2009(06)LCX0307

IN THE CESTAT, SOUTH ZONAL BENCH, BANGALORE

S/Shri T.K. Jayaraman, Member (T) and M.V. Ravindran, Member (J)

Unimers India Ltd.

Versus

Commissioner of Customs, Mangalore

Final Order Nos. 764-780/2009, dated 19-6-2009 in Appeal Nos. C/228, 190-191/2005 and 58-71/2006

Cases Quoted -

Atul Commodities v. Commissioner - 2009 (235) ELT 1385 (S.C.) - Relied on [Para 12]

Casio India Co. Ltd. v. Commissioner - 2000(06)LCX0234 Eq 2000 (121) ELT 0379 (Tribunal) - Relied on [Paras 3,13]

Cine Land v. Commissioner -1999(06)LCX0154 Eq 1999 (114) ELT 0653 (Tribunal) - Relied on [Paras 3,13]

Commissioner v. Cineland - 2002 (143) ELT A068 (S.C.) - Referred [Para 3]

Commissioner v. Sanghi Spinners (I) Ltd. - 2006(06)LCX0227 Eq 2007 (209) ELT 0043 (Tribunal) - Relied on [Paras 3,13]

Departmental Clarification Quoted-

CB.E. & C. Circular dated 22-2-2001 [Para 3]

D.G.F.T. Policy Circular dated 14-7-2004 [Paras 3,8]

Advocated By -

Ms. Sudha Koka, SDR, for the Appellant
Shri G. Shivadas, Advocate, for the Respondent.

[Order per : M.V. Ravindran, Member (J)]. -

All these appeals are directed against OIO No. 1/2005, dated 25-2-2005. Since there are 17 appeals we would like to identify the appeals in a chart form which is as under :-

It can be seen from the above chart, the assessee as well as the Revenue are in appeal against the said OIO. Since all these appeals are arising against the very same OIO, they are being disposed of by a common order.


2. The relevant facts that arise for consideration are :

The Officers of Directorate of Revenue Intelligence received intelligence to the effect that M/s. Pure Chemicals Co., Mangalore (hereinafter referred to also as PC) have evaded Customs duty by mis-declaring and wrongly classifying six consignments of imported 'Exxsol Hexane RD' (hereafter also referred to as ERR) to pay lower rate of Customs duty. Intelligence further revealed that M/s. Pure Chemicals Co., Mangalore have suppressed the fact that the goods imported by them are actually 'Special Boiling Point Spirit' classifiable under Chapter 27 of the Customs Tariff, import of which is canalized as per Export Import Policy, 2002-07 and that they intentionally classified the product 'Exxsol Hexane RD' under Chapter 29 of the Customs Tariff in order to evade Customs duty. Therefore, the Directorate of Revenue Intelligence, Mangalore took up investigation into the imports of Exxsol Hexane RD made through New Mangalore Port.


3. Enquiries revealed that M/s. Pure Chemicals Co., is a proprietary concern having their Registered Office at 551, 3rd Main, 2nd Stage, West of Chord Road, Mahalakshmipuram, Bangalore-560 086 and Branch Office at Shop No. 3, Ground Floor, ABCO Trade Centre, Kottara Chowki, Mangalore-575006 and they are engaged in the import and trading of various chemicals and solvents. Mr. M. Ponnusami is the proprietor of M/s. Pure Chemicals Co., and his office is situated at No. 32, 'H' Block, 15 Main Road, Anna Nagar, Chennai-40. The Import-Export Code No. of M/s. Pure Chemicals Co. is 0495015890.


