manufacture of poultry feed which was substantiated by the version of the manufacturer of poultry feed. However, the applicants nowhere denied the version of the manufacturer relied by the department. The applicants questioning the statement recorded by the Department under duress or pressure cannot be acceptable since it is voluntary statement given by him under Section 108 of the Customs Act, 1962. The department had taken up the investigation during June, 2016 and during the course of investigation, the Quarantine Officer (SR) stated that the consignments of Protein Meal Animal Feed Supplement imported vide Bill of Entry No. 5420683, dated 27-5-2016 and 5490477, dated 2-6-2016 imported by M/s. Shiva Biochem, Rajkot contained Meat and Bone Meal which came under the category of livestock products and categorized the same as high risk commodity and also requested the department to take immediate action regarding deportation/destruction at the cost of the applicant under intimation to them, since the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The applicants and co-applicants in the application stated that they had decided to approach the Settlement Commission and hence there was no requirement to file any reply or appear before the adjudicating authority. They had not informed the adjudicating authority within the stipulated time but they have neither replied to the SCN nor informed the adjudicating authority and filed the application before the Settlement Commission, Chennai after a period of six months without accepting the entire duty liability. Hence the reply given by them is not reasonable and cannot be considered. In every stage, the applicants hide the facts and not disclosing/accepting their mistake to Settlement Commission and disputing all the allegations placed by the department which appears that they have not approached the Settlement Commission for settlement of the case. Hence this is a fit case for sending back to the adjudicating authority for adjudication proceedings. Post hearing submissions dated 29-9-2017 of M/s. Shiva Biochem on the report of the jurisdictional Commissioner F. No. VIII/17/31/2017-Legal, dated 1-9-2017 : 8.1 The authorised representative of the applicant vide hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption Notification No. 12/2012-Cus., dated 17-3-2012 (Sl. No. 106). Accordingly basic customs duty has to be charged at 20% instead of 30% as proposed in the show cause notice. 9.3 With regard to the proposal for confiscation of the consignments imported in the past, he submitted that the same cannot be confiscated as the goods were not physically available for confiscation and hence the question of imposition of redemption fine also does not arise. 9.4 Regarding imposition of penalty the consultant submitted that no penalty could be imposed on Shri Hiren Kalaria as he was not in-charge of both the companies that M/s. P.N. Enterprises is a proprietorship concern and hence penalty cannot be imposed on both the proprietor and the firm simultaneously; that M/s. Shiva Biochem is a partnership concern and penalty cannot be imposed on the partners as well as on the firm. He prayed for leniency in the imposition of penalty as they have fully paid the customs duty involved along with interest thereof. He also prayed for immunity from prosecution; he also stated that as they have paid over and above the amount demanded in the show cause notice, remaining amount may be refunde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate that Feed Additives and supplements are used in place of each other. It is also submitted on the request of the applicant, permission for drawing samples was granted and from the test report of the sample, it may kindly be seen that it is having 48.51% Protein, Ash-35.19%, FFA of extracted oil-4.6%, Oil Content-8.58%, Phosphorus-5.95% and Calcium-12.18%, which sufficiently indicate that the goods are protein animal feed supplement/Additive. The quarantine officer had also opined that the imported goods may be deported/destructed immediately and the applicant had also requested for re-export of the goods on 21-7-2016, 25-7-2016 and 5-9-2016. The applicant had requested to take samples on 7-11-2016, the permission was granted only after about nine months on 16-8-2017. Again the officer concerned allowed taking of samples only on 11-9-2017. In the first report of department, it was confirmed by the Commissioner that there is an excess payment of ₹ 85,41,747/- and now in its second