2011(06)LCX0217

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. I]

S/Shri P.G. Chacko, Member (J) and Sahab Singh, Member (T)

Ganesh International

Versus

Commissioner of Customs, Mumbai

Final Order No. A/184-187/2011-WZB/C-I(CSTB) and Misc. Order No. M/193-194/2011-WZB/C-I(CSTB), dated 9-6-2011 in Application Nos. C/MA(Ors)/852-853/2009-Mum in Appeal Nos. C/419-420/2003-Mum, C/1191/2006-Mum and C/1049/2007-Mum

Cases Quoted -

Collector v. Chemphar Drugs & Liniments -1989(02)LCX0024 Eq 1989 (040) ELT 0276 (S.C) ~ Referred [Para 11.2]

Collector v. Cotspun Ltd. - 1999(09)LCX0297 Eq 1999 (113) ELT 0353 (S.C.) - Distinguished [Paras 9.2,9.9]

Collector v. Re-Rolling Mills -1997(07)LCX0051 Eq 1997 (094) ELT 0008 (S.C.) - Applied [Para 9.2,9.6,9.8,9.10,9.11]

Commissioner v. ACER India Ltd. - 2004(09)LCX0014 Eq 2004 (172) ELT 0289 (S.C.) - Referred [Para 10.1]

Commissioner v. Bal Pharma Ltd. - 2010(09)LCX0012 Eq 2010 (259) ELT 0010 (S.C.) - Relied on [Para 10.7]

Commissioner v. Hindustan Gas and Industries Ltd. - 2006(07)LCX0062 Eq 2006 (202) ELT 0693 (Tribunal)I Held per incuriam [Para 9.2,9.8]

Commissioner v. Jindal Vijaya Nagar Steel Ltd. - 2006(08)LCX0278 Eq 2007 (207) ELT 0047 (Kar.) Relied on [Paras 9.2,9.8]

Commissioner v. R.K. Impex - 2010 (259) ELT 0725 (Tribunal) - Noted [Paras 9.2,9.4]

Commissioner v. Videocon Appliances - 2008(07)LCX0146 Eq 2009 (235) ELT 0513 (Tribunal) Held per incuriam [Paras 9.2,9.8]

Ford India Pvt. Ltd. v. Commissioner - 2008(04)LCX0142 Eq 2008 (228) ELT 0071 (Tribunal) - Relied on [Paras 9.2,9.7]

Ganesh International v. Commissioner - 2004 (169) ELT284(Tribunal)Relied[Paras10.2,10.4,10.5,10.7,10.8,11.3]

Indian Petrochemicals Corporation Ltd. v. Collector -1990(07)LCX0097 Eq 1993 (065) ELT 0545 (Tribunal)- Referred [Para 10.1]

Jersy India Ltd. v. Commissioner - 2000(03)LCX0058 Eq 2001 (131) ELT 0434 (Tribunal) - Referred [Para 10.1]

Mac and Megha Agro Equipments Pvt. Ltd. v. Commissioner- 2006(02)LCX0210 Eq 2006 (199) ELT 0260 (Tribunal) - Held per incuriam [Paras 9.2,9.8]

Madhus Garage Equipments v. Commissioner - 2006(01)LCX0232 Eq 2006 (198) ELT 0388 (Tribunal- Held per incuriam [Paras 9.2,9.8]

Madurai Power Corporation Pvt. Ltd. v. Dy. Commissioner - 2007(08)LCX0456 Eq 2008 (229) ELT 0521 (Mad.)- Held per incuriam [Paras 9.2,9.10]

Pahwa Chemicals Pvt. Ltd. v. Commissioner - 2005(09)LCX0031 Eq 2005 (189) ELT 0257 (S.C.) -- Referred [Para 11.2]

Rahul Ramanbhai Patel v. Commissioner - 2010(04)LCX0142 Eq 2010 (256) ELT 0424 (Tribunal) Noted [Paras 9.2,9.5]