4. During the course of enquiry, M/s. Pure Chemicals Co., Mangalore vide letter dated 5-1-2004 furnished the following documents/records/files related to the imports of "Exxsol Hexane RD"

(a). Copies of Bills of Entry, High Sea Sales Agreements, Bond-to-Bond Transfer Agreements, Bills of Lading, Commercial Invoices, Debit Notes etc. pertaining to imports per vessel MT CHEMSTAR EAGLE, MT JIPRO DREAM, MT SHINTOKU, MT BOTANY TRITON, MT BUNGA ME-LAWIS SATU;

(b). Sales Specifications, Material Safety Data Sheet and Certificate of Quality of the product 'Exxsol Hexane RD'.


5. Scrutiny of these documents revealed that M/s. Pvire Chemicals Co., Mangalore imported six consignments of Exxsol Hexane RD through New Man-galore Port during the period May 2002 to December 2003. All the six consignments were supplied by M/s. Exxon Mobil Chemical Asia Pacific, 1 Harbor Front Place, #06-00 Harbor Front Tower One, Singapore-098633 having their registered office in India at Kalpataru Point, Plot No. 107, Road No. 8. SION (East), Mum-bai-400022 (hereinafter referred to as the 'Supplier' or 'Exxon Mobil'). Out of the total quantity of 2739.451 MT of Exxsol Hexane RD imported, M/s. Pure Chemicals Co., Mangalore have- sold 1358.235 MT to several High Sea buyers under various High Sea Sales Agreements. In certain cases, after bonding the cargo under Section 59 of the Customs Act, 1962, bond-to-bond transfers totaling 212.00 MT have been effected to various buyers. They cleared the remaining quantity of 1169.216 MT on payment of duty, classifying them under different headings of the Customs Tariff. The Bills of Entry filed in respect of four consignments imported under IGMs No. 1273/09-05-2003, 0777/23-05-2002,1355/07-07-2003 and 1574/18-12-2003 have been assessed to duty provisionally and the four Provisional Duty Bonds executed in this regard are pending finalisation.


6. Based on the Sales Specification of the product 'Exxsol Hexane RD' obtained from M/s. Pure Chemicals Co., Mangalore, DRI made a reference vide letter No. DRI/MRU/PC/52/2003/905, dated 31-12-2003 to the Indian Institute of Petroleum, Dehra Dun. The Institute furnished the reply vide letter dated 2-1-04 and it reads as follows :



DR S.N. SHARMA
Head
Research Planning & Monitoring

2nd January, 2004

Dear Shri Bhat

This has reference of your letter DRI/MRU/PS/52/2003/905, dated 31-12-2003 regarding some queries raised by you on "Characteristics and properties of Hexane". Our comments are as follows.

(a) Whether the product "Exxsol Hexane RD" can be considered as "Special Boiling Point Spirit"

Yes

(b) If so, of the three categories specified below, what is the best under which it can be categorized?

(i) Special Boiling Point Spirit with nominal boiling point range 55-115° C or

(ii) Special boiling Point Spirits with nominal boiling point range 63-70° C or

(iii) other Special Boiling Point Spirits.

According to the attached specifications of "Exxol Hexane", it comes under the category (ii) i.e. Special boiling Point Spirit with nominal boiling point range 63-70° C.

(c) Whether "Hexane" is manufactured by fractional distillation of crude oil/petroleum?

"Hexane fraction" is manufactured by fractional distillation of naphtha fraction, which in turn is obtained by fractional distillation of crude oil, but the straight run fractions as such do not meet revised BIS specifications (IS : 3470). For meeting these specifications subsequent treatment like solvent extraction or hydrogenation is required.

(d) Is there any process other than fractional distillation of petroleum/crude oil by which "Hexane" can be manufactured?

"Hexane fraction" can also be manufactured from Natural Gas Condensate. However, this will also need the processing steps as mentioned above.

(e) What is percentage of "Hexane" in these types of products? Whether it is pure hexane?

Hexane fraction (63-70°C cut) is not pure hexane. However, this cut typically contains n-Hexane about 50-55%. The rest of the components are isomers of hexane, small quantities of C5-C. saturates and benzene.

(f) Is there any difference between "Hexana" and n-Hexane?

