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TMI Blog2024 (4) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellant appealed to the Commissioner (Appeals) who, by the impugned, orders upheld the finalization of the assessments. Hence, these appeals. 3. We have heard learned counsel for the appellant and the learned authorised representative for the Revenue and perused the records. Submissions on behalf of the appellant 4. Shri Devesh Tripathi, learned counsel for the appellant made the following submissions. 5. The details of the Bills of Entry in the these three appeals are as follows: Point of Comparison Appeal No. C/51855/2021 Appeal No. C/51856/2021 Appeal No. C/51857/2021 Bill of Entry details B/E No. 9670623 dated 16.01.2019 B/E No. 4437012 dated 09.08.2019 B/E No. 6471645 dated 14.01.2020 Issue/s involved Classification Classification Classification and valuation Re-assessment Yes No Yes Provisional assessment Yes No Yes Number of assessments 3 1 4 Date of first assessment 16.04.2019 26.11.2019 19.02.2020 Unit price change No No Yes (from 10.25$ to 12.5$) CTH claimed along with BCD and total rate of duty 2937 @ 7.5% BCD Total duty @27.735-Specifically 3824 @ 7.5% BCD Total duty @ 27.735-Generally 2937 @ 7.5% BCD Tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause the quantities of import were vastly different. 7. Elaborating on the alleged multiple assessments, learned counsel submitted that Section 17 provides for (a) self-assessment by the importer and (b) re-assessment by the proper officer. Once the Bill of Entry is re-assessed, there is no scope for the proper officer to again reopen it and make a third or fourth assessment as has been done in these cases. Further, once final assessment is made, there is no provision under which it can then be converted into a provisional assessment. Therefore, the assessment in these cases were themselves against the provisions of the law. Reliance is placed on Priya Blue Industries Ltd. vs CC (Prev) (2205) 10 SCC 433. Section 47 deals with clearing the goods for home consumption. Merely because the clearance for home consumption was not yet given under section 47, it does not mean that assessment was not completed under section 17. Once assessment is completed, it cannot be reopened. He also placed reliance on Escorts Ltd. vs UOI 1998 (97) ELT 211 (SC). Learned counsel also submitted that once the assessment is completed and duty has been paid, it is impermissible for the officer to then chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant that there were multiple assessments in the same case contrary to the provisions of section 17, learned authorised representative for the Revenue submits that assessment is a dynamic process and it will end once the customs officer clears the goods for home consumption under section 47. Until then, the assessment is open and the officer can revise it, if necessary. For instance, in a case where the importer self-assesses the duty, the officer first re-assesses the duty based on the declarations. However, if during examination, the goods are found to be at variance with the declaration, based on the examination report from the shed, the proper officer again re- assesses the duty. Once the proper officer clears the goods for home consumption, they cease to be imported goods and no duty can be charged on them. Until the order clearing the goods for home consumption is given under section 47, the assessment is open and can be changed as required. 14. On the second assertion of the appellant that no SCN was issued to the appellant, learned authorised representative for the Revenue submits that provisional assessment was made under section 18 and after receiving the test reports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTI 29379090 as claimed by the appellant or CTI 21069099 as classified in the impugned orders? e. Can the enhancement of value of Insane Lab Psychotic (Amino Acid Powder) 35 SU/220 grams be sustained? Assessments 19. According to the learned counsel for the appellant, once the importer self-assesses his Bill of Entry and the proper officer re-assesses it and the importer pays the duty, the assessment is complete. Thereafter, if the assessment has to be modified, the only course for the department is to either file an appeal before the Commissioner (Appeals) or issue an SCN under section 28. According to the learned counsel, the department has not only resorted to multiple assessments in the same Bills of Entry in these cases but has also, after initially making the final assessment, revised it to provisional assessment pending test report. He relies on Priya Blue in support of his assertion. 20. According to the learned authorised representative, there is no infirmity in the officer revising the re-assessments before the goods are cleared for home consumption under section 47. 