report it is mentioned by the department that there is an excess payment of ₹ 46,21,951/- only. In the calculation sheet attached with the second report department has not taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 18 of the Customs Act, 1962, since the provisional assessment is not warranted for the reason that the goods appears to be Protein Meal Animal Feed Supplement and not Organic Manure composite fertilizer as claimed by the importer and accordingly compliance with the provisions of Fertilizer Control Order, 1985 is not required. Whereas, the total differential duty for the 16 Bills of Entry works out to ₹ 2,35,65,839/- Land the importer has voluntarily paid all the duty liability. As pointed out by the applicant, the fact was verified and it is submitted that the amount paid during investigation towards differential duty has been inadvertently shown as Rs. 2,38,25,532/- instead of Rs. 2,35,65,839/- and the discrepancy was already informed in the report dated 6-6-2017. Further, there was no excess amount paid by the applicant as per the duty calculation done by the department on merits. If the impugned goods are ordered for re-export, the import consignment of M/s. Shiva Biochem, Rajkot under 2 live Bills of Entry will not attract duty and hence they are entitled for refund, after deduction of redemption fine, penalty imposed by the Hon ble Settlement Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 30.9% in respect of the 16 Bills of Entry inclusive of the provisional Bills of Entry works out to ₹ 2,35,65,839/- whereas the applicant has accepted the differential duty liability of ₹ 81,85,679/-calculated @ 20.6% (12 Bills of Entry). The import product Protein Meal Animal Feed Supplement is only a raw material which is substantiated with the evidences/discussions placed in the SCN and does not come under the category of Feed Additive or Premix and hence the importer is not eligible for the exemption benefits as claimed in their Settlement Commission application and it is an afterthought and cannot be considered. It is once again requested to uphold the rejection of the request for exemption claim under Sl. No. 106 of tariff Notification No. 12/2012-Cus., dated 17-3-2012 as amended for the impugned goods as recommended by the department and the differential duty ordered to be calculated/finalized @ 30.9% on merits. 10.2 The jurisdictional Commissioner has further given consolidated payment particulars : Sl. No. M/s. SHIVA BIOCHEM, RAJKOT 1. Total differential duty amount (@ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- ** The applicant has not paid any amount towards interest during the course of investigation and is yet to be paid. Findings of the Bench 11.1 The Bench has carefully gone through the records of the case, and taken note of the written submissions made on behalf of the main-applicant, co-applicants and the Revenue. Customs duty and interest : 11.2 This is a case where it has been alleged in the SCN that the applicants have misdeclared the imported goods Protein Feed Animal Supplement falling under Chapter Heading 2309 90 10 attracting Customs duty @ 30.9% as Organic Manure Composite Fertilizer under Chapter Heading 3101 00 99 attracting Customs duty @ 5% with an intention to evade payment of higher rate of Customs duty. 11.3 The investigation conducted revealed that initially Shri Hiren Bhavanji Kalariya, Director of M/s. Shiva Biochem, floated M/s. P.N. Enterprises with his brother-in-law Shri Narendra Hirjibhai Adroja, as Proprietor. He imported 8 consignments during the period October, 2014 to October, 2015, through Tuticorin Port, out of which in respect of 5 consignments, he had correctly declared the description of goods as Prote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with the provisions of Sections 111(d) and 111(m) of the Customs Act, 1962. 