Here "Hexane" means the "Hexane fraction". While n-Hexane is a pure component. As mentioned above 'n-Hexane' is predominant component in the "Hexane fraction".

The above information provided by us is based on our knowledge/literature and can not be deemed to be a certificate from IIP. Kindly note that providing of this information should not involve IIP to witness any legal proceedings.

With regards, Yours sincerely,

(a). The product 'Exxsol Hexane RD' can be considered as a 'Special Boiling Point Spirit'.

(b). According to the attached specifications of 'Exxsol Hexane RD', it comes under the category 'Special Boiling Point Spirit' with nominal boiling point range of 63-70°C.

(c). 'Hexane fraction' is manufactured by fractional distillation of naphtha fraction, which in turn is obtained by fractional distillation of crude oil, but the straight run fractions as such do not meet revised BIS specifications (IS:3470). For meeting these specifications subsequent treatment like solvent extraction or hydrogenation is required

(d). 'Hexane fraction' can also be manufactured from Natural Gas condensate. However, this will also need the processing steps as mentioned above.

(e). 'Hexane fraction'". (63-70°C) is not pure Hexane. However, this cut typically contains n-Hexane, about 50-55%. The rest of the components are isomers of Hexane, small quantities of C5-C7 saturates and benzene.

(f). Here 'Hexane' means the 'hexane fraction'. N-Hexane is a pure component. As mentioned above, 'n-Hexane' is the predominant component in the 'hexane fraction.'

After obtaining the test reports, the authorities came to the conclusion that the product which was imported as 'Exxsol Hexane RD' is not a separate chemically defined organic compound by it's known structure but a mixture of 9 separately chemically defined compounds. Based on such conclusion show cause notices were issued to all the assessees proposing amongst other things reclassification of 'Exxsol Hexane RD' under Customs sub-heading No. 2710 11 12 of the Customs Tariff Act, 1975 (CETA 1975) and for the demand of the differential duty. The assessee filed detailed replies to the said show cause notice and objected to the show cause notice for classification of the product under Chapter 27 instead of Chapter 29. The main contention of the assessee before the adjudicating authority was that the product imported by them was used by them as a solvent in vegetable oil extraction and in bulk drugs, polymers and plastics. It was also submission before the adjudicating authority that the said product is not used by them as light oil or a preparation or a motor spirit. The learned adjudicating authority after considering the submissions made by the assessees before him came to the conclusion that imported product would merit classification under Chapter 27101112 and finalized the provisional assessments and differential duty was demanded against the assessee and few proceedings were dropped.

¹3. As regards the demand of differential duty of CVD on the other assessees, learned counsel appearing on behalf of the appellant assessees in these cases submits that-

(1) The main issue in this case for consideration is a whether the goods imported by the appellants were required to be imported with the licence or through a cannalising agency. It is his submission that if the product imported by them i.e. 'Exssol Hexane RD' is to be considered as a product falling under Chapter 27 of CETA then the said product would require licence. It is his submission that the list of items to be imported through cannalising agency is given at page 147 of the Appeal Memo. It is his submission that the said list does not include 'Exxsol Hexane RD' as one of the items. He draws our attention to the products mentioned in such items in para 3 of the Exim policy as it stood on 31-3-95. It is also his submission that the items mentioned therein are mentioned by name, which would include "aviation turbine fuel, crude oil motor spirit, bitumen furnace oil, high speed diesels and the channeling agency indicated therein is IOCL. It is his submission that the product which was imported by them was not to be used as any of the items as indicated in the said Part 3 but was being used by the pharmaceutical companies and vegetable extraction units as a solvent. He would submit that the intention of the Government was always to cannalise only motor spirits used as fuel and not an industrial raw material like 'Exxsol Hexane RD' though the said product may have special boiling point as specified under Chapter 27. It is also his submission that the imported item is admittedly used by the various industries like pharmaceutical industries solvent extraction unit as a solvent and not as an aviation fuel or motor spirit.