21. To examine this issue, we must refer to the relevant provisions of the Act. Duties of customs ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h goods; (f) any other specific factor which affects the duty, tax, cess or any other sum payable on such goods, and includes provisional assessment, self-assessment, re-assessment and any assessment in which the duty assessed is nil; (25) "imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption; 22. Thus, once the goods are cleared for home consumption, they cease to be imported goods and therefore, there can be no further assessment of duty. The assessment already made, can, of course be modified in appeal or through a process under section 28, etc. This leads us to the next question as to who can assess the duty and how. This is laid down in section 17 which reads as follows: Section 17. Assessment of duty. - (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self-assess the duty, if any, leviable on such goods. (2) The proper officer may verify the entries made under section 46 or section 50 and the self-assessment of goods referred to in sub-section (1) and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are provisionally assessed to duty and the goods are cleared for home consumption and thereafter, the provisional assessment is finalized. In such a case, although the goods cease to be imported goods once they are cleared for home consumption, the assessment which was only provisional before such clearance has to be finalized. This finalization is not a new assessment but a completion of the assessment which was left incomplete before the goods were cleared. Section 18 of the Act reads as follows: "Section 18. Provisional assessment of duty. - (1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46 and section 50,- (a) where the importer or exporter is unable to make self- assessment under sub-section (1) of section 17 and makes a request in writing to the proper officer for assessment; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or (c) where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or (d) where necessary documents ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on such un-refunded amount at such rate fixed by the Central Government under section 27A till the date of refund of such amount. (5) The amount of duty refundable under sub-section (2) and the interest under sub-section (4), if any, shall, instead of being credited to the Fund, be paid to the importer or the exporter, as the case may be, if such amount is relatable to: (a) the duty and interest, if any, paid on such duty paid by the importer, or the exporter, as the case may be, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (b) the duty and interest, if any, paid on such duty on imports made by an individual for his personal use; (c) the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (d) the export duty as specified in section 26; (e) drawback of duty payable under sections 74 and 75. 24. Once the assessment is done under section 17 and duty is also paid, the proper officer issues an order under section 47 clearing the goods for home consumption. Even if only provisional as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order for reasons to be recorded, waive the whole or part of any interest payable under this section." 25. Once an order under section 47 is issued, the goods cease to be 'imported goods' as per section 2(25) and therefore, no assessment of duty is possible. Thus, it puts an end to the process of assessment under section 17. Thereafter, the assessment already made can be modified either on appeal to the Commissioner (Appeals) by either side or an appeal by higher appellate authorities or it can be reopened and revised by the department by issuing an SCN under section 28. While there appear to be no restrictions except the time limit on appeals to the Commissioner (Appeals), the SCN under section 28 is restricted by WHO, WHEN and WHY. Only 'the proper officer' can issue the SCN 'within the normal period or, as the case may be, the extended period of limitation' and 'to recover the duties not levied, short levied, not paid, short paid or erroneously refunded'. 26. The contention of the appellant in these appeals is that although section 17 provides for re-assessment, it can only be done once. If the re-assessment is done by the officer and the importer pays duty, the proper officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, many Bills of Entry are cleared without any re- assessment. The system clears the goods based on self- assessment by the importer. It happens on a daily basis that the importer realizes either after self-assessment or even after re-assessment by the officer and after duty has been paid that he was eligible for some exemption notification which would reduce his duty liability but which he had erroneously not claimed. In such cases, the importer or his customs broker gives a written request to the proper officer to recall the Bill of Entry from the system and re-assess it after applying the notification and if convinced of the grounds, the officer recalls it from the system and re-assesses the duty and the importer claims refund of the excess duty paid over the assessed amount. 31. However, once the proper officer issues an order under section 47 clearing the goods for home consumption, no changes in the assessment are possible. In fact, the Customs electronic data interchange [EDI] system is designed accordingly. Therefore, what is not permissible under the law with respect to assessment or re-assessment is not possible in the Customs EDI system. 32. If the appellant's content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umption. Principles of natural justice 36. Learned counsel for the appellant submitted that the principles of natural justice were violated because no SCN was issued to the appellant before finalizing the assessment. He, however, concedes that the appellant had made written submissions which were considered. 