COMMISSIONER OF CUSTOMS, KOCHI Vs. ADAM EXPORTS LTD.

JUDGEMENT

(1.) This batch of appeals arise from a common order of the Customs, ExciseService Tax Appellate Tribunal, South Zonal Bench. The issue is as to the correct duty entitlement of the respondents, all of whom are engaged in export of marine products. The duty entitlement was granted under Annexure H, wherein the description of the export product on Appendix 28A under Sl. Nos. 1, 2 and 3 of fish and fish products were amended as follows:

(2.) The exporters who export marine products for human consumption had classified the goods they export under Sl. No. 2 entitled to 5% duty entitlement. The Customs Authorities however, felt that the duty entitlement was @ 2% : the goods being covered under Sl. No. l. The contention of the Customs Department was that the exporters did not use any chemical preservatives and hence, there is no processing or preservation effected on the goods so exported by them.

(3.) The Tribunal found that the issue boils down to the correct interpretation of the term "preserved". It was held that, what was exported was admittedly marine products and that too for human consumption, which requires some amount of preservation. However, there was no mandate as to the method of preservation to be applied or for use of chemicals in preserving the exported goods. The Customs Department raise the issue of there being no preservatives or chemicals mentioned in the Standard Input-Output Norms (SION) having been employed. The Tribunal noticed that on the basis of such report initiated by the Customs Authorities the Directorate of Revenue Intelligence (DRI) initiated an investigation and the facts were placed before the Director General of Foreign Trade (DGFT). In fact, the duty entitlement is granted by the DGFT under the Export Import Policy (EXIM policy) framed by the Government as per the powers conferred under the Foreign Trade (Development and Regulation) Act, 1992. The DGFT exercises quasi judicial powers and report of enquiry of the DRI was placed before the DGFT. The DGFT specifically referred to one of the reports in the case of an exporter, who is the respondent in Customs Appeal No. 2 of 2007. According to the DGFT, the observations of which have been extracted in the order impugned, the classification as per the notification, as far as the marine products are only broad classification without specifics. The SION has made fixation of particular products after taking into account the aspects of utilization of the specified inputs at various stages, which go into production in consultation with the technical authorities. The SION was found to be published only to enable the exporter to obtain advance licences under the duty exemption scheme and the quantity of ingredients specified in the norms were only the maximum upper limit. This does not necessarily mean that only if such products as available in the SION are present in the exported goods, there could be duty entitlement granted. The DGFT had also clarified that the only aspect to be verified on considering grant of DEPB is a confirmation of whether the goods exported are as per the description given in DEPB schedule.