11.6 The Bench notes that the applicant and the co-applicant have paid the entire differential customs duty demanded during the course of investigation, even before the issue of SCN; however, they are before the Bench with a prayer to extent the benefit of Customs Exemption Notification No. 12/2012-Customs, dated 17-3-2012 (Sl. No. 106) which is applicable to Feed additives or premixes falling under CTH 2309 90 10 attracting basic Customs duty of 20%. The evidence gathered during the course of investigation have clearly proved that the invoice, packing list etc., have been fabricated with false description of the goods and the goods imported have been sold to poultry agencies directly as animal feed. The poultry agencies have not carried out any further manufacturing activity with the goods purchased and sold them directly in the market as a animal feed supplement . Further, when the goods imported vide B/E No. 5420683, dated 27-5-2016 and B/E No. 5490477, dated 2-6-2016 were referred to Animal Quarantine and Certification Service, Govt, of India, reported that the goods referred to them containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Agriculture and Farmers Welfare (Department of Animal Husbandry, Dairying and Fisheries), New Delhi discussed earlier. The Quarantine Officer in letter dated 22-7-2016 addressed to the DRI had noted that as the goods imported under the above live consignments come under the category of livestock products and is categorized as high risk commodity, action regarding deportation/destruction at the cost of the importer under intimation to their office. The Bench notes that it is prerequisite that in order to import Protein Meal Animal Feed Supplement the main-applicants should have obtained a valid Sanitary Import Permit prior to importation. It is also pertinent to note that Tuticorin port was not an authorized port for import of livestock products as per the Notification No. 2666(E), dated 16-10-2014 issued by Ministry of Agriculture and Farmers Welfare (Department of Animal Husbandry, Dairying and Fisheries), New Delhi. The main applicant while filing the application on 3-4-2017 and even during the hearing held on 5-10-2017 has also requested for re-export of the goods seized. 11.10 The jurisdictional Commissioner vide his report dated 6-6-2017 has stated that if the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also to be worked out by the applicant. M/s. P.N. Enterprises : 11.12 In the case of M/s. P.N. Enterprises, Morbi, the SCN demands an amount of ₹ 16,29,100/- as the differential Customs duty as listed in Annexure IIB/Annexure V to the SCN. Here also the applicant has admitted duty liability of ₹ 13,69,418/- claiming the exemption of Notification No. 12/2012-Cus., dated 17-3-2012. However since the applicability of Notification No. 12/2012-Cus., dated 17-3-2012 has already been discussed supra and the benefits denied, the Bench is inclined to settle the differential Customs duty at ₹ 16,29,100/-. The jurisdictional Commissioner has worked out the interest liability at ₹ 2,02,654/- and also reported that M/s. P.N. Enterprises has paid the differential Customs duty of ₹ 16,29,100/ - during the investigation itself. In view of the above, the Bench is inclined to settle the differential Customs duty at ₹ 16,29,100/- along with interest liability amounting to ₹ 2,02,654/-. M/s Shiva Biochem, Rajkot - Goods under Seizure : 11.13 The SCN proposes for confiscation of the goods imported vide two live Bills of Entry B/E 5420683/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as listed in Annexure IIB to the SCN) in respect of three Bills of Entry under Sections 111(d) 111(m) of the Customs Act, 1962. The Bench holds that the mis-declaration of description and other acts of commission/omission on part of the applicant as discussed in detail above, had rendered the goods liable for confiscation under the provisions invoked in the SCN. (d) There is a proposal in the impugned show cause notice for confiscation of imported goods with a total assessable value of ₹ 70,38,211/- (as listed in Annexure IIA to the SCN) in respect of 5 Bills of Entry under Sections 111(d) 111(m) of the Customs Act, 1962, read with Notification No. 2666(E), dated 16-10-2014 issued under the Livestock Importation Act, 1898 by Ministry of Agriculture and Farmers Welfare (Dept. of Animal Husbandry, Dairying and Fisheries), New Delhi and the Foreign Trade (Development and Regulation) Act. The Bench holds that the act of commission/omission on part of the applicant as discussed in detail above, had rendered the goods liable for confiscation. 11.16 However, as the goods had not been seized at any point of time in this case, the question of confiscation and imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier and hatched the entire conspiracy, suppressed actual description of goods to Customs by fabrication of invoices/substitution of fake invoices showing misdeclared description and ultimately evasion of duty. Hence penalty is imposable on both of them as invoked in the SCN. 11.19 Shri Ameet K. Dedhia, CHA in both the cases, (Co-applicant IV and V) was well aware of the offence committed by M/s. Shiva Biochem and M/s. P.N. Enterprises in the misdeclaration of import of illegal importation of consignments and knowingly abetted with them in filing Bills of Entry with fabricated invoices. Hence penalty is imposable on him under the provisions invoked in the SCN for his acts pertaining to M/s. Shiva Biochem and M/s. P.N. Enterprises separately. 