Sandur Manganese and Iron Ores Ltd. v. Commissioner - 2007(02)LCX0100 Eq 2007 (211) ELT 0505 (Tribunal)- Relied on [Paras 9.2,9.7,9.10]

Saurashtra Chemical v. Collector -1997(09)LCX0021 Eq 1997 (095) ELT 0455 (S.C.) - Distinguished [Para 10.1]

Saurashtra Chemicals v. Collector- 1985(08)LCX0017 Eq 1986 (023) ELT 0283 (Tribunal-LB) Distinguished [Paras 10.1,10.6]

Shiv Kripa Ispat Pvt. Ltd. v. Commissioner - 2008(09)LCX0305 Eq 2009 (235) ELT 0623 (Tribunal-LB) Relied on [Para 12.2]

STI India Ltd. v. Commissioner - 2007(10)LCX0125 Eq 2008 (222) ELT 0112 (Tribunal) Held per incuriam [Paras 9.2,9.8]

Sudhan Spinning Mills Pvt. Ltd. v. Commissioner - 2010(01)LCX0174 Eq 2010 (254) ELT 0179 (Tribunal)Relied on [Paras9.2,9.7]

Union of India v. Jain Shudh Vanaspati Ltd. -1996(08)LCX0038 Eq 1996 (086) ELT 0460 (S.C.) Applied [Paras 9.2,9.3,9.4,9.5,9.6,9.7,9.8,9.11]

Venus Enterprises v. Commissioner - 2006(02)LCX0329 Eq 2006 (199) ELT 0405 (Mad.) - Referred [Paras 9.2,9.5,9.11]

Venus Enterprises v. Commissioner - 2004(11)LCX0335 Eq 2007 (209) ELT A061 (S.C.) - Noted [Paras 9.5,10.6]

Advocated By -

S/Shri J.C. Patel and Rajeev Ravi, Advocates, for the
Appellant.
Shri S.S. Katiyar, DR,for the Respondent.

[Order per : P.G. Chacko, Member (J)] -

M/s. Ganesh International (appellant in appeal No. C/419/2003) filed 11 Bills of Entry during the period from July to December 2002 for clearance of consignments of "Long Pepper" imported by them. They described the goods as "Pippali" and classified the same under SH 1211.90 in the Bills of Entry. Their declarations were accepted by the assessing authority and the goods allowed to be cleared on payment of duties of Customs as applicable to SH 1211.90.


2. M/s. Gautam Overseas (appellant in appeal No. C/420/2003) also imported 3 consignments of identical goods described as "Pippali" and classified under SH 1211.90 in the relevant Bills of Entry filed during September-October 2002. These goods were also similarly assessed to duty and allowed to be cleared on payment of the duty.


3. M/s. Radha V. Company (appellant in appeal No. C/1191/2006) also imported 2 consignments described as "Pippali" and classified under SH 1211.90 in September and November 2002. The relevant Bills of Entry were also assessed in the same manner as above and accordingly the goods were cleared on payment of duty as applicable to SH 1211.90.


4. Subsequently, SIIB (Import) launched investigations into the above imports on the basis of information received to the effect that the aforenamed parties had evaded duty by deceptively describing the goods as "Pippali" and wrongly classifying it under SH 1211.90 with intent to pay duty at lesser rate than what was applicable to "Long Pepper" classifiable under SH 0904.11. During the course of investigations, the premises of the importers were searched and certain documents taken over under panchanama. Statements of the importers were also recorded under Section 108 of the Customs Act. On the basis of the results of investigations, show-cause notices were issued to the above importers under Section 28(1) of the Customs Act proposing (a) to reassess the goods to duty by classifying the same under SH 0904.11, (b) to recover differential duty thereon, (c) to hold the goods to be liable to confiscation under Section lll(m) of the Customs Act and (d) to impose penalty under Section 112(b) of the Act. The demand of duty was contested by the importers on numerous grounds.


