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TMI Blog2024 (3) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... n 23.1.2014 on execution of Bond for an amount of Rs.40,58,791/- and Bank Guarantee of Rs.20,29,396/- and also entire duty demand of Rs.8,52,833/- was paid. On further detailed investigations, Appellants were issued show-cause notice dated 5.5.2014 demanding differential duty on the mis-declared imported goods. On adjudication of the show-cause notice, the original adjudicating authority rejected the classification claimed by the appellant and demanded differential duty of Rs.4,30,14,978/- in terms of provisions of proviso to earlier Section 28(1) or Section 28(4) of the Customs Act, 1962 along with interest and penalty and imposed personal penalty on Shri S.A. Gopalakrishna, CEO and Director of the appellant-company under Section 112 & 114AA of the Customs Act, 1962 and also imposed redemption fine of Rs.1,50,00,000/- under Section 111(m) of the Customs Act, 1962. Aggrieved by this order, appellants are before us. 2. Shri B. V. Kumar, learned counsel for the appellant submits that the term 'weed' is a subjective one without any classification value. He further submits that imported goods are nothing but 'Weeder or Brush cutter' used to eradicate the weeds. He takes us through CTH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER WEEDER / SHOOT PRUNER" are printed and at the bottom of the cover page the instructions given are read as "Please read the following instructions before you use this brush cutter to ensure safe operation". It may also be seen from the printed images of the import items on the user manual, especially from the images at the page no. 5 & 8, that the import item is a hand-held device and also it can be seen that the cutting blades are designed exclusively for brush cutting and therefore it may be concluded from the user manual itself that the import goods are Brush Cutters - Model No. AMH 200 and are hand held machines used for brush cutting purpose. A brand name of AGRIMATE was given on the user manual. However, there are no other details on the user manual to prove that the said machines are used exclusively for agriculture purpose. 3.2 In Budget 2012, concessional duty of customs was provided, specifically to agriculture and agro-processing sectors, from 7.5% /5% to 2.5%, on - "Sugarcane planter, root or tuber crop harvesting machine and rotary tiller & weeder, parts & components for their manufacture", as per Para 24(iv) of letter D.O.F.No.334/ 3/2012-TRU New Delhi, dated the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ush Cutter is a hand-held device and from the information available on the internet, it is found that the said Brush Cutters are very light weight equipment, with weight of 7.7 Kgs and the weight of the main part i.e., engine Honda GX-35 is only 3.33 Kgs Therefore, the impugned equipment is a portable device. The said Brush Cutter also has a self-contained engine and therefore, the Adjudicating Authority has rightly classified the said 'Brush Cutters' under CTH 84678990. Whereas, the CTH 8432 refers exclusively to 'Agricultural, horticultural or forestry machinery, the CTH 8467 refers to the tools used in various industries. While Tillers / Power Weeders are exclusively used for Agricultural or horticultural work, the portable Brush Cutters are usable at various other work as mentioned at HSN Explanatory Note under CTH 8467 Sl. No. (18). Therefore, the impugned Brush Cutters are not exclusively usable for agricultural purpose. Hence, it is the benefit of concessional duty of customs provided exclusively to agricultural equipment 'Rotary Tiller / Weeder' (classifiable under CTH 8432) vide Entry No.399(A)(x) of Notification No.12/2012-Cus dated 17.03.2012 cannot be extended to 'Brush ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt Ltd Versus Commissioner of Customs, Bengaluru [2019(369) ELT 1132 (Tr. Bang.)]} held that the Appellant - M/s Ratnagiri Impex are not entitled for exemption under Notification No.21/2002-Cus. The Extended Period was also held to be invokable as and also the penalties imposed on the Appellant company and the Director was also upheld. The ratio of the said judgment is applicable to the instant case also. 3.7 The learned Authorised Representative also relied on the following case laws and the ratio of judgements therein, as applicable to the instant case: (i) Commissioner of Customs (Import), Mumbai Versus Dilip Kumar & Company [2018 (361) ELT 577(SC)] - wherein the Larger Bench of Hon'ble Apex Court has held that the burden to prove the entitlement for claiming exemption is on the assessee and that, it any ambiguity in exemption notification, benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in favour of the revenue. (ii) M/s. Bayer India Ltd Versus Commissioner of Central Excise, Mumbai [2001 (130) ELT 97 (Tri. Mumbai)] - At para 11, it was held that "where a notification grants exemption to a product specifically described in the Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the records. The issues involved in the present appeal for determination are: (i) Whether the goods are 'power weeders or brush cutters' (ii) Whether the goods are classifiable under CTH 8432/8433 as claimed by the importer or under CTH 8467 as claimed by the Revenue (iii) Whether the benefit of concessional rate of duty 2.5% advalorem in terms of Notification No.12/2012 dated 17.3.2012 is available. (iv) Whether the appellant mis-declared the description of the goods to evade payment of duty. 5. On verification by the department, the products were mentioned as 'Agrimate' and on the package, it was mentioned as "This cutting blade is designed exclusively for brush cutter. Do not use it for other applications". The user manual produced before us reads as "please read the following instructions before you use this brush cutter to ensure safe operation". The learned AR has also placed on record the document which mentions the item as 'Agrimate AMH 200-4S Brush Cutter', which is from the Ministry of Agricultural and Farmers Welfare and