11.20 Shri Narendra Hirjibhai Adroja, Proprietor of M/s. P.N. Enterprises - Co-applicant III - was also actively involved in the unlawful activity under the guidance of Shri Hiren Bhavanji Kalariya, misdeclared the description of the imported goods to delude Customs thereby evading appropriate customs duty. M/s. P.N. Enterprises and Shri Narendra Hirjibhai Adroja, Proprietor of M/s. P.N. Enterprises are liable for penal action as conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered for refund in accordance with law. ii. INTEREST : The interest liability worked out by the Revenue at ₹ 7,85,675/- (Rupees Seven lakhs Eighty-Five Thousand Six Hundred and Seventy-Five only). This interest liability is only for the duty of ₹ 1,42,38,418/- involved in 12 Bills of Entry (as listed to Annexure III to the SCN). This amount should be adjusted and appropriated from the excess amount paid by the applicant. The interest for the duty liability of ₹ 35,06,297/- to be worked out to the satisfaction of the jurisdictional Commissioner and adjusted and appropriated from the amount paid. iii. FINE : (a) Impugned goods imported vide 2 live Bills of Entry 5420683, dated 27-5-2016 and 5490477, dated 2-6-2016 with a total assessable value of ₹ 2,26,06,310/- is confiscated under Sections 111(d) 111(m) of the Customs Act, 1962. However, the goods are ordered to be released to the applicant upon payment of redemption fine of ₹ 5,00,000/- (Rupees Five Lakhs only) in lieu of confiscation, in terms of Section 125 of the Customs Act, 1962 only for the purposes of re-export. The jurisdictional Commissioner, on payment of the said fine, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the jurisdictional Commissioner. vii. Taking into account the facts and circumstances of the case, the Bench imposes a penalty of ₹ 1,00,000/- (Rupees One lakh only) on Shri Ameet K. Dedhia, Proprietor of M/s. Amit Cargo International, Tuticorin - the co-applicant V - under the provisions invoked in the show cause notice and grants immunity to the applicant in excess of the above amount. The penalty should be paid within 30 days from the date of receipt of this Order and compliance report payable to the jurisdictional Commissioner. viii. The interest and the penalties imposed on the firm shall be adjusted against the excess duty paid, the balance amount if any, may be refunded to M/s. Shiva Biochem as per law. ix. Upon payment of the fine and penalties pertaining to the main applicants and co-applicants as ordered above, the Bank Guarantee/Bond may be released to the applicant. x. PROSECUTION : Subject to payment of the penalty imposed as above within 30 days from the date of receipt of this Order, the main applicants and co-applicants are granted immunity from prosecution under the Customs Act, 1962. Order pertaining to M/s. P.N. Enterprises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner. v. Taking into account the facts and circumstances of the case, the Bench imposes a penalty of ₹ 10,000/- (Rupees Ten thousand only) on Shri Ameet K. Dedhia, Proprietor of M/s. Amit Cargo International, Tuticorin - the co-applicant VI - under the provisions invoked in the show cause notice and grants immunity to the applicant in excess of the above amount. The penalty should be paid within 30 days from the date of receipt of this Order and compliance reported to the jurisdictional Commissioner. vi. The Bench refrains from imposing any penalty on Shri Narendra Laljibhai Bavara, Proprietor, M/s. P.N. Enterprises, Morbi - co-applicant III - in view of the penalty imposed on M/s. P.N. Enterprises, Morbi, which is a proprietorship concern. vii. PROSECUTION : Subject to payment of the penalty imposed as above within 30 days from the date of receipt of this Order, the main-applicant and co-applicants are granted immunity from prosecution under the Customs Act, 1962. 14.1 The immunities are granted in terms of Section 127H of the Customs Act, 1962. The immunities granted above are liable to be withdrawn if, at any time, it comes to the notice of the B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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