5. In adjudication of the show-cause notice issued to M/s. Ganesh In-ternational and M/s. Gautam Overseas, the Commissioner of Customs (Import) Mumbai, confirmed demands of duty of Rs. 60,52,096/- and Rs. 9,75,795/-against M/s. Ganesh International and M/s. Gautam Overseas respectively, held that the goods imported by them and collectively valued at Rs. 1,20,21,554/-were liable to confiscation under Section lll(m) of the Customs Act, imposed redemption fine of Rs. 60,000/- in lieu of confiscation of the goods covered under Bill of Entry No. 315796, dated 5-12-2002 and imposed penalties of Rs. 11.5 lakhs and Rs. 2 lakhs respectively on M/s. Ganesh International and M/s. Gautam Overseas under Section 112(a) of the Act. The first 2 appeals are directed against this decision of the Commissioner.


6. In adjudication of a separate show-cause notice issued to M/s. Radha V. Company, the Joint Commissioner of Customs confirmed total demand of duty of Rs. 7,27,384/- against them in respect of 2 Bills of Entry under Section 28(2) of the Customs Act, held the goods liable for confiscation under Section 111(d) and (m) of the Act and imposed a penalty of Rs. 7,27,384/- on the party under Section 112(a) of the Act. As the goods were not physically available for confiscation, the adjudicating authority refrained from imposing redemption fine. This part of the Joint Commissioner's order was reviewed by the Commis-sioner and, accordingly, an appeal was preferred to the Commissioner (Appeals). The Commissioner (Appeals) accepted the revenue's view by holding that redemption fine was imposable even if the goods were not available. The appellate authority remanded the matter to the lower authority for determining the quantum of fine. This remand order of the Commissioner (Appeals) is under challenge in Appeal No. C/1049/2007.


7. The Joint Commissioner's order against M/s. Radha V. Company was taken by them in appeal to the Commissioner (Appeals) but the latter only reduced the penalty to Rs. 2 lakhs while upholding the demand of duty against the appellant. This order of the Commissioner (Appeals) is the order impugned in appeal No. C/1191/06 filed by M/s. Radha V. Company.


8. Heard both sides. The main issues arising out of the rival contentions are the following :-

(i) Whether, in respect of the imported goods which were assessed to duty under Section 17 of the Customs Act and cleared on payment of such duty under Section 47 of the Act, any amount of duty short-levied can be demanded subsequently under Section 28 of the Act without recourse to revision of assessment by the procedure laid down under Section 129D of the Act;
(ii) Whether the goods imported by the appellants should be classified under SH 1211.90 of the First Schedule to the Customs Tariff Act (CTA Schedule) as claimed by them or under SH 0904.11 of the said Schedule as claimed by the Revenue for the period of dispute;
(iii) Whether the demand of duty raised on M/s. Radha V. Company is barred by limitation;
(iv) Whether any fine is imposable under Section 125 of the Customs Act in lieu of confiscation of the goods imported and cleared by M/s. Radha V. Company.

9. Issue No. (i)

9.1 The learned Advocate Shri J.C. Patel representing M/s. Ganesh In-ternational and M/s. Gautam Overseas has contended that, as all the Bills of Entry were assessed under Section 17 of the Customs Act by classifying the goods under SH 1211.90 in view of the examination order of the Assistant Drugs Controller and such assessment was not revised in accordance with the procedure laid down under Section 129D of the Customs Act, it was not open to the department to issue any show-cause notice under Section 28 of the Act seeking to reclassify the goods under heading 0904.11 and recover additional amount of duty on the ground of short-levy. In this context, the learned counsel has also moved the miscellaneous applications filed by his clients for incorporating the above contention as an additional ground of appeals. As the proposed 'additional ground' is purely a legal ground, we allow the applications after overruling the objection raised by the learned SDR, who submitted that the above plea was not raised before the adjudicating authority and hence could not be allowed to be raised before the appellate Tribunal. The learned SDR has argued that a show-cause notice could be issued under Section 28 for demanding duty from an importer without resort to Section 129D for revision of assessment.

