Jugal Kishore Shivlal Vs. Commissioner of Customs (imports) Nhava Sheva - Court Judgment

SooperKanoon Citationsooperkanoon.com/941928
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided OnJan-17-2012
Case Number APPEAL NOS: C/14 & 15/2011 [Arising out of Order-in-Appeal No: 287 & 288(Group I)/2010
Judge THE HONOURABLE MR. ASHOK JINDAL, MEMBER (JUDICIAL) & THE HONOURABLE MR. P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL)
AppellantJugal Kishore Shivlal
RespondentCommissioner of Customs (imports) Nhava Sheva
Advocates:For the Appellants : Shri Krishna Kumar, Advocate with Mr. Sunil Nawandhar, C.A. For the Respondent : Shri Sanjay Kalara, Appraiser (AR).
Excerpt:
ashok jindal: the appellant are in appeal against the impugned order confirming levy of cvd on ‘gum arabic waste’ imported by the appellant. as common issue is involved in both the appeals, therefore, both the appeals are taken up together and are being disposed of by a common order. 2. the facts of the case are that the appellant imported ‘gum arabic waste/rejects’ and filed bills of entry for the clearance of the same by classifying their product under chapter heading 1301 2000. the bills of entry were assessed and it was held that cvd is payable on the imported ‘gum arabic waste/rejects’. the said order was challenged by the appellant before the commissioner (appeals) who rejected their claim and confirmed the adjudication order. therefore, the appellant are in appeal before us. 3. shri krishan kumar, advocate/learned counsel appeared for the appellant before us and submitted that the first appellate authority has rejected their claim for non-levy of cvd on the imported ‘gum arabic waste/rejects’ on the ground that the appellant has not proved that the ‘gum arabic waste/rejects’ have been obtained whether by some process/manufacture or by nature and also rejected the claim following the decision of the hon’ble calcutta high court in the case of oriental tiles vs. uoi 2005 (180) elt 316 (cal.). he further submitted that the gum arabic is a natural gum and not liable for cvd as it is extracted from the tree itself by making hole on the tree and some part of the gum which drops on the soil, that becomes ‘gum arabic waste/rejects’ and this is the only product they have imported which does not have purity as natural gum arabic is having purity. therefore, the gum arabic waste/reject is only a natural gum and as per the board’s clarification dated 28/06/2007 cvd is not leviable on gum arabic in raw form. therefore, they are not liable to pay cvd on the imported goods. he further submitted that the case law relied upon by the commissioner (appeals) in the case of oriental tiles (supra) was reversed by the division bench of the hon’ble calcutta high court reported in 2007 (3) chn 799 = manu/wb/0566/2006 and without considering the reversal of the order of the hon’ble high court, passed the impugned order. therefore, the impugned order is liable to be set aside. 4. the contention of the learned counsel was strongly opposed by shri sanjay kalara, ar, on behalf of the revenue and submitted that the appellant has not claimed that the product is a natural gum at the time of filing of bill of entry and they had not been able to prove that the impugned goods are natural gum. therefore, the impugned order has to be upheld. he further contends that they did not produce the test report, the country of origin certificate in support of their claim. 5. heard both the sides and considered the arguments in detail. 6. after going through the contentions of both the sides, we find that in this case the bills of entry had been filed by describing the goods as ‘gum arabic waste/rejects’ and classifying the same under chapter heading 1301 2000. the same was assessed holding that the appellant are liable to pay cvd on them. while assessing and confirming the liability to payment of cvd, no sample has been drawn and the basis for arriving that cvd is payable was not communicated to the appellant as they have claimed classification under 1301 2000 which covers the goods ‘natural gum’ and while importing natural gum, as per clarification of cbec dated 28/06/2007 there is no cvd leviable on the imported ‘gum arabic’. we find force in the contention of the learned advocate, who has explained how the ‘gum arabic waste/rejects’ was obtained and he has explained that while obtaining natural gum, a hole has to be made in the tree and gum comes out and some of the gum falls on the soil and that gum, which fell on the soil is called as ‘gum arabic waste/rejects’. in the absence of any test report, we hold that the ‘gum arabic waste/rejects’ is only ‘gum arabic’ obtained by natural process. 7. in view of these observations and clarification of cbec dated 28/06/2007, we hold that cvd is not leviable on the impugned goods imported by the appellant. we, further find that the decision in the case of oriental tiles (supra) relied upon by the first appellate authority has been overruled by the division bench of the hon’ble high court of calcutta and the same cannot be relied upon. 8. in view of these observations, we set aside the impugned orders and allow the appeals filed by the appellant with consequential relief, if any.
Judgment:

Ashok Jindal:

The appellant are in appeal against the impugned order confirming levy of CVD on ‘Gum Arabic waste’ imported by the appellant. As common issue is involved in both the appeals, therefore, both the appeals are taken up together and are being disposed of by a common order.

