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TMI Blog2023 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... content of the fruit and prevent it from draining out; sugar is added to maintain taste and palatability of the fruit and it is not a preservative; the Hot syrup (water+ sugar pre mixed) is heated till boiling point to kill any ambient bacteria that may be present and to create vacuum in the cans thus completing the preservation process due to the isolation from atmospheric contact and vacuum. Thereafter, such cans are cooled and released to market. In the instant case, the fresh pineapple slices are sterilized by passing under steam which is followed by adding boiling Hot Sugar syrup to balance the natural sugar content of the fruit and prevent it from draining out. This Hot syrup (water+ sugar pre mixed) is heated till boiling point to kill any ambient bacteria and to create vacuum in the cans thus completing the preservation process. Thereafter, such cans are merely cooled, and not frozen to enable them to be released for sale. Thus, it is very clear from the facts of this case, the canned pineapple slices are akin to fresh pineapples and are liable to be classified under CTH 0804, and not under CTH 0811, as claimed by the appellant. In the instant case, the classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Tariff Heading No. 0804 3000 and confirmed a duty demand of Rs. 50,95,196/- against the five (05) Bills of Entry cleared from ICD Tughlakabad during the period of 2020-21 along with a differential Customs Duty amounting to Rs.33,46,770/- with applicable interest and penalty of Rs.33,46,770/- on the appellant under Section 114A of the Customs Act, 1962. 2. The brief facts are that an intelligence was received that the appellant was importing Canned Pineapple Slices from Philippines Thailand and claiming exemption from Basic Customs Duty available to imports from ASEAN countries in terms of Customs Notification No. 46/2011-Cus dated 01.06.2011, as amended. However, it was alleged that the said 'Canned Pineapple Slices are classifiable under Customs Tariff Heading No. 0804 3000 and consequently the benefits of Exemption Notification No. 46/2011- Cus dated 01.06.2011, as amended, are not available. Thereafter, the premises of the appellant was searched on 17.03.2021, in the presence of independent witnesses and Mr. Harith Budhraja, Director of the appellant. The proceedings conducted were recorded in a Panchnama dated 17.03.2021. Sh. Harith Budhraja s statement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner made the Show cause notice answerable to the Principal Commissioner of Customs, ICD Tughlakabad rendering the notice bad in law as a junior officer had issued a Show cause notice which was made answerable to his senior officer. The learned Counsel further contended that the extended period of limitation had been wrongly invoked since it is settled law that claiming a particular classification under a particular heading does not amount to misdeclaration. He relied on the Hon'ble Supreme Court judgement in Northern Plastic Ltd. v. CCE 1998 (101) E.L.T. 549. 4. The learned Counsel further submitted that it is settled law that extended period and penalty cannot be imposed when the Adjudicating Authority himself held in April, 2019 that the goods were liable to be classified under CTH 20082000, whereas in March, 2021 he held that the same goods were classifiable in CTH 08043000. He also submitted that the Assistant/Deputy Commissioner of Customs, Group 1, ICD Tughlakabad had opined that the goods were liable to be classified under CTH 08119010, but from March 2021, he decided that it should be in CTH 08043000. The learned counsel submitted that this is evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that port. Similarly, the appellant had been exporting these goods regularly, classifying the same under CTH 08119010 viz S/B No 4797913 dated 23.09.2021 and S/B No 5052913 dated 04.10.2021. All export documents including Country of Origin Certificate indicate the CTH 08119010. He further submitted that it is settled law that assessments already made cannot be changed on the basis of change of mind of an authority based on different interpretation, when all the material facts were in the knowledge of the assessing officer/ proper officer. He relied on decision of CESTAT in PSL Limited vs. Commissioner of Customs, [2015 (328) E.L.T. 177] and affirmed by the Hon ble Supreme Court in Commissioner vs Man Industries India Ltd. [2016 (331) ELT A 90]. He contended that in PSL Limited decision, the Tribunal while considering the above cited judgment of the Hon'ble Supreme Court, had held that a declaration given with respect to classification of goods in the Bills of Entry cannot be considered as wilful mis-declaration/ suppression with intention to evade customs duty, in the absence of any other corroborative evidence. In the present case, there is no corroborative evidence brought on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckers [(1980(6) ELT 343(SC)] wherein it was had held that the canned pineapple slices cannot be treated as different from pineapple. He further stated that section 17 of the Customs Act casts an obligation upon the appellant to self-assess the duty payable on the goods imported by correctly classifying the same. In the instant case, the appellant had wrongly classified the goods under CTH 0811 by suppressing the fact that the goods were not frozen. This was duly admitted by the Director in his voluntary statement. Consequently, the impugned goods merit reclassification under CTH 08043000. He therefore submitted that the adjudicating authority had correctly confirmed the duty demand against the five Bills of Entry cleared during the period 2020 21, and had imposed penalty equal to the differential customs duty under the Section 114A of the Customs Act, 1962. 