2024-VIL-393-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs – Import of goods – Classification – Appellant imported goods declared as ‘fish protein’ and classified same under Customs Tariff Heading 3504 0099 – Revenue after testing the goods found that declaration of goods as ‘fish protein’ was incorrect, as impugned goods were found to be processed/de-mineralized fish scale classifiable under CTH 0511 9190 – Commissioner classified imported goods under CTH 0511 9190 and demanded differential duty and denied benefit of Notification No.96/2009 – Whether goods imported by Appellant are classifiable as demineralised fish scale under chapter heading 0511 or as fish protein under CTH 3504 of the Act – HELD – It is an admitted fact that Appellant manufactured peptide by using collagen protein contained in demineralized fish scale imported by Appellant – Just because imported item contains protein which has been extracted through various processes to manufacture peptide, it does not make imported product a ‘fish protein’ – Content of protein cannot establish product as a protein, instead it is only a source of protein – Classification is based on description at time of import and not on basis of its content as claimed by Appellant – Test reports and technical literature clearly established that product imported is demineralised fish scale – Goods imported by Appellant are appropriately classifiable under Chapter Heading 0511 9090 – Appeal partly allowed - Advance authorisation scheme – Denial of benefit – Whether Appellant has mis-declared description of product in order to claim benefit of advance authorization – HELD – Notification No.96/2009-Cus grants exemption to materials imported into India against Advance Authorization in terms of Para 4.1.3 of Foreign Trade Policy – There is no dispute that goods were initially tested and test report declared goods as fish protein – Based on this test report, goods were cleared under chapter heading 3504 as claimed by Appellant – At a later date, after physically examining the goods imported, samples were drawn and test reports with regard to samples clearly stated that they were nothing but fish scales with a high content of fish protein and therefore, goods are classifiable under chapter heading 0511 and not under 3504 as claimed by Appellant – Denial of benefit of advance authorisation scheme to earlier consignments based on current test reports is not sustainable – Benefit of advance authorisation is to be denied only prospectively for consignments where samples were drawn and thereafter – Demand is upheld for 6 bills of entry – Other 9 bills of entry which are provisionally assessed are to be reassessed by reclassifying same under Chapter Heading 0511.
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