37. We find that as per the Customs Act, SCN has to be issued under section 28 (if a demand is being raised) or under section 124 (if the goods are to be confiscated or penalty is to be imposed). Regular assessment under section 17 or its finalization under section 18 have no provision for issue of SCN. However, if the duty is re-assessed under section 17(2) by the proper officer, unless the importer accepts such re- assessment in writing, he has to issue a speaking order within 15 days. Similarly, nothing in section 18 which deals with provisional assessment or its finalization provides for issue of an SCN. In these cases, initially, the Bills of Entry were provisionally assessed awaiting the test reports of CRCL on receiving which the assessments were finalized. The appellant was provided copies of the test reports and the appellant made written submissions which were cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OR REPRODUCED BY SYNTHESIS; DERIVATIVES AND STRUCTURAL ANALOGUES THEREOF, INCLUDING CHAIN MODIFIED POLYPEPTIDES, USED PRIMARILY AS HORMONES - Polypeptide hormones, protein hormones and glycoprotein hormones, their derivatives and structural analogues: 2937 11 00 -- Somatotropin, its derivatives and structural 2937 12 00 -- Insulin and its salts 2937 19 00 -- Other - Steroidal hormones, their analogues derivatives and structural 2937 21 00 -- Cortisone, hydrocortisone, prednisone (dehydrocortisone) and prednisolone (dehydrohydrocortisone) 2937 22 00 --Halogenated derivatives of corticosteroidal harmones 2937 23 00 -- Oestrogens and progestogens 2937 29 00 -- Other 2937 31 00 omitted 2937 50 00 -Prostaglandins, thromboxanes, leukotrienes, their derivatives and structural analogues 2937 90 - Other: --- Catecholamine hormones, their derivatives and structural analogues: 2937 90 11 ---- Epinephrine 2937 90 19 ---- Other 2937 90 20 --- Amino-acid derivatives 2937 90 90 --- Other 2106 FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED 2106 10 00 - Protein concentrates and textured protein substances 2106 90 - Other: & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTI 2937 90 90. The department does not agree with this contention because as per Chapter Note 1(a) to chapter 29, the headings of this chapter apply to only 'separate chemically defined organic compounds, whether or not containing impurities'. The test report of CRCL showed that the goods were not separate chemically defined compounds but were mixtures containing various amino acids, vitamins, caffeine, tea extract, etc. Learned counsel relies on Chapter note 1(c) to Chapter 29 according to which the products of headings 2936 to 2939 fall under those heads whether or not chemically defined. 44. The department also relies on Chapter note 5(b) to Chapter 21 which says that Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (a) protein concentrates and textured protein substances; (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; 45. It is the case of the department that since the imported goods are meant to be consumed either directly or dissolved in water, they are squarely covered by CTI 2106 90 20. Learned counsel for the appellant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvice and indiscriminate or unsupervised usage can have disastrous consequences. 49. The submission of the learned counsel for the appellant is that the imported goods should be considered as hormone- stimulating factors. Nothing on the labels suggests that they are hormone stimulating factors. Neither does the CRCL's test report say so. Hormones perform a delicate balancing act in maintaining the human body. Their secretion depends on the requirement often stimulated by the substrate or the condition of the body. For instance, if one consumes sweets, the blood sugar level rises and the pancreas secretes more insulin (a hormone) which brings down the sugar level. One perceives in a dangerous situation, a serious threat to one's life and limb, adrenaline levels surge in the body which stimulate the body and help it take quick, immediate action. Therefore, hormone levels do rise and fall with intake of foods, exercise, situations, etc. Merely for this reason, these food stuff do not become hormone-stimulating factors. 50. As is well known in biochemistry, hormone-stimulating factors and hormone inhibitors are certain types of chemicals whose function is to accelerate or reduce the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that 'Heading 2106 (except tariff items 21069020 and 21069030), inter alia, includes: (a) protein concentrates and textured protein substances; (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids) for human consumption; ......." 53. The imported goods are not protein concentrates (such as whey protein) but are mixtures of amino acids, vitamins, etc. for use by dissolving in water. In our considered view, Chapter Note 5(b) squarely puts the imported goods under heading 2106 and since they do not exactly fall under any of the other Customs Tariff Items, CTI 2106 90 99 is, in our considered view, the correct classification. 54. As far as the enhancement of the value of Insane Labs Psychotic (Amino acid powder) 35 SU/220 grams" in Customs Appeal No. 51857 of 2021 is concerned, we find that the assistant Commissioner, finding the value of US$ 10.25 per piece much lower, rejected it under rule 12 of the Customs Valuation Rules and enhanced it to US$ 12.50 per piece based on a previous import by the appellant itself, under Rule 4 of the Customs Valuation Rules. The Commissioner (Appeals), observing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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