NITTA GELATIN INDIA LTD Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) As both these Customs Appeals arise from the same final order dtd. 12/3/2024 of the Customs, Excise & Service Tax Appellate Tribunal, Bangalore in Customs Appeal No.20559 of 2018, they are taken up together for consideration and disposed by this common judgment.

(2.) Customs Appeal No.2 of 2025 is preferred by the assessee whereas Customs Appeal No.5 of 2024 is preferred by the Revenue. The brief facts necessary for disposal of these appeals are as follows: The assessee M/s.Nitta Gelatin India Limited used to manufacture collagen peptide from Bovine Bone protein. Later, the assessee proposed to manufacture collagen peptides from fish protein. Accordingly, fish protein obtained by decalcification of fish scales were imported from countries like China and Japan. From around April, 2016 however, imports were also made of the same product from countries like Indonesia. It is significant to state that the imports in question were made under cover of advance authorizations that were obtained by the assessee from the Directorate General of Foreign Trade [DGFT] under the scheme of advance authorization introduced by the Government of India to encourage and promote exports from India. The advance authorization scheme enables duty free import of inputs/raw materials required for manufacture of export goods. The application for an advance authorization is to be made to the DGFT, and after verification of the details of export products, details of imported items required for the manufacture of export products, the manufacturing process and the details of indigenous items required for manufacture of export products, the DGFT issues the advanced authorization specifying the description of items permitted for imports, quantity thereof and description of goods required to be exported and quantity thereof.

(3.) It is the case of the assessee that the item referred to as 'decalcified fish scale for collagen' is a rich source of the particular protein that is required for the purposes of manufacture of collagen peptides which are then exported by the assessee. It would appear that while the initial imports effected by the assessee classified the input as 'fish protein' for the purposes of the advance authorization scheme, during an inspection of the goods imported vide Bill of Entry No.5034927 dtd. 25/4/2016, it was found that the imported products were tagged in polypropylene bags having the marks 'decalcified fish scale for collagen (fish protein)'. The Revenue, therefore, after investigation and testing of the goods, found that the declaration of the goods as 'fish protein' was incorrect as the goods were found to be processed/de-mineralized fish scale classifiable under Customs Tariff Heading 0511 9190. The Revenue also found on investigation that about 57 shipments valued at approximately Rs.27.00 Crores had been imported from suppliers located in various countries like Japan, China etc. over a period of nearly five years, and that the suppliers therein had described the imported goods as 'fish protein'.