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TMI Blog2025 (2) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... / raw materials including Aluminium Foil 50 MIC +- 10% ("impugned goods"), on the condition that the appellant fulfilled the export obligation of exporting "Alu/ Alu Foil (PVC 60 MIC/ OPA 25 MIC/ALU 50 MIC) +-10%" (export product).Using the said AAs, the appellant imported the impugned goods vide 45 Bills of Entry under the Notification No. 18/2015.The appellant imported the goods by classifying them under CTH 7607 19 91 of Customs Tariff. However, the department alleged that the appellant had wrongly classified the impugned goods under CTH7607 19 91 in order to match with the CTH provided in the Advance Authorizations. The department alleged that the imported goods were classifiable under CTH 7607 11 90 and not under CTH 7607 19 91 as the imported goods were classifiable under CTH 7607 11 90they were not eligible for the benefit under the Advance Authorisations. Consequently, the benefit of Notification No. 18/2015-Cus had been correctly availed by the appellant. Accordingly, the differential duty was demanded from the appellant vide the Show Cause Notice dated 28.09.2020. The impugned order confirmed the differential customs duty of Rs. 21,43,27,904/- along with interest and pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Condor Footwear (I) Ltd. vs. Commissioner of Customs [2019 (367) E.L.T. 653 (T)] wherein this Tribunal had held that the appellants were holders of Advance Authorization and it was not disputed that the description in the SION norms covers the goods imported by the appellants. Further, the Tribunal specifically observed that the SION Norms do not prescribe any heading against the description of the goods. The Tribunal held that on a perusal of the exemption notification issued for availing exemption under Advance Authorization Scheme i.e. Notification No. 93/2004-Cus. (similar to Notification No. 18/2015) also, it is clear that there is no mention of sub-heading or heading against the goods permitted for import under the Advance Authorization. In view of these judgements, the ld. counsel submitted that benefit of the advance authorization scheme (Notification No. 18/2015-Cus) should not be denied to the appellant on account of proposed change in customs tariff classification of the imported impugned goods. 3.2. Ld. Counsel stated that the DGFT office is the nodal authority for granting the Advance Authorization to the exporters and issues the same based on either the SION, Adhoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EODC has already been issued by the DGFT office in respect of seven Advance Authorizations. Further, for the remaining one Advance Authorization, the appellant had completed the export obligation and was in the process of obtaining the EODC. In view of the above judicial precedents, once EODC has been issued to the appellant, no demand can be raised by the customs authority in this regard. Advance Authorization No. 0510412322 dated 01.11.2019 and the Advance Authorization No. 0510413806 dated 06.03.2020 had been specifically amended to conclude CTH 76071190 specify that the said Advance Authorization allowed duty free import of impugned goods, Therefore, he submitted that once the DGFT office had amended the said Advance Authorizations, it cannot be said that the appellant had misclassified the goods to claim duty benefit under Notification No. 18/2015-Cus.Additionally, he submitted that once the Advance Authorization has been amended, the same will have retrospective effect. Theld. Counsel relied on the following judgements:- * Bhilwara Spinners Limited vs. UOI [2011 (267) E.L.T. 49 (Bom.)] * Reliance Infrastructure Ltd. vs. Commissioner of Customs [2017 (357) E.L.T. 865 (T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uminium foil. HSN Explanatory notes given under 76 07 11 states that if annealing and sitting is done, it is still called 'not worked upon'. Ld. AR further submitted that after the issue has been pointed out by Audit, the appellant began mentioning the description of the imported goods as given in the supplier's invoices. He also contended that the appellant thereafter avoided attaching the copy of country of origin certificate as supporting document with the subsequent Bills of Entry. However, Bills of lading attached with those Bills of Entry mention the same description and CTH as 7607 11 instead of 7607 19. The specifications of imported goods, as mentioned in the invoice attached with the subsequent Bills of entry, also has reference to 8021 O Alloy Temper HSN 7607 1190 from China. 4.1. Ld. AR contended the impugned goods have gone through the process of slitting annealing & packing, that by carrying out the set processes, the impugned goods were sterilised for use in pharmaceutical packing and the adjudicating authority found that no process beyond annealing and slitting was being carried on the imported goods by them. 4.2 Ld. AR stated that the appellant was not eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to include the classification as per Customs Tariff 7. It has been contended by Revenue that the imported goods are not classifiable under CTH 7607119 as they were 'not worked upon' and the said goods had merely under gone annealing and shifting. Consequently, the impugned order has held that impugned goods were classifiable under CTH 76071190. Learned Counsel has submitted before us that this issue is no more res-integra as the court has held that customs tariff classification of imported materials is not relevant for allowing exemption from customs duty if the same are covered by the AAs issued to the assessee. 8. It is not disputed that the importer was issued Advance Authorizations for import of raw material viz. Aluminium Foil to Mic +/-10% for export of Alu/Alu Foil (PVC 60 MIC/OPA 25), the final goods have been exported by the appellant and the competent authority i.e. DGFT has also issued the EODCs in this regard. It has to be appreciated that the DGFT functioning under the aegis of the Ministry of Commerce and Industry is responsible for formulating and implementing the Foreign Trade Policy for promoting India's exports. The Advance Authorization Scheme is one such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. It is not the respondents' case that the components were not used. The only case is that the value which had been indicated in the application was very large whereas what was actually spent was a paltry amount. To be, noted that the licensing authority has taken no steps to cancel the licence. The licensing authority has not claimed that there was any misrepresentation. Once an advance licence was issued and not questioned by the licensing authority, the Customs Authorities cannot refuse exemption on an allegation that there was misrepresentation. If there was any misrepresentation, it was for the licensing authority to take steps in that behalf." Further, the authority and jurisdiction of customs authorities to delve into issues of classification was considered by Allahabad High Court in PTC Industries Limited vs. Union of India & Others [2009 AHC : 71256-DB] pertinently observed:- "16. The scheme of the Customs Act, 1962 and the Foreign Trade (Development and Regulation) Act, 1992, provide that whereas the officers on the check-post or port and the point of entry and exit, have powers to prevent or detect the illegal exports of goods, and also confiscate the goods atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by ld. SDR cannot improve the Revenue's case or plight. The Revenue's allegation was that the appellants had violated conditions (vii) and (viii) of Notification 30/97 and similar conditions of Notification 51/2000. But, in this regard, the DGFT's order has taken the wind out of the Revenue's sails. In the result, the charge of breach of conditions of the Customs Notifications does not survive." An identical view was held by this Tribunal in the case of Bharath Steel Corporation v. Commissioner of Customs, Chennai, and Ashok Enterprises v. Commissioner of Customs, Chennai, cited supra. A similar issue came up for consideration before this Tribunal in the case of Kukar Sons (Indo-French) Exports Ltd. v. Commissioner of Customs, Jaipur. In that case the Revenue alleged violation of conditions of Notification No. 204/92-Cus. by the appellants as they failed to realise the sale proceeds of exported goods. The DGFT, which is the competent authority in the matter of advance licences, had already redeemed the bank guarantee and legal undertaking furnished by the appellants after considering the fulfilment of export obligation by the assessee. This Tribunal held as follows : "Once a ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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