9.2 Both sides have also cited decisions in support of their respective arguments.

Decisions cited by the learned counsel:

(1) Commissioner of Cus., Mangalore v. Jindal Vijaya Nagar Steel Ltd., 2006(08)LCX0278 Eq 2007 (207) ELT 0047(Kar.)

(2) Commr. of Cus. (Imports) Mumbai v. Hindustan Gas & Industries Ltd., 2006(07)LCX0062 Eq 2006 (202) ELT 0693 (Tri.-Mumbai)

(3) Madhus Garage Equipments v. Commissioner of Cus. (Appeals), Bangalore - 2006(01)LCX0232 Eq 2006 (198) ELT 0388 (Tri.-Bang.)

(4) Commissioner ofC.Ex., Aurangabad v. Videocon Appliances - 2008(07)LCX0146 Eq 2009 (235) ELT 0513 (Tri.-Mumbai)

(5) Mac & Megha Agro Equipments (P) Ltd. v. Commr of Cus., Cochin -2006(02)LCX0210 Eq 2006 (199) ELT 0260 (Tri.-Bang.)

(6) STI India Ltd. v. Commissioner of C. Ex., Indore - 2007(10)LCX0125 Eq 2008 (222) ELT 0112 (Tri.-Del.)

(7) Collector of Central Excise, Baroda v. Cotspun Limited - 1999(09)LCX0297 Eq 1999 (113) ELT 0353 (S.C.)

(8) Madurai Power Corpn. (P) Ltd-, v. Deputy Commr. of C.Ex., Madurai-I -2007(08)LCX0456 Eq 2008 (229) ELT 0521 (Mad.)

The learned Counsel has also pointed out a difference between Section 28 of the Customs Act and Section 11A of the Central Excise Act. An amount of duty of excise short-levied or non-levied can be demanded from the manufacturer of the excisable goods notwithstanding any approval, acceptance or assessment relating to the rate of duty or the value of the goods. But there is no reference to approval, acceptance or assessment in the text of Section 28 of the Customs Act. Therefore, according to the learned counsel, Section 28 of the Customs Act cannot be invoked to demand Customs duty on the ground of short-levy or non-levy without a successful challenge to the assessment.

Decisions cited by the learned SDR :

(1) Union of India v. Jain Shudh Vanaspati Ltd., 1996(08)LCX0038 Eq 1996 (086) ELT 0460 (S.C.)

(2) Collector of Central Excise, Bhubaneshwar v. Re-Rolling Mills, 1997(07)LCX0051 Eq 1997 (094) ELT 0008 (S.C.)

(3) Venus Enterprises v. Commissioner of Customs, Chennai, 2006(02)LCX0329 Eq 2006 (199) ELT 0405 (Mad.)

(4) Sandur Manganese & Iron Ores Ltd. v. Commissioner of Cus., Chennai, 2007(02)LCX0100 Eq 2007 (211) ELT 0505 (Tri.-Chennai)

(5) Ford India Private Ltd. v. Commr. of Cus. Chennai, 2008(04)LCX0142 Eq 2008 (228) ELT 0071 (Tri.-Chennai).

(6) Sudhan Spinning Mills (P) Ltd. v. Commr. ofC.Ex., Madurai, 2010(01)LCX0174 Eq 2010 (254) ELT 0179 (Tri.-Chennai)

(7) Rahul Ramanbhai Patel v. Commr. of Cus. (Import), Mumbai, 2010(04)LCX0142 Eq 2010 (256) ELT 0424 (Tri.-Mumbai)


(8) Commr. of Cus., (ACC & Import), Mumbai v. R.K. Impex, 2010 (259) ELT 0725 (Tri.-Mumbai)

Learned SDR, has also pointed out that the Supreme Court's judgments in Jain Shudh Vanaspati case and Re-Rolling Mills case were not considered by the Karnataka High Court in the case of Jindal Vijaya Nagar Steel Ltd. (supra) or by the Tribunal in other cases cited by the learned counsel. According to the learned SDR, no decision cited by the learned Counsel can be followed as a precedent.