8. We have heard the Learned Counsel for the appellant and the Learned Authorised Representative. The issue before us is classification of canned pineapple slices. 9. We will first deal with the merits of the case, before we address other arguments of the learned counsel. Vide the show cause notice dated 15.3.22, the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not containing added sugar or other sweetening matter. 0811.10 - Strawberries 0811.20 - Raspberries, blackberries, mulberries, loganberries, black, white or red currants and gooseberries 0811.90 - Other This heading applies to frozen fruit and nuts which, when fresh or chilled, are classified in the preceding headings of this Chapter . (As regards the meanings of the expressions chilled and frozen see the General Explanatory Note to this Chapter j Fruit and nuts which have been cooked by steaming or boiling in water before freezing remain classified in this heading. Frozen fruit and nuts cooked by other methods before freezing are excluded (Chapter 20). Frozen fruit and nuts to which sugar or other sweetening matter has been added are also covered by this heading, the sugar having the effect of inhibiting oxidation and thus preventing the change of colour which would otherwise occur, generally on thawing out. The products of this heading may also contain added salt. 9.1 As per the explanatory notes, it is noted that for any product to be classified under CTH 0804, they have to be fresh or dried. For fruits to be classified under CTH 0811, the said prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Sales Tax Vs Pio Food Products [1980 (6) ELT 343(SC)] wherein the Court held as follows: 3. It appears that the pineapple purchased by the assessee is washed and then the inedible portion, the end crown, skin and inner core are removed, thereafter the fruit is sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilisation. Is the pineapple fruit consumed in the manufacture of pineapple slices? xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 6. In the present case, there is no essential difference between pineapple fruit and the canned pineapple slices. The dealer and the consumer regard both as pineapple. The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The additional sweetness in the canned pineapple arises from the sugar added as a preservative. On a total impression, it seems to us, the pineapple slices must be held to possess the same identity as the original pineapple fruit. 9.3 It is important to note that the process of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expressly acknowledged basis of the structure of Central Excise Tariff in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. The ISI Glossary of Terms has a different purpose and, therefore, the specific purpose of tariff classification for which the internationally accepted nomenclature in HSN has been adopted, for enacting the Central Excise Tariff Act, 1985, must be preferred, in case of any difference between the meaning of the expression given in the HSN and the meaning of that term given in the Glossary of Terms of the ISI. xx xx xx 18. We are of the view that the Tribunal as well as the High Court fell into the error of overlooking the fact that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and, therefore, any dispute relating to tariff classification must, as far as possible, be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself. The definition of a term in the ISI Glo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t commodity coding system, with the first six digits being the HSN code. 10. Classification under the Harmonised System is done by placing the goods under the most apt and fitting sub-heading. This is done by choosing the appropriate Chapter, Heading, and sub-heading respectively. To facilitate interpretation and classification, each of the 97 Chapters in the HSN contain corresponding Chapter Notes, General Notes, and Explanatory Notes applicable to the Headings and sub16 headings within that Chapter. In addition, there are six General Rules of Interpretation applicable to the Harmonised System as a whole. xx xx xx 12. We would, at this stage, take on record the well-settled principle that words in a taxing statute must be construed in consonance with their commonly accepted meaning in the trade and their popular meaning. When a word is not explicitly defined, or there is ambiguity as to its meaning, it must be interpreted for the purpose of classification in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with. This principle should commend to the authorities as it is a good fisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . - Bang.)]; ii. Commissioner of C. Ex., Mumbai-v vs. P P Containers Pvt. Ltd.[2001 (138) E.L.T. 600 (Tri. - Del.)]; iii. Aviation Star Express Vs Commissioner of Customs, Chennai [2015 (327) E.L.T. 422 (Tri. - Chennai) 11. The learned counsel has submitted that the Country of Origin Certificates issued by the Designated Committee of the Thailand Government have been questioned by the Revenue however there was no follow-up investigations carried out after the import, in order to deny the exemption benefit. Therefore, such unilateral rejection of the exemption benefits is not tenable. We are unable to accept the submission of the learned counsel. As noted supra, we find that the appellant in his statement has accepted that they have wrongly classified their product under CTH 0811 by suppressing the non-frozen character of the impugned goods, in order to avail the benefit of the Notification no 46/2011 Cus dated 01.06.2011. We note that the Supreme Court in their decision in the case of Naresh J. Sukhawani v. Union of India, 1996 (83) E.L.T. 258 (S.C.) held that the statement made before the customs officials is not a statement recorded under Section 161 of the Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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