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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 ..... and then re-assess the duty. Both the self-assessment and the re-assessment are assessments as per section 2(2). But there could be occasions when the assessment cannot be done at that stage because of some details or test report, etc. are required. In such cases, the goods 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. 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 sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne or tea extract and other similar substances. They are meant to be consumed as such or after mixing in water. They are not meant to be consumed in unlimited quantities and the recommended consumption is also indicated - Nothing in the test reports or in the labels indicates that they are either hormones or hormone-stimulating factors as is claimed by the learned counsel. 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 the correct classification. Can the enhancement of value of Insane Lab Psychotic (Amino Acid Powder) 35 SU/220 grams be sustained? - HELD 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 that the contemporaneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TH 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 Total duty @ 27.735-Specifically 2937 @ 7.5% BCD Total duty @27.735-Specifically CTH as per OIA along with BCD and total rate of duty 21069099 @ 40% BCD Total duty @ 69.92 21069099 @ 40% BCD Total duty @ 69.92 21069099 @ 40% BCD Total duty @ 69.92 Date of OIO 21.05.2019 26.11.2019 11.08.2020 Date of OIA 03.05.2021 05.05.2021 03.05.2021 Description of goods Insane Labz-Amino Acid Powder -Psychotic -Psychotic Gold -Insane Veinz -Insane Creatine Monohydrate -Iam God -Insane Cutz -Insane Amino -Samples Packets -Somoles- Transparent Black Shaker Cups -Samples- Lanyards -samples- Drawstring bags -samples- Psychotic Gold Shelf Talker -Amino Acid Liquid -Hydrobcaa -Whey Protein Powder-Ps ISO -L-Carbitine -L-Carnitine -Mr. Hyde Nitrox -Mr. Hyde Signature Series -Whey Protein Powder-Ps Whey -Samples Sachet- Whey Protein Powder -Samples Sachet- Amino Acid Powder -Samples Sachet- Protein Powder -Psychotic [Amino Acid powder] -Samples- Shakers Cups, Funnels, Lanyards -Amino Acid Powder-Dr. Jekyll Stim- Free -Amino Acid Powder-Mr. Hyde Ico ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange it to provisional assessment. 8. With respect to the assertion that no SCN was issued, learned counsel submits that no personal hearing was granted but written submissions were given by the appellant which were considered as personal hearing in the record of proceedings on 17.5.2019. 9. Regarding the classification, learned counsel submitted that the imported goods were correctly classifiable under CTI 29379090 and not under CTI 21069099. The test report of the CRCL says that the imported goods were other than separate chemically defined organic compounds and therefore, the department, relying on chapter note 1(a) to chapter 29, held that they do not fall under this chapter and rejected the appellant s classification under it. However, as per Chapter note 1(c) of the same chapter, goods whether or not chemically defined does not apply to goods falling under CTH 2936 to 2939 and the appellant s goods fall under CTH 2937. The finding in the impugned order that the other ingredients in the imported goods were not impurities but are deliberate mixtures is without any evidence and merely based on assumption. It was never enquired from the CRCL if these substances could help release ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RCL, assessments were finalized. There is no provision in the Act which requires an SCN to be issued before finalizing the assessment. SCNs are to be issued either under section 28 (to recover duty not levied, short levied, etc.) or under section 124 if goods are proposed to be confiscated or penalty is proposed to be imposed. The appellant s case is neither of the two. It is a simple case of finalization of the provisional assessment by the officer. As has been admitted by the learned counsel for the appellant, before finalizing the provisional assessment, the appellant had made written submissions which were considered. Thus, there is no violation of principles of natural justice in this case. 15. On the third assertion of the appellant with regard to the classification, learned authorised representative submits that on examination, it was found from the labels of the imported goods themselves that they were food supplements and were not separately defined chemical substances. This was confirmed by the test reports of CRCL. Accordingly, the goods were correctly classified under CTI 21069099 and the appellant s claim of classification under CTI 29389090 was rejected. 