Nippon Sea Freight Systems Vs Commissioner of Customs (CESTAT Chennai)
The appeals arose from a common Order-in-Original concerning the classification of “Alkyl Ketene Dimer (AKD Wax)” imported by the importer between 18.10.2007 and 30.07.2012. The importer had classified the goods under CTH 29141990, whereas the Department, following a DRI investigation, alleged that the goods were correctly classifiable under CTH 34049090 as wax products and had intentionally been described as “paper finishing chemicals” to evade customs duty. Differential duty, confiscation, and penalties were consequently proposed. Separate penalties were also imposed on the Customs House Agent and its representative under Section 112(a) of the Customs Act.
The Tribunal noted that the imported product had consistently been declared as “Alkyl Ketene Dimer (AKD Wax)” in all import documents, and the Department had accepted classification under Chapter 29 over several years after assessment, examination, and, in some cases, testing of samples. Prior to self-assessment being introduced in April 2011, classification had been undertaken by Customs officers themselves. The Tribunal observed that this history weakened the allegation of deliberate suppression or intentional misdeclaration.
On the issue of classification, the Tribunal examined the CRCL test report relating to the live consignment and earlier laboratory findings. The reports described the product as possessing waxy characteristics. The adjudicating authority had also relied upon HSN explanatory notes concerning Heading 3404 covering artificial and prepared waxes. The records further indicated that AKD Wax was manufactured from fatty acids such as lauric acid and palmitic acid, existed commercially in solid wax-like form, and was used in paper sizing and finishing applications.
