THIRD MEMBER ON REFERENCE : SHRI P.G. CHACKO, MEMBER (J) GOKUL ENTERPRISES Vs. COMMISSIONER OF CUSTOMS, JAMNAGAR

JUDGEMENT

(1.) THE appellants filed a bill of entry to clear 129.91 MTs of Mixed Fatty Acid on 6-11-2006. The classification claimed by the appellant for the items was 3823 19 00 of Customs Tariff Act. They also claimed the benefit of Sl. No. 139 of Notification No. 21/2002 -Cust dt. 1-3-2002, which prescribed basic customs duty of 15% and the value declared was US $ 210 per MT C&F at Nhava Sheva. After conducting chemical test and receiving the report of the Chemical Examiner, wherein it was indicated that the sample was having the characteristics of Palm Stearin other than Mixed Fatty Acid, the imported goods were seized on 9-1-2007 and investigation was started. After investigation and issue of show cause notice, Commissioner of Customs passed an order classifying the imported goods under CTH 1511 90 90 of Customs Tariff Act, confiscated the seized goods and allowed them to be redeemed on payment of redemption fine of Rs. 5 lakhs, demanded customs duty of Rs. 28,05,134/- and also imposed penalty on the importer as well as Shri Ramji Dass Agarwal, Proprietor of M/s. Gwalior Soap & Chemical. The importer and Shri R.D. Agarwal are in appeal against the order of the Commissioner.

(2.) HEARD both the sides. The main issue to be decided in this case is whether the goods imported by the appellant can be classified under CTH 3823 19 00 or it is classifiable under 1511 90 90. The Commissioner has come to the conclusion on the basis of following grounds :-

(3.) 1 Shri B.L. Narsimhan, ld. Advocate on behalf of the appellants argued that the imported item is correctly classifiable under 3823 11 in view of the fact that even as per the Chemical Examiners Report, the imported goods has the characteristics of RBD Palm Stearin with PFAD; being non -edible it cannot be classifiable under Chapter 15. Further he also submits that explanatory note 1(e) of Chapter 15 clearly excludes fatty acids from Chapter 15; he also relies upon the decision of the Tribunal in M/s. Gujarat Ambuja Exports Ltd. v. CCE, Ahmedabad reported in 2008 (222) E.L.T. 427 (Tri. Ahmd.) in support of his contention that the fatty acids imported by them is nothing but PFAD which is also industrial fatty acid; he also drew the attention of the Bench to explanatory notes under CTH 3823 of HSN and the relevant portions are reproduced below :-