(2) It is his submission that the industry took up the matter with the DGFT. DGFT vide their Policy Circular dated 14-7-04 clarified that the product 'exxsol hexane RD' is covered under Chapter 29 of ITCHS classification of exports and import items. It is his submission that in terms of Chapter 2 of the Policy and more specifically Para 2.3 of the Policy, any question or doubt as regards the classification of any item under ITCHS shall be referred to the DGFT whose decision shall be final. It is his submission that in this case, the DGPT has clarified that Exxsol Hexane RD is covered under Chapter 29 and is not cannalised and they are permitted to be imported without any registration/licence. It is his submission that for this proposition they rely on the following decisions of the Tribunal

(i) Cineland v. CCE, Chennai [1999 (114) ELT 653] as confirmed by the Apex Court as reported in 2002 (143) ELT A68.

(ii) Casio India Co. Ltd. v. CCE, Mumbai [2000 (121) ELT 379]

(iii) Commissioner of Central Excise, Hyderabad v. Sanghi Spinners (I) Ltd. -2006(06)LCX0227 Eq 2007 (209) ELT 0043 (Tri.-Bang.).

(3) It is also his submission that imported Hexane is classifiable under Chapter 29 based upon the nature of the bonding of the product. It is his submission that hexane is a fully saturated hydro carbon consisting of separately chemically defined compounds as per t le chart below:

He would also draw our attention to the report of the Chennai Petroleum Corporation Ltd., (CRCL) which is as under :

He would submit that the percentage of composition of different hydro carbons would indicate that hexane has got the maximum percentage. It is his submission that on technical grounds also the product merits classification under Chapter 29 as according to Note 1(a) and (b) of Chapter 29 would apply. It is his submission that the product imported is a colourless, flammable liquid derived from distillation of petroleum, used as a solvent. It is his submission that the imported product contains different isomers as Hexane, would be 89% a per the suppliers report and 88% as per the test Report of CPCL. It was submitted that presence of other contents, the percentage of which does not exceed 12% has to be treated as impurities. He would also submit that CBEC Circular dated 22-2-01 classified mixture of hydro carbons under Chapter 29 and hence the product imported by them is squarely covered under Chapter 29 as the said product is a mixture of separately chemically defined compounds. It is his submission that Hexane imported is not a motor spirit.


4. Learned SDR on the other hand would submit that the composition of the product as indicated in the above paragraph will clearly indicate that SI. No. 5 to 9 in the composition are not isomers. It is her submission that Chapter note 1(a) and 1(b) and Chapter 29 are very relevant for the product to classify under Chapter 29. It was submitted that by application of Chapter note 1(a) 1(b), the product would get out of Chapter 29 and will automatically fall under Chapter 27. It is her submission that the said 'Exxsol Hexane RD' is not a pure chemical and is a mixture of chemical compounds and hence does not fulfill the conditions of note 1(a) to Chapter 29 of the CETA. It is her submission that Hexane is a chain alkine chemical and each of the isomers which is found in the said chemical have separate definite structural diagram. It is the submission of the SDR that the composition of the product as provided by the supplier indicates existence of 12 organic compounds of the product. In other words, the product 'Exxsol Hexane' is a mixture of 12 organic chemicals in different percentage, proportion by weight. Hence 'Exxsol Hexane RD' cane be considered as a separate chemically defined compound. She would exhort us to go through the contents of the test reports as given by CRCL and Indian Institute of Petroleum, in view of these submissions, the impugned order is correct and the order to the extent it classifies the product under chapter heading 211112 is liable to be set aside and the classification has to be made under Chapter heading 2710112.


