Commissioner Of Customs vs M/S. P.R. Agro Nutri (P) Limited

P. Dinesha, Member (J)

These appeals are filed by the Revenue against Order-in-Appeal C.Cus. No. 856/2013 dated 25.06.2013, Order-in-Appeal C.Cus. No. 1276/2013 dated 16.09.2013 and common Order-in-Appeal C.Cus. Nos. 1145 & 1146/2013 dated 26.08.2013 passed by the Commissioner of Customs (Appeals), Chennai.

The details of the present appeals are tabularized as under: -

Sl. No.

Appeal No.

Order-inOriginal No. & Dt.

Impugned Order-in-Appeal No. & Dt.

1

C/42059/2013

Order-in-Original No. 15576/2011 dtd. 06.04.2011

Order-in-Appeal C.Cus. No. 856/2013 dated 25.06.2013

2

C/42515/2013

Order-in-Original No. 15576/2011 dtd. 06.04.2011

Order-in-Appeal C.Cus. No. 1276/2013 dated 16.09.2013

3

C/42418/2013

-

Order-in-Appeal

4

C/42419/2013

-

C.Cus. Nos. 1145 & 1146/2013 dated 26.08.2013

It is submitted by both the sides that a common issue is involved in all these appeals and hence, for convenience, all the appeals were taken up for common disposal.

4.1 Brief facts which are relevant are that the assessee-respondent had filed Bill-of-Entry for clearance of chelated micronutrient fertilizers viz. Dissolvine E-FE-13(FE-EDTA), Rexoline CXK(EDTA-MIX), Dissolvine F-ZN-15(ZN-EDTA) and Dissolvine E-CA-10(CA-EDTA), classifying the same under CTH 3105 9090, which attracted 5% Basic Customs Duty (BCD) and total exemption from Counter-vailing Duty (CVD) and Special Additional Duty (SAD) under Notification No. 4/2006-C.Ex. (Sl. No. 4).

4.2 Entertaining a doubt as to the correct classification, samples were drawn and sent by the Revenue for testing to the Regional Fertilizer Control Laboratory (RFCL), Chennai. Consequently, Show Cause Notice dated 23.05.2007 came to be issued, inter alia, proposing to reject the classification declared under CTH 3105 9090 and to re-classify the impugned goods under CTH 2922, demand differential duty, apart from penalty under Sections 112(a) and 114A of the Customs Act, 1962.

4.3 It appears from the record that the assessee-responded to the Show Cause Notice justifying its classification under CTH 3105. It also appears that it brought to the notice of the adjudicating authority about various previous orders of the Customs authorities, thereby requesting to drop the proposed proceedings.

4.4 The adjudicating authority, however, considering the plea of the assessee, vide Order-in-Original No. 15576/2011 dated 06.04.2011 proceeded to confirm the proposals as made in the Show Cause Notice, against which the assessee filed an appeal before the first appellate authority.

4.5 The first appellate authority, vide impugned Order-in-Appeal C.Cus. No. 856/2013 dated 25.06.2013, having considered the plea of the assessee as well as the judicial precedents, allowed the appeal thereby setting aside both the re-classification as well as the demand confirmed in the Order-in-Original, and it is against this order that Customs Appeal No. 42059 of 2013 has been filed by the Revenue before this forum.

Similar demands raised against the assessee vide other Orders-in-Original/Bills-of-Entry were also set aside by the first appellate authority vide various Orders-in-Appeal, as indicated in the Table at paragraph 2 above, and against the same, the Revenue has preferred the Customs Appeal Nos. 42515, 42418 and 42419 of 2013 before this forum.

6.1 Shri Harendra Singh Pal, Ld. Assistant Commissioner appearing for the Revenue, seriously contended that the original authority had properly arrived at the classification, which should not have been disturbed by the first appellate authority.

6.2 He also took us through various paragraphs of the Order-in-Original dated 06.04.2011, specifically those at running page nos. 26 and 27 of the appeal memorandum of the Department in Appeal No. C/42059/2013, highlighting the findings of the adjudicating authority.

6.3 He also relied on the order of the Ahmedabad Bench of the CESTAT in the case of M/s. Meghmani Organics Ltd. v. Commissioner of Central Excise, Ahmedabad-II [2020 (371) E.L.T. 318 (Tri. – Ahmd.)].

Per contra, Shri S. Murugappan, Ld. Advocate for the respondent, supported the findings of the first appellate authority.

After considering the rival contentions, we find that the only issue to be answered is: whether the impugned orders of the first appellate authority are sustainable?

9.1 We have gone through the documents placed on record and we have specifically gone through the Show Cause Notice dated 23.05.2007 wherein the Revenue proposed the re-classification of the imported micronutrient fertilizers under CTH 2922 [except for Appeal Nos. C/42418 and 42419/2013]. The assessee filed a prompt reply justifying its classification under CTH 3105, during which time the assessee was also heard. Thereafter, the Order-in-Original No. 15576/2011 dated 06.04.2011 came to be passed wherein the original authority chose to surprise the assessee by re-classifying the imported micronutrient fertilizers under CTH 2921 as ‘complex organic salt’, which was nobody’s case.

9.2 The same was never proposed to the assessee and hence, at the threshold itself, we are of the view that the re-classification is unjustified. The very re-classification under CTH 2921 itself impliedly suggests that the original authority was satisfied that the impugned goods were not classifiable under CTH 2922, as proposed in the Show Cause Notice.

Further, in the impugned orders, the first appellate authority has relied on an order of this Bench of the Tribunal in the case of M/s. CIBA India Ltd. v. Commissioner of Customs, Chennai [2009 (237) E.L.T. 207 (Tri. – Chennai)] and the above order is almost identical to the facts of the present case. In the order of the Ahmedabad Bench i.e., M/s. Meghmani Organics Ltd. (supra) relied upon by the Ld. Assistant Commissioner, the Ld. Bench has distinguished the order in M/s. CIBA India Ltd. (supra), but however, we find at the threshold that the re-classification attempted by the original authority deserves to be set aside since what was proposed in the Show Cause Notice was under a different CTH, but what was confirmed in the Order-in-Original is under a totally different CTH. This approach of the original authority is not proper and correct since, very clearly, the principles of natural justice have been violated. Hence, we do not get into the other aspects even though we find that the ratio of the order in M/s. CIBA India Ltd. (supra) is more or less identical.

Hence, on both the above counts, we are satisfied that the first appellate authority has correctly set aside the orders of the original authority impugned therein, which do not call for any interference by us.

In the result, the appeals are dismissed.