2. The facts of the case are that the appellant imported ‘Gum Arabic Waste/Rejects’ and filed Bills of Entry for the clearance of the same by classifying their product under Chapter Heading 1301 2000. The Bills of Entry were assessed and it was held that CVD is payable on the imported ‘Gum Arabic Waste/Rejects’. The said order was challenged by the appellant before the Commissioner (Appeals) who rejected their claim and confirmed the adjudication order. Therefore, the appellant are in appeal before us.

3. Shri Krishan Kumar, advocate/learned counsel appeared for the appellant before us and submitted that the first appellate authority has rejected their claim for non-levy of CVD on the imported ‘Gum Arabic Waste/Rejects’ on the ground that the appellant has not proved that the ‘Gum Arabic Waste/Rejects’ have been obtained whether by some process/manufacture or by nature and also rejected the claim following the decision of the hon’ble Calcutta High Court in the case of Oriental Tiles vs. UOI 2005 (180) ELT 316 (Cal.). He further submitted that the gum arabic is a natural gum and not liable for CVD as it is extracted from the tree itself by making hole on the tree and some part of the gum which drops on the soil, that becomes ‘gum arabic waste/rejects’ and this is the only product they have imported which does not have purity as natural gum arabic is having purity. Therefore, the gum arabic waste/reject is only a natural gum and as per the Board’s clarification dated 28/06/2007 CVD is not leviable on gum arabic in raw form. Therefore, they are not liable to pay CVD on the imported goods. He further submitted that the case law relied upon by the Commissioner (Appeals) in the case of Oriental Tiles (supra) was reversed by the Division Bench of the hon’ble Calcutta High Court reported in 2007 (3) CHN 799 = MANU/WB/0566/2006 and without considering the reversal of the order of the hon’ble High Court, passed the impugned order. Therefore, the impugned order is liable to be set aside.

4. The contention of the learned counsel was strongly opposed by Shri Sanjay Kalara, AR, on behalf of the Revenue and submitted that the appellant has not claimed that the product is a natural gum at the time of filing of Bill of Entry and they had not been able to prove that the impugned goods are natural gum. Therefore, the impugned order has to be upheld. He further contends that they did not produce the test report, the country of origin certificate in support of their claim.

5. Heard both the sides and considered the arguments in detail.

6. After going through the contentions of both the sides, we find that in this case the Bills of Entry had been filed by describing the goods as ‘Gum Arabic Waste/Rejects’ and classifying the same under Chapter Heading 1301 2000. The same was assessed holding that the appellant are liable to pay CVD on them. While assessing and confirming the liability to payment of CVD, no sample has been drawn and the basis for arriving that CVD is payable was not communicated to the appellant as they have claimed classification under 1301 2000 which covers the goods ‘natural gum’ and while importing natural gum, as per clarification of CBEC dated 28/06/2007 there is no CVD leviable on the imported ‘Gum Arabic’. We find force in the contention of the learned advocate, who has explained how the ‘Gum Arabic Waste/Rejects’ was obtained and he has explained that while obtaining natural gum, a hole has to be made in the tree and gum comes out and some of the gum falls on the soil and that gum, which fell on the soil is called as ‘Gum Arabic Waste/Rejects’. In the absence of any test report, we hold that the ‘Gum Arabic Waste/Rejects’ is only ‘Gum Arabic’ obtained by natural process.

7. In view of these observations and clarification of CBEC dated 28/06/2007, we hold that CVD is not leviable on the impugned goods imported by the appellant. We, further find that the decision in the case of Oriental Tiles (supra) relied upon by the first Appellate Authority has been overruled by the Division Bench of the hon’ble High Court of Calcutta and the same cannot be relied upon.

8. In view of these observations, we set aside the impugned orders and allow the appeals filed by the appellant with consequential relief, if any.