5. We have considered the submissions made at length by both sides and perused the records.


6. The issue involved in this case is regarding the classification of the product 'Exxsol Hexane RD'. It is the contention of the revenue that the said product will merit classification under Chapter 27 of the CETA while the as-sessees contend that the said product will merit classification under Chapter 29 of ITC-HS classification of Export Import items 2002-2007. The learned adjudicating authority has relied upon the various test reports given by CRCL and Indian Institute of Petroleum to come to the conclusion that the product imported has a Special Boiling Point Spirits with nominal boiling point range of 63-70°C. It is his finding that the such a boiling point of the product will be of the product which will fall under Chapter 27 of CETA. As regards the classification given by the DGFT, the learned adjudicating authority has brushed aside that the clarification does not cover 'Exxsol Hexane RD' in paragraph 81.


7. The first and foremost thing we have to see whether the said product would merit classification under Chapter 29. It is undisputed in these cases that the assessees are claiming the product is used by them, for the purpose of being used as a solvent, in pharmaceuticals, bulk drugs and oil seed extractions and in polymers and plastic industries. Mere perusal of the assessee's list would indicate that either they are traders or manufacturers of bulk drugs and pharmaceuticals or vegetable extraction units. The said fact is not disputed by the revenue in the Order-in-Original before us. We find that after the said investigation started and various show cause notices issued, the Chemical Industries Apex body of the manufacturers of chemicals sent a representation to the DGFT New Delhi on 17th April, 2004. We may reproduce the said representation :

CMEMICAL INDUSTRIES/ ASSOCIATION

17th April 2004

To

The Director General of Foreign Trade Udyog Bhavan Moulana Azad Road, New Delhi-110011

Sub: Hexane

Dear Sir,

We would like to bring to your notice certain difficulties faced by our members in different industries like Pharmaceutical & Bulk drugs, Oil seed Extraction Polymers & Plastics etc.

Hexane which is generally available as mixture of Isomers of Hexane or Commercial Hexane in commercial quantities is a chemical product which is one of the raw materials used by our members in the above mentioned industries. It is used as a solvent in manufacturing processes.

Hexane available locally is not able to meet the international quality standard and the local refineries are not able to meet the specific quality needs our members. The products available nationally have very sulphur and Benzene content which are basically carcinogens. These properties are very crucial for our member organisation in their processes as many of them export their end product and the same has to meet international standards. Hence our member organizations are left with no other choice other than import of low sulphur low Benzene products conforming to international standards. Few of the importers of Hexane are.

1. Dr. Reddys Laboratories Ltd., Hyderabad

2. Shasun Chemicals & Drug Ltd., Chennai

3. Synthetic Industrial Products Ltd, Cochin

4. Plant Lipids, Cochin

5. Sami Labs Ltd., Bangalore

6. Ranbaxy Laboratories Ltd., Haryana

7. Herdillia Unimers Ltd., Mumbai Etc., and all of them are manufacturers and Exporters of bulk and basic drug [generally classified active Pharmaceutical Ingradients. - API]

Our members to our notice that they face hardships while importing Hexane due to certain ambiguity in classification. Hexane has specific heading in Chapter 29.01.10.00 [as per HSN]. The import policy for this heading is free and can be imported as OGL, under this heading and ports like Haldia, Mangalore, Chennai had been following this clearing the goods under OGL.

There is also another practice followed by other port like Kandla where Hexane is classified under a vague heading as light oils under Chapter 27.10 but still under OGL, but special Excise duty levied which is claimed by our members as Cenvat credit. Though classifying under 27.10 is not acceptable to the imports are happening at Kandla with pending disputes.

But now few of our members in certain ports have started facing problems as it is interpreted that Hexane is not covered under OGL, but it is a canalized item through IOC or other oil companies. We see from the policy book that the public sector Oil companies have been authorised as a canalising agency only for the transportation fuel and not for any chemical products which is used as raw material in a manufacturing process. These issues of OGL/Canalisation are being raised only because of wrong interpretation of the classification and the custom authorities fail to accept/understand the difference between a Chemical transportation fuel and the principle behind canalizing import of fuels.

