Health and Happiness (H&H) Trading India Private Ltd Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai held that a decision on classification cannot be made merely because the goods are mentioned as ‘Food Supplement’ by the Food Safety and Standards Authority of India. Since ingredient of product clearly shows that they have oils of fish, the product is rightly classifiable under CTH 1504 20 20.
Facts- The appellant is engaged in the business of trading goods and commodities. They imported certain goods and classified the goods as “Miscellaneous edible preparations – Food preparations not elsewhere specified or included” as under CTH 21069099. After such self-assessment of the Bills of Entry and payment of duty, the appellant was advised that they had inadvertently classified the products under incorrect chapter heading and that the correct classification is under Chapter Heading 1504. Chapter Heading 15042020 specifies ‘Fish lipid oil’.
Due to wrong classification under CTH 21069099, the appellant had paid excess duty. The appellant upon realizing the error in classification, filed a refund application dated 1.7.2020 u/s. 27 of the Customs Act, 1962. The Assistant Commissioner of Customs, Refund Section rejected the refund application as premature.
Consequently, the appellant filed appeal u/s. 128 of the Customs Act, 1962 before the Commissioner (Appeals) seeking for amendment of the classification in the Bills of Entry and also for revision of the duty of Customs accordingly. Commissioner (Appeals) vide order impugned herein rejected the appeal on the ground that the appeal is filed beyond the period of limitation and also that the goods classified as “Food Supplement” under CTH 2106 is correct and are not to be classified as “Fish Oil” under CTH 1504. Being aggrieved, the present appeal is filed.
Conclusion- Held that the rejection of the appeal by the Commissioner (Appeals) holding that there is more than 90 days delay from the date of Bill of Entry in filing the appeal and therefore the appeal is hit by limitation is without considering the extension of limitation by the Hon’ble Supreme Court. We hold that the rejection of the appeal as time barred cannot sustain.
Held that the Commissioner (Appeals) has referred to the NOC issued by Food Safety and Standards Authority of India. A decision on classification cannot be made merely because the goods are mentioned by the said Authority as ‘Food Supplement’ in these documents.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The issue involved in all these appeals being the same, they were heard together and are disposed of by this common order.
2. Brief facts are that the appellant is engaged in the business of trading goods and commodities. As part of their business, they import certain goods from outside India for selling them in domestic market of India. The appellant classified the goods as “Miscellaneous edible preparations – Food preparations not elsewhere specified or included” as under CTH Consequently, the appellant paid customs duty @ 50% on the assessable value and Integrated Goods and Service Tax @ 18%.
3. After such self-assessment of the Bills of Entry and payment of duty, the appellant was advised that they had inadvertently classified the products under incorrect chapter heading and that the correct classification is under Chapter Heading 1504 which reads as “Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified”. The Chapter Heading 15042020 specifies ‘Fish lipid oil’.
4. According to appellant, due to the erroneous classification, the appellant had paid excess duty of Customs @ 50% of the assessable value instead of paying duty @ 30% of the assessable value which is the rate applicable to the goods falling under CTH 15042020. So also, the appellant had paid the excess Integrated Goods and Service Tax at 18% instead of 12% rate, which is the rate of IGST payable when the goods are classified under 1504. The appellant would get benefit of concessional duty of IGST as per Sl.No.22 under Chapter II of Notification No.1/2017-Integrated Tax (Rate).
5. The appellant upon realizing the error in classification, filed a refund application dated 1.7.2020 under Section 27 of the Customs Act, 1962, claiming refund of excess duty paid to the extent of 21,53,027/- in three Bills of Entry. The Assistant Commissioner of Customs, Refund Section vide order dated 13.08.2020 rejected the refund application as premature observing that prior to applying for refund, the appellant is required to get the Bills of Entry reassessed in view of the judgment of the Hon’ble Apex Court in the case of M/s.ITC Ltd. Vs CCE Kolkata in Civil Appeal No.293294 of 2009.
6. Consequently, the appellant filed appeal under Section 128 of the Customs Act, 1962 before the Commissioner (Appeals) seeking for amendment of the classification in the Bills of Entry and also for revision of the duty of Customs accordingly. After hearing, the Commissioner (Appeals) vide order impugned herein rejected the appeal on the ground that the appeal is filed beyond the period of limitation and also that the goods classified as “Food Supplement” under CTH 2106 is correct and are not to be classified as “Fish Oil” under CTH 1504. It was also observed that the appellant has not proved that the imported goods would meet the EXIM Policy conditions prescribed for import of goods classified under CTH 1504. Aggrieved by such order, the appellant is now before the Tribunal.
7. Ld. Counsel Ms. T. Shrayashree appeared and argued for the appellant. The details of the Bills of Entry and the differential duty paid in excess by the appellant is given as under :