therefore which is similar to the product imported by the appellant which is a hand-held device which has a self-contained engine. The Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, 843221, 843229, 843230 and 843240 Kg 7.5% - 8432 90 90 ---Others Kg 7.5% - 8433 HARVESTING OR THRESHING MACHINERY, INCLUDING STRAW OR FODDER BALERS; GRASS OR HAY MOWERS; MACHINES FOR CLEANING, SORTING OR GRADING EGGS, FRUIT OR OTHER AGRICULTURAL PRODUCE, OTHER THAN MACHINERY OF HEADING 8437 - Mowers for lawns, parks or sports-grounds: 843311 -- Powered with the cutting device rotating in a horizontal plane: 84331110 --- Powered with 3 HP or more u 7.5% - 84331190 --- Other u 10% 843319 -- Other : 84331910 --- Non-powered mowers, having width of 75 cm or more u 7.5% - 84331990 --- Other u 10% - 84332000 - Other mowers, including cutter bars for tractor mounting u 7.5% - 84333000 - Other haymaking machinery u 7.5% - 84334000 - Straw or fodder balers, including pick-up balers u 7.5% - - Other harvesting machinery; threshing machinery : 84335100 -- Combine harvester-threshers u 7.5% - 84335200 -- Other threshing machinery u 7.5% - 84335300 -- Root ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and forestry work, viz.: ------ ------ The machines of the heading may be hauled by an animal or by a vehicle (e.g. a tractor), or may be mounted on a vehicle (e.g. on a tractor or horse-drawn chassis). (In this context "tractor" includes "pedestrian controlled tractor") (emphasis supplied) 8.2 ------- 8.3 As per Explanatory Notes, the goods covered under Chapter 8433 are described as follows: "The heading covers machines used in place of hand tools, for mechanical performance of the following operations: ----- ----- The provisions of Explanatory Heading 84.32 apply, mutatis mutandis, to this heading, e.g., in respect of tractors fitted with harvesting, threshing, mowing or other interchangeable attachments, and in respect of motor rakes. (emphasis supplied) The heading includes (1) Lawn Mowers, whether worked by hand or motor driven. They may have a cutter bar like agriculture mower, rotary blades which cut the grass against a fixed horizontal blade, or rotating disc with knives on outer edge. (2) Mowers (including Motor mowers) for cutting hay etc. They usually consist of a horizontal cutter bar and sections which cut by oscillating action of teeth between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tool holder, presented together with various interchangeable cutting tools for mounting in tool holder." 12. On a plain reading of the relevant Tariff Entry and said explanatory notes under CTH 8432/8433 and 8467, it is clear that the products mentioned under CTH 8432/8433 are referring to 'machineries'; 'hand tools' fall outside the scope of said entries; whereas hand tools explained in the explanatory note under CTH 8467 at sr. no 18 & 19 includes 'brush cutters', hence the product in dispute would fall under CTH 8467. The use of the product for Agricultural purpose cannot be the criterion for determination of the appropriate classification. It is held by the Hon'ble Supreme Court in the case of M/s O.K. Play (India) Ltd vs CCE - 2005 (180) ELT 300 (SC) that use of an article as 'Toys' by children would not place in classification under 'Toys'. It has been held in a series of cases that the explanations for classification of particular product mentioned in the HSN cannot be brushed aside in determining the correct classification of a product. The Hon'ble Apex Court in CC, Bombay Vs. Business Forms Ltd. - 2002-TIOL-277-SC-CUS-LB held as below: "These civil appeals arise on ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the question of classification is settled and hence, the impugned goods are classifiable under 8467 as brush cutters. 7. Now let's examine whether the benefit of notification is available to brush cutters. The relevant clause of the Notification 12/2012 reads as follows: 399. 84 or any other Chapter (A) The following goods, namely :- (i) Paddy transplanter; (ii) Laser land leveller; (iii) Reaper-cum-binder; (iv) Sugarcane harvester; (v) Straw or fodder balers; (vi) Cotton picker; (vii) Track used for manufacture of track type combine harvesters; (viii) Sugarcane planter; (ix) Root or tuber crop harvesting machines; (x) Rotary tiller/weeder 2.5% - - B) Parts and components required for manufacture of goods specified at (A) 2.5% - 5 8. As seen above the Notification No.12/2012 dated 17.3.2012 is available only for items listed therein and it allows only rotary tiller /weeder and not brush cutters. As seen at para 7 (supra) is very clear that the machinery mentioned in the above notification are all those machineries namely weeder, planters, transplanters, rotary tiller, root tuber harvesting machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sification of the impugned goods are classified as 'Brush Cutters' under Chapter Heading 8467; the benefit of the Notification is denied; confirmation of demand with interest for normal period and set aside demand and interest for extended period. 11. The redemption fine of Rs.1,50,00,000/- was imposed on the Bills of Entry cleared earlier on the goods valued at Rs.8.48 crores and the redemption fine imposed of Rs.8,00,000/- was imposed on the present Bill of Entry cleared on the goods valued at Rs.40,58,791/-. The issue that goods when not available are not liable for confiscation is a settled law as held by the Hon'ble High court in the case of Commissioner of Customs (Import), Mumbai Versus Finesse Creation INC. Customs Appeal No. 66 of 2009, 2009 (248) E.L.T. 122 (Bom.) decided on 25-8-2009 observed that : "5. In our opinion, the concept of redemption fine arises in the event the goods are available and are to be redeemed. If the goods are not available, there is no question of redemption of the goods. Under Section 125 a power is conferred on the Customs Authorities in case import of goods becoming prohibited on account of breach of the provisions of the Act, rules or notif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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