Hence we kindly request you to give a clarification to the effect that Hexane Irrespective of the classification is covered under OGL.

Also we would be grateful if a further clarification is given that the public sector Oil companies have been made the canalising agency only for fuels and not for any chemicals. A specific clarification may be given for Chapter 27.10 as fuels and canalisation of fuels are covered only under this chapter and there is also possibility that chemicals which does not meet the specification of fuel may also fall under the heading 27.10. Hence it is necessary to remove any ambiguity in policy which would affect the Trade and commerce.

We would be only happy to provide with any further information which would help to speedup the clarification as our member organizations are continuing to face hardships in different ports.

We look forward to your immediate attention and clarification which would help our members to meet their export commitments in time.

Thanking you.,
Your faithfully,
For Chemicals Industries Association

Sd/-
P.K.N. Panieckr
President

cc -1 Mr. M. Rafeeque Ahmed, President, Federation of Indian Export Organisation, PHD House, New Delhi -110016

Regd. Office & Admn. : Room No. 4, First Floor, ISTE Professional Centre,

Anna University Staff Quarters Campus, Gandhimandapam Road, Chennai - 600025.

Phone : 2442 0579 Fax : 2442 0579
E-mail: chemindassn@sify.com
Personel Phone 24 Fax : 2499 1447
E-mail: pknpanicker@sify.com


8. On receipt of such a representation, the Govt, of India, Ministry of Commerce and Industries vide their letter dated 14-7-04 issued a policy circular which is as under (page 389).

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF COMMERCE
DIRECTORATE GENERAL OF FOREIGN TRADE
UDYOG BHAVAN, NEW DELHI-110011 POLICY CIRCULAR No. 40 (RE-2003)/2002-2007 New Delhi, Dated: 14-7-2004

To

All Licensing Authorities
All Commissioners of Customs,
Subject: Clarifications regarding import of Hexane covered under Chapter 29 of ITC (HS) Classifications of Export and Import Items, 2002-2007.

Representations have been received regarding clarification for classification of Hexane in the ITC(HS) Classification of Export and Import Items, 2002-07.

The issue has been examined in consultation with the Department of Chemicals and Petrochemicals, Ministry of Chemicals and Fertilizers. It is hereby clarified that the import of Hexane is covered in Chapter 29 of ITC(HS) Classifications of Export and Import Items, 2002-07. This issues with approval of Director General of Foreign Trade.

(Pratima Dikshit) Joint Director General of Foreign Trade [Issued from file no. M-5995 & 5996/AM04/PC-IA]


9. It can be seen from the above reproduced Policy Circular of the DGFT that DGFT has clearly held that the product is covered under Chapter 29 and that also after consultation with department of Chemicals Fertilizers, Ministry of Chemical and Fertilizers. Such a policy circular will have binding force on the import of products in India.


10. General provisions regarding imports and exports as per EXIM Policy needs to be considered in these cases. The relevant provisions, for these cases are reproduced herein below :

"General Provisions Regarding Import and Exports.

2.1 Exports and Imports free unless regulated

Exports and Imports shall be free, except in cases where they are regulated by the provisions of this Policy or any other law for the time being in force. The itemwise export and import policy shall be, as specified in ITC(HS) published and notified by Director General of Foreign Trade, as amended from time to time.

2.2 Compliance with Laws :

Every exporter or importer shall comply with the provisions of the Foreign Trade (Development and Regulation) Act, 1992, the Rules and Orders made thereunder, the provisions of this Policy and the terms and conditions of any licence/certificate/permission granted to him, as well as provisions of any other law for the time being in force. All imported goods shall also be subject to domestic Laws, Rules, Orders, Regulations, technical specifications, environmental and safety norms as applicable to domestically -produced goods. No import or export of rough diamonds shall be permitted unless the shipment parcel is accompanied by Kimberley Process (KP) Certificate required under the procedure specified by the Gem & Jewellery Export Promotion Council (GJEPC).

