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TMI Blog2023 (8) TMI 1244X X X X Extracts X X X X X X X X Extracts X X X X ..... inconsistency. In ORTHO CLINICAL DIAGNOSTICS INDIA PVT LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI [ 2022 (9) TMI 1109 - CESTAT MUMBAI] , the Tribunal had examined the extent and scope of empowerment as well as prejudicial effect on exchequer insofar as levy under section 3(7) of Customs Tariff Act, 1975 is concerned and it was held that Instead of deliberating on the validity, and appropriateness, of a tariff item in the First Schedule to Customs Tariff Act, 1975 other than that claimed in the bills of entry after due notice to the importer, the adjudicating authority adopted a process of elimination of the enumeration of descriptions in the Schedules to the integrated tax rate notification, and ignoring the scheme of its presentation, with the erroneous assumption of jurisdiction to place goods within the ambit of the residuary entry in Schedule III of the integrated tax rate notification. Thus, essential onus devolving on customs authorities for re-classification has not been discharged in the impugned proceedings. Consequently, and respectfully following the order of the Tribunal in Ortho Clinical Diagnostics Pvt Ltd, the impugned order is set aside to allow the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure of excise duty on manufacture of most goods, the replication of this equalizing provision thus '(7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent, as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8) or sub-section (8A), as the case may be…' was incorporated in section 3 of Customs Tariff Act, 1975. 4. The appellant, upon import 232 consignments of 'pumps' of several types and 'pump filter' for 'washing machines' and 'dishwashers', claimed classification against tariff item 8413 9190 of First Schedule to Customs Tariff Act, 1975. For goods imported under heading 8413 in the First Schedule to Customs Tariff Act, 1975, three rates, at 5% (at sl no. 231 of Schedule I), 12% (at sl no. 192 of Schedule II) and 28% (at sl no. 117 of Schedule IV) existed as per notification no. 01/2017-Integrated Tax (Rate) dated 28th June 2017 which, with effect from 14th November 2017, was expanded to incorporate yet another rate of 18% (at sl no 317A of Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of section 12 of Customs Act, 1962 was for 'parts' which called for levy of integrated tax at 18%. There was, however, no proposal for reclassification of the impugned goods under the appropriate sub-heading in chapter 84 of First Schedule to Customs Tariff Act, 1975 thus demonstrating unacceptable inconsistency. 8. In Ortho Clinical Diagnostics India Pvt Ltd v. Commissioner of Customs (Import) [final order no. A /85710 2022 dated 12th August 2022 in appeal C/85868/2020] against order [order-in-original no. CC-VA/12/2020-2021 ADJ(I) ACC dated 2nd July 2020] of Commissioner of Customs-III (Import), ACC, Mumbai, the Tribunal had examined the extent and scope of empowerment as well as prejudicial effect on exchequer insofar as levy under section 3(7) of Customs Tariff Act, 1975 is concerned and it was held that '9. In resolving that dilemma, it would be appropriate to take stock of the nature of the levy, the source of the authority to collect and the extent to which the 'revenue neutral' paradigm shift of July 2017 has left its mark on the determinative contours of assessment under Customs Act, 1962. Before the transition to goods and services tax (GST), the basic customs dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way or the other. Under the new tax regime, subsuming both the levies for counter-balancing domestic duties and tax, manufacture and actual use are not relevant to the tax and, with supply as the 'taxable event', all importers, save that miniscule for personal use, are entitled to avail the credit of such duties for offsetting tax payable on supply further down the line. Excess tax is thus no burden in the ultimate analysis. Nonetheless, the lack of substantive detriment cannot justify approval of levy in excess of that authorized by law or by excess of jurisdictional competence. It is also to be borne in mind that this context makes it apparent that there is next to no revenue available to the exchequer from this levy and the parallel universe of record was intended to carry forward the erstwhile mechanism in the scheme of assessment without particular consequence. Having accommodated the levy by proviso in section 5 of the Integrated Goods and Services Tax (IGST) Act, 2017, any proposition that such collection is essential to the integrity of the scheme of the tax does not hold either. 11. Despite the incorporation in Customs Tariff Act, 1975 of the parallel world correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs Act, 1962 and treating the levy of duties under Customs Act, 1962 as the point at which the 'integrated tax' liability is fastened on imported goods. It is not collected as a duty of customs and the authority conferred by section 3(7) of Customs Tariff Act, 1975 requires charging at the rate as is leviable under section 5 of Integrated Goods and Services Tax (IGST) Act, 2017. The legislated bundle for implementation of the scheme of goods and services tax (GST) is founded on self-assessment by adopting the value envisaged in section 15 of Central Goods and Services Tax (CGST) Act, 2017 to which the rate as notified under the relevant statutes is applied by the assessee for discharge of liability that is reflected in the return which, in turn, is scrutinized by the 'central tax officer' for correctness. 12. The scheme of rule 3(7) of Customs Tariff Act, 1975, therefore, imposes 'integrated tax' on imported goods, at a rate as prescribed under the authority of section 5 of Integrated Goods and Services Tax (IGST) Act, 2017, on value as prescribed in section 3(8) therein which is the arithmetical addition of duties of customs to value for assessment of imported goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for re-classification is not beyond such appellate jurisdiction and we may subject the impugned order to that test. 14. We find that, for assessment to basic duties of customs, the declared heading has not been disputed in the notice. The adjudicating authority has subjected all goods in the impugned bills of entry to revision by adoption of the ultimate residuary description; the absence of specific and detailed discussion on each of the articles separately is a grave want in the impugned order. The impugned goods are 'ELISA kits', 'CLIA kits', 'diagnostic reagents on a backing', calibrators', 'controls' and others such as 'wash solutions', 'wash buffers', 'reference fluid', 'diluent packs', 'maintenance packs' and 'marker kits' with claim for coverage under serial no. 180 of Schedule I in the 'integrated tax' rate notification owing to specific enumeration in List 1 for the first two items and under serial no. 80 of Schedule II in the 'integrated tax' rate notification owing to description corresponding to it. It is seen that the columnar reference to First Schedule to Customs Tariff Act, 1975 is to 'Chapter 30 or any other chapter', insofar as the former is concerned, and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icals Ltd v. Commissioner of Central Excise, Chandigarh [2006 (197) ELT 324 (SC), has held that '29. This apart, classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue. On the one hand, from the trade and market enquiries made by the Department, from the report of the Chemical Examiner, CRCL and from HSN, it is' quite clear that the goods are classifiable as "Denatured Salt" falling under Chapter Heading No. 25.01. The Department has not shown that the subject product is not bought or sold or is not known or is dealt with in the market as Denatured Salt. Department's own Chemical Examiner after examining the chemical composition has not said that it is not denatured salt. On the other hand, after examining the chemical composition has opined that the subject matter is to be treated as Sodium Chloride.' and further in Hindu ..... 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