16. On the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods imported into or exported from India at the rates specified in the schedules to the Customs Tariff Act, 1975 [Tariff] . The duties are not levied on an any person but on the goods and therefore, the liability of paying the duty is on the importer or exporter and it moves with the ownership of the goods. If the goods are sold while in the Custom bonded warehouse after import but before they were cleared, it is the new owner who will have to pay the duty. Similarly, if the imported goods are absolutely confiscated, the ownership shifts to the Central Government and so will the liability to pay duty. If the confiscated goods are released on payment of redemption fine, the person redeeming them will become the owner and he has to pay the duty in addition to the redemption fine as per section 125(2). Thus, duty is chargeable on the imported goods or as the case may be, export goods. Once the goods are no longer imported goods no duty can be charged or assessed on them. Section 2(2) defines assessment, and section 2(25) defines imported goods . These read as follows: Section 2 Definitions- In this Act, unless the context otherwise requires, (2) assessment means determination of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds or such part thereof as may be necessary. Provided that the selection of cases for verification shall primarily be on the basis of risk evaluation through appropriate selection criteria. (3) For the purposes of verification under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. (4) Where it is found on verification, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. (5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re- assessment in writing, the proper officer shall pass a speaking order on the re-assessment, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it necessary to make further enquiry, the proper officer may direct that the duty leviable on such goods be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed or re- assessed as the case may be, and the duty provisionally assessed. (1A) Where, pursuant to the provisional assessment under sub-section (1), if any document or information is required by the proper officer for final assessment, the importer or exporter, as the case may be, shall submit such document or information within such time, and the proper officer shall finalise the provisional assessment within such time and in such manner, as may be prescribed. (2) When the duty leviable on such goods is assessed finally or reassessed by the proper officer in accordance with the provisions of this Act, then (a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed or re-assessed, as the case may be, and if the amount so paid falls short of, or is in excess of the duty finally assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods for home consumption. Section 47 reads as follows: Section 47. Clearance of goods for home consumption. (1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption: Provided that such order may also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria: Provided further that] the Central Government may, by notification in the Official Gazette, permit certain class of importers to make deferred payment of said duty or any charges in such manner as may be provided by rules. (2) The importer shall pay the import duty- (a) on the date of presentation of the bill of entry in the case of self assessment; or (b) within one day (excluding holidays) from the date on which the bill of entry is returned to him by the proper officer for payment of duty in the case of assessment, reassessment or provisional assessment; or (c) in the case of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the appellant that once the assessment is done finally under section 17 by the officer, it is no longer open for him to then pass another order of provisional assessment. 27. These contentions of the appellant are not correct and are not supported by the legal provisions. If these contentions are accepted, it will also result in chaos and undue difficulties to both the trade and the department. 28. Nothing in section 17 says that the officer can re-assess only once and not more than once. In olden days when trade was small, the norm was for the proper officer to first examine the goods, test, weigh and then assess the duty accordingly. This very neat system became impossible with efflux of time as volumes of trade grew. An alternative system was developed which is commonly called as second appraisement or second check where the duty is assessed first based on whatever is declared and then the goods are examined and cleared. Thus, the importer does not have to travel back and forth between the import shed where the goods are physically present and the assessing officer in the Custom House. Since in vast majority of the cases, the goods will be as declared, this al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or example: a) If after assessment and duty is paid, on examination the goods were found to be more or different, the officer will not be able to change his assessment; b) If the importer forgets to claim the benefit of a notification and realizes his mistake, he cannot ask the officer to recall the Bill of Entry and reassess the Bill of Entry; c) If after re-assessment by the officer based on documents, intelligence is received about mis- declarations, the officer will not be able to change even the assessment. 