2.3 Interpretation of Policy

If any question or doubt arises in respect of the interpretation of any provision contained in this Policy, or regarding the classification of any item in the ITC(HS) or Handbook (Vol. 1) or Handbook (Vol. 2) or Schedule of DEPE Rate the said question or doubt shall be referred to the Director General of Foreign Trade whose decision thereon shall be final and binding. If any question or doubt arises whether a licence/certificate/permission has been issued in accordance with this Policy or if any question or doubt arises touching upon the scope and content of such documents, the same shall be referred to the Director General of Foreign Trade whose decision thereon shall be final and binding."(Emphasis supplied)


11. It can be noticed from the above reproduced paragraphs that Para 2.3 specifically talks about interpretation of the policy and clearly indicates that if any question or doubt arises in respect of interpretation of any provisions or regarding classification of any item that doubt shall be referred to DGFT and his decision therein shall be final and binding. We have already reproduced the decision of the DGFT on a representation made by the Chemical Industries Association herein above. This would indicate clearly that the product imported by assessee i.e. "Exxsol Hexane RD" would fall under Chapter 29.


12. As regards the authority of the DGFT to interpret the policy of the binding nature of the same, the Hon'ble Supreme Court in the recent case of Atul Commodities v. CCE, Cochin as reported at [2009 (235) ELT 1385 (S.C.)] at paragraph 17 has settled the law. We may read the said & portion of paragraph Para 17:

"In para 2.3 of the FTP, DGFT is empowered to interpret the policy if any doubt or question arises in respect of interpretation of any provision in FTP or in the matter of classification of any item in the ITC(HS) or in the hand book, such question or doubt shall be referred to the DGFT whose decision therein shall be final and binding".


13. The above ratio of the Hon'ble Supreme Court will fortify our view that once DGFT gives clarification/policy circular, that is binding on all. In this case, the said policy circular as issued by the DGFT indicating that the product imported by the assessees herein would merit classification under Chapter 29 is binding on the Customs Authorities. We also find that our above view is fortified by the decision of the Tribunal in the case of Cine Land (supra).

"We also find that it is now a well settled law that clarification on Import Policy issued by office of DGFT is binding on Customs as far as ITC Policy is concerned in view of the decisions cited by Id. Senior Advocate supra". We also find that it is now well settled that the clarifications on import policy issued by the O/O DGFT is binding on the Customs as far as ITC policy is concerned. We find that the said decision of the Tribunal was taken in Civil Appeal by the Revenue to the Apex Court and the Apex Court had dismissed the Civil Appeal filed by the revenue. We find that identical views have been expressed by the coordinate benches of the Tribunal in the case of Casio India Ltd.; (supra) and Sanghi Spinners (India) Ltd. (supra). In view of the foregoing reasons, we find in these cases the clarification given by DGFT as regards the same products which have been imported by the assessees in these appeals, and, hence if the DGFT clarified that the products imported would fall or merit classification under Chapters 29, the same is binding on customs authority and they cannot take a view contrary to the said Policy Circular.


14. Since we have disposed of all these appeals only on the issue of lack of jurisdiction of the Customs Authority to reclassify the products on the basis of the clarification given by the DGFT, we do not consider it necessary to go into all the other aspects which have been raised by both sides while arguing the matter before us.


15. In view of the foregoing reasons we hold that the classification of the product imported by the assessees in all these cases would merit classification under Chapter 29 of the Customs Tariff Act 1962 and not under Chapter 27 of the Customs Tariff Act. Consequently all the benefits will be available to the assessees herein and the appeals herein above as indicated in Paragraph (1) are disposed of with these findings.


16. In the end all the appeals filed by the assessees are allowed and the appeals filed by revenue are rejected.

(Pronounced in open court on 19-6-2009)

1 Paragraph number as per certified copy.

Equivalent 2010 (250) ELT 0225 (Tri. - Bang.)