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TMI Blog2023 (3) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of ethyl alcohol that is to be allowed clearance for industrial use in India and not with regards the goods imported and bonded for re-export. There is no allegation against the appellant that the disputed goods was imported for industrial use in India. Since such goods are not meant for any use in India, the same are not required to be allowed clearances in India. Hence the charges of mis-declaration of goods against the appellant by citing the non-compliance with IS 4117-1973 (2008) is completely misconceived and cannot be sustained. Confiscation of goods on the non-compliant of IS 4117 (2008) - HELD THAT:- As per the Board Circular No.2/2006 dated 10.01.2006 this requirement is applicable to goods meant for clearance into India and not to any such goods which are meant for re-export and use outside India, the goods which are admittedly meant for re-export. First of all, there is no violation of compliant of IS 4117 (2008) even if it is required in view of the goods being re-exported. There is no case of confiscation of goods under Section 111(m) of the Customs Act, 1962 accordingly, the penalty under Section 112 and 114 of the Customs Act, 1962 are not sustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods that were lying in the bonded warehouse. Denatured Ethyl Alcohol (Ethanol) is classifiable under the Chapter Heading 22072000 of the Customs Tariff and attracts duties leviable to that tariff heading for Ethyl Alcohol and other spirits, denatured, of any strength. As per revenue, import as well as re-export of the goods in para 2.46 of a Foreign Trade Policy, 2015-2020 read with Notification No. 6/2015-2020 dated 24.05.2019 and Trade Notice No. 27/2019-20 dated 29.07.2019 (restricting import thereof) and Notification No. 29/2015-2020 dated 28.08.2018 (restricting export thereof) restricted for import and export. After detail investigation, show cause notice was issued to the appellant. The Adjudicating Authority vide Order-in-Original dated 02.05.2021 ordered as under: (i) Reject the CTH 22072000 declared in the Bill of Entry and Shipping Bill and order to re-classify the same under CTH 22071000 (ii) Drop the proposal to confiscate the goods under Section 111(d) of the Customs Act. However confiscated the imported goods i.e 1900MTs. declared as Denatured Ethyl Alcohol under Section 111(m), gave an option to pay fine of Rs. 77,00,000/- in lieu of confiscation under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndered baseless. In any case goods have been denatured with Bitrex (a globally used denaturant) as duly confirmed by the Chemical Examiner of Customs Laboratory and hence, it is established that the goods were indeed denatured ethyl alcohol. With the requirement of denaturation with IS specified denaturant not applicable. There is no basis for alleging or holding mis-declaration and consequent confiscation of goods. Imposition of redemption fine and penalty is completely unjustified and hence impugned order is liable to be quashed and set aside. 3.1 He also submits that the requirement of denaturation is laid down in Circular No. 02/2006 dated 10.01.2006. The circular is issued with reference to Section 24 of Customs Act, 1962 read with Denaturing of Sprit Rules, 1972 issued by the Ministry of Finance. As per the said circular, it is the importer who is required to make a request for denaturation. Once such a request is made, Para 1 envisaging clearance of denatured ethyl alcohol, para 6 laying down the necessity of maintaining uniformity of denaturing agents and para 7 stipulating BIS standards IS 4117-1973 may be adhered to for denaturation of imported ethyl alcohol, will co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the warehousing bill of entry filed by appellant was assessed by the proper officer only after tallying the date appearing in the EDI system fed by the master/agent and the date appearing on the bill of lading present along with bill of entry filed by the appellant. Moreover, it is clearly mentioned on the bill of lading that the shipment of 1900 MT. was loaded on board the vessel as part of one original lot of 38,386.137 MT. as Galveston Tx, USA on 27.10.2020. The same is also corroborated by the authorized representative of appellant in his statement recorded by the officer in the course of inquiry. In the absence of any contra-evidence documentary or oral gathered from master or shipping agent or any other source pointing to incorrectness of above date, the allegation and finding that date of loading mentioned in the bill of lading is incorrect is devoid of any legal justification. 3.6 He also submits that reliance placed on Commercial Certificate of Quality No. LABORATORY JOB NO.DP 20-11252.004 dated 29.10.2020 where goods were mentioned as Undenatured Ethyl Alcohol is misplaced inasmuch as the said invoice was issued prior to denaturation at the Galveston anchorage. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l alcohol is classifiable under sub-heading 2207.20.Denatured ethyl alcohol attracts concessional rate of customs duty @ 10% basic under Notification No. 21/2002-Cus., dated 1-3-2002 (Sl. No. 50) as against 150% basic on un-denatured ethyl alcohol.Ethyl alcohol is imported in un-denatured form, whether for use as such (e.g. potable type) or for industrial use. In case of latter use, ethyl alcohol requires to be denatured before clearance. For denaturing, of ethyl alcohol, it is treated with certain chemical agents such as, wood naphtha, methanol, acetone, pyridine, aromatic hydrocarbons (benzene etc.) and coloring matter (HSN notes for Heading 2207 refer). 3. The Board has been apprised of divergence in practice regarding choice of denaturants at different ports. At some ports, Public Notices have been issued by Commissioner of Customs stating that the importers must use only the denaturants specified under BIS Standard (IS 4117-1973) in order to avail of benefit of concessional rate of duty under Notification No. 21/2002-Cus., dated 1-3-2002 (Sl. No. 50). On the other hand, some ports are allowing use of denaturants specified by the respective State Excise Department and many ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.3 We also find that para 5 of above circular makes it clear that the circular has been issued keeping in view HSN notes corresponding to heading 22.07. According to this, the sole requirement of HSN is denaturation of ethyl alcohol by mixing of spirits with substances to render them unfit for drinking. It is on records that the Chemical Examiner of Customs, Laboratory vide letter dated 02.03.2021 has also confirmed that goods imported by Appellant for re-export is mixed (denatured) with substance called Bitrex/Denatured Benzoate. Further there is no allegation against the Appellant that goods are fit for drinking. Hence, under the undisputed facts and circumstances where goods have been permitted to be deposited in bonded warehouse for re-export from the said warehouse and shipping bills have also been filed for export, allegation of mis-declaration of goods cannot be sustainable against the Appellant. Accordingly, we set aside the allegation of mis-declaration. 5.4 We also find that DGFT, New Delhi vide its clarification as discussed above clearly held that the provisions under Para 2.46(I)(a) of FTP, 2015-20 is not applicable in appellant s case. In such circumstance charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, in absence of contrary evidence, the allegation that the date of lading mentioned in the bill of lading is incorrect and not justified. 5.7 We also find force in the appellant s submission as reliance placed on Commercial Certificate of Quality No. LABORATORY JOB NO.DP 20-11252.004 dated 29.10.2020 when the goods were mentioned as Undenatured Ethyl Alcohol is misplaced in as much as the said invoice was issued prior to denaturation at the Galveston anchorage. After arrival into India, the Chemical Examiner of Custom House laboratory at Kandla has certified that goods have been denatured with Bitrex/Denatonium Benzoate. On this basis, the conclusion of the authorities below that the bill of lading is incorrect and false in respect of description of goods as well as imposing penalty on the appellant under Section 117 of the Customs Act, 1962. We find that firstly as per the discussion made herein above, on the facts of the case there is no mis-declaration on the part of the appellant therefore, only for inability to produce manufacturer s invoice that too due to supplier s unwillingness to share the same, by itself does not construe any offence that may attract pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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