33. Thus, the submission of the appellant that a second re- assessment is not permissible after re-assessment by the officer under section 17 is not correct. It is also incorrect to say that once the re-assessment order is issued, another order of provisional assessment cannot be issued. The initial assessment is based on declarations. On examination, if some testing or enquiry is felt necessary, assessment cannot be finalized without them and provisional assessment will be necessary. Of course, it will be open to the importer to not execute the test bond or other bonds as required and wait for the test report and the final assessment and not clear the goods. However, to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessment. Whether the Deputy Commissioner, ICD, Piyala is the proper officer to finalise the assessment? 38. Learned counsel for the appellant submitted that as per the judgment of the Supreme Court in Canon India , the Deputy Commissioner, ICD, Piyala was not the proper officer to finalise the assessment. This submission is completely misplaced. Canon India was on the question as to whether an officer of DRI is the proper officer to issue a notice under section 28 and the Supreme Court held in negative. In this case, neither was a notice issued under section 28 nor is an officer of DRI involved. The provisional assessment order was issued by Assistant Commissioner, ICD, Piyala and it was finalized by the Deputy Commissioner, ICD, Piyala. A successor in office naturally completes the action by the predecessor. We, therefore, find no infirmity in the order of finalization of assessment being done by the successor officer. Classification of the imported goods 39. The names of the goods imported is indicated by the appellant in the table reproduced above. Labels of the products have also been photocopied and enclosed with the appeal. All these leave no manner of doubt that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified or included; lactose syrup; glucose syrup and malto dextrine syrup 2106 90 50 --- Compound beverages preparations for making non-alcoholic 2106 90 60 --- Food flavouring material 2106 90 70 --- Churna for pan 2106 90 80 --- Custard powder ---Other : 2106 90 91 ---- Diabetic foods 2106 90 92 ---- Sterilized or pasteurized millstone 2106 90 99 ---- Other 42. Learned counsel for the appellant relies on Chapter notes 1(c) and 8(a) to Chapter 29. Department relies on Chapter note 5(b) to Chapter 21 and Chapter note 1(a) to Chapter 29. These notes are reproduced below: Chapter 21 5. 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; Chapter 29 Notes 1. Except where the context otherwise requires, the headings of this Chapter apply only to: (a) separate chemically defined organic compounds, whether or not containing impurities; (b) mixtures of two or more isomers of the same organic compound (whether or not containing impurities), except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 90 and relies on the Chapter note 8(a) according to which the term hormones in CTH 2937 also includes hormone-stimulating factors. It is his submission that the imported goods act as hormone stimulating factors and hence should be classified under CTI2937 90 90. 47. It is evident both from the test reports of CRCL as well as copies of the labels of the imported goods enclosed with the appeal that they are mixtures of amino acids and also contain vitamins and caffeine or tea extract and other similar substances. They are meant to be consumed as such or after mixing in water. They are not meant to be consumed in unlimited quantities and the recommended consumption is also indicated. However, they are not medicines and there is no requirement of any prescription by a doctor to consume them. They give strength and delay fatigue to the consumers. Nothing in the test reports or in the labels indicates that they are either hormones or hormone-stimulating factors as is claimed by the learned counsel. 48. As is well known, hormones have a profound effect on human metabolism in very small quantities because they act by switching on and switching off certain biological processes. For inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es commonly known as T3 and T4. The thyroid, in turn, is stimulated by another hormone called thyroid stimulating hormone (TSH) which is produced by the pituitary gland. The production of TSH by the pituitary gland, is, in turn, regulated by the thyrotropin-releasing hormone (TRH) produced by the hypothalamus. This system of multiple switches helps the body maintain perfect balance and maintain checks and balances between the functions of different glands producing hormones. In this example, TRH and TSH are hormone stimulating factors. Similarly, there are factors which inhibit the hormones. These hormone stimulating factors and hormone inhibitors, which are not hormones themselves, but regulate the other hormones, are covered by section not 8 (a). Not every substance which may cause some hormones to release or reduce is covered, by Chapter Note 8(a) as hormone releasing substances. If one consumes glucose, for instance, the blood sugar level rises triggering the pancreas to release more insulin (a hormone) but this does not make glucose an insulin stimulating factor. It is only a substrate in response to which the production of insulin increases. 51. It is unnecessary for us to di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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