9.3 In his rejoinder, the learned counsel has endeavoured to distinguish Jain Shudh Vanaspati Ltd. case by submitting that the view taken by the Apex Court in that case could be applied only in cases involving fraud on the Revenue. As it is not the case of the department that the appellants played any fraud on the Revenue, the Puling in Jain Shudh Vanaspati case is not applicable to the instant case. For this reason, all other decisions cited by the SDR, where the ruling of the Apex Court in Jain Shudh Vanaspati case was followed, are also liable to be ignored.

9.4 We have carefully considered the submissions. The goods imported by the appellants were assessed to duty under Section 17 of the Customs Act and cleared on payment of such duty under Section 47 of the Act. The show-cause notice subsequently issued by the department under Section 28(1) of the Act proposed to revise classification of the goods and to collect from the appellants the differential amount of duty based on SH 0904.11 of the CTA Schedule. According to the appellants, any revision of classification of the goods could have been made only by recourse to the procedure laid down under Section 129D of the Act and not under Section 28 of the Act. According to the respondent, any amount of duty short-levied or short-paid, for whatever reason, could be determined and demanded under Section 28 of the Act. This legal issue is covered by some of the decisions cited by the learned Advocate and the learned SDR. The earliest judgment referred to by both sides is that of the Hon'ble Supreme Court in the case of Jain Shudh Vanaspati Ltd.(supra). The learned counsel has argued that the relevant ruling of the Apex Court in the said case is applicable only in cases involving fraud on the Revenue. On the other hand, the learned SDR has argued that the ruling is applicable to other cases also. Obviously, while the learned counsel relied on para-6 of the Apex Court's judgment, the learned S.D.R. focused on para 5 of the said judgment. We note that, in the case of R.K. Impex (supra), the ratio of the Apex Court's judgment in the aforesaid case was analyzed at length and it was held as under :-

"We have given careful consideration to the submissions. On a perusal of the impugned order, we have found manv an infirmity in the order. Some of the sweeping observations made by the learned Commissioner (Appeals) will not stand the test of law or reason. One basic question which appears to have been considered by the learned Commissioner (Appeals) is whether it was open to the department to make out a case of short-payment/short-levy of duty against an assessee who was already possessed of an out-of-charge order issued under Section 47 of the Customs Act by the assessing authority. The learned Commissioner (Appeals) thought that any such demand of duty could be raised only by recourse to the remedy available under Section 129D of the Act. The decision of the Hon'ble Supreme Court in Jain Shudh Vanaspati (supra) should dispel the apprehensions of the learned Commissioner (Appeals). We are not impressed with the way the learned counsel has sought to distinguish Jain Shudh Vanaspati case. He has submitted that, in that case, the importer had fraudulently camouflaged the stainless steel containers of the imported oil by painting them so as to make the containers look like mild steel containers. The learned counsel has argued that the ruling of the Apex Court will be applicable only to a case in-volving fraud. We have perused the judgment of the Apex Court and we have found the court's ruling to be clear on the applicability of Section 124 to goods allowed to be cleared out-of-charge under Section 47. Their Lordships held that a clearance order under Section 47 obtained by fraudulent means could not debar the issuance of a show-cause notice for confiscation of goods under Section 124. This ruling was rendered in the context of examining the scope of Section 124. What is relevant to the present context is the legal proposition laid down by the Apex Court in para 5 of its judgment, which reads as under :

"5. It is patent that a show cause notice under the provisions of Section 28 for payment of Customs duties not levied or short-levied or erroneously refunded can be issued only subsequent to the clearance under Section 47 of the concerned goods. Further, Section 28 provides time limits for the issuance of the show cause notice thereunder commencing from the "relevant date"; "relevant date" is defined by sub-section (3) of Section 28 for the purpose of Section 28 to be the date on which the order for clearance of the goods has been made in a case where duty has not been levied; which is to say that the date upon which the permissible period begins to run is the date of the order under Section 47. The High Court was, therefore, in error in coming to the conclusion that no show cause notice under Section 28 could have been issued until and unless the order under Section 47 had been first revised under Section 130."

The ruling which emerges from the above judgment of the Apex Court is that, even subsequent to clearance of goods under Section 47 of the Cus-toms Act, a show-cause notice could be issued under Section 28(1) within the prescribed period of time reckoned from the relevant date for the purpose of recovery of customs duty not-levied, short-levied, not-paid, short-paid etc".

9.5 In the case of Venus Enterprises (supra), the Hon'ble High Court held that a show-cause notice under Section 28(1) of the Customs Act for recovery of Customs duty not levied or short-levied or erroneously refunded could be issued subsequent to the clearance of the goods under Section 47 of the Act. The Hon'ble High Court so held by relying on the Apex Court's ruling in Jain Shudh Vanaspati case (supra). The facts of the case of Venus Enterprises (supra) and the ratio of the High Court's decision in that case were discussed by this Tribunal in the case of Rahul Ramanbhai Patel (supra) as follows t-

"We further note that, in the case of Venus Enterprises (supra), the assessee had filed 11 Bills of Entry for clearance of computer parts in 1995-96. The declared value was accepted in respect of some of these Bills of Entry, while in respecf of other Bills of Entry, the value was enhanced. After the assessment, Consignments Were allowed tO be Cleared under Section 47. However, on subsequent investigations by the DR1, Certain incriminating documents were recovered from the premises of the importer. On the basis of the results of the investigations, the department issued a show-cause notice to the importer under Section 28(1) of the Customs Act for recovery of further amount of duty of over Rs. 24 lakhs from them as also for confiscation of the goods and imposition of penalty on the importer. One of the questions of law framed by the Hon'ble High Court reads thus :-


"Whether the Tribunal was right in holding that the order of assessment on which no appeal was preferred, can be reopened by issue of a fresh show-cause notice under Section 28 (1) of the Customs Act, in the light of the Apex Court's decision reported in 2004 (172)) ELT 0145 (S.C.) in the case of Priya Blue Industries Ltd. v. Commissioner of Customs?"

The Hon'ble High Court answered the above question in favour of the Revenue in paragraph 6 of its judgment, which is reproduced below :-

"6. With regard to question No. 1, the law is well settled that a show-cause notice under the provisions of Section 28 of the Act for payment of Customs duties not levied or short-levied or erroneously refunded can be issued only subsequent to the clearance of the goods under Section 47 of the Act vide Union of India v. Jain Shudh Vanaspati Ltd. [1996(08)LCX0038 Eq 1996 (086) ELT 0460 (S.C.)]. Therefore, as rightly held by the Tribunal, if the contention of the appellant's counsel that when the goods were already cleared, no demand notice can be issued under Section 28(1) of the Act as unworkable and redundant, inasmuch as the jurisdiction of the authorities to issue notice under Section 28 of the Act with respect to the duty, which has been short-levied, would arise only in the case where the goods were already cleared. In view of the clear finding with regard to the misdeclaration and suppression of value, which led to the undervaluation and proposed short-levy of duty, we do not see any lack of jurisdiction on the part of the adjudicating authority to issue notice under Section 28(1) of the Act".

We are told that the SLP filed against the above decision of the High Court was dismissed by the Apex Court [Venus Enterprises v. Commissioner - 2004(11)LCX0335 Eq 2007 (209) ELT A061 (S.C.)]".

9.6 We further note that the ratio of the Apex Court's decision in Jain Shudh Vanaspati case (supra), as contained in para 5 of its judgment, was applied by the court later in a Central Excise case (Re-Rolling Mills case) after observing that Section HA of the Central Excise Act was pari materia with Section 28 of the Customs Act. The Hon'ble Supreme Court thus held against the assessee (Re-Rolling Mills) that a show-cause notice could be issued under Section HA of the Central Excise Act for demand of any duty not paid or short-paid, without revising the assessment of the goods under Section 35E of the said Act.

9.7 The Apex Court's ruling in Jain Shudh Vanaspati case (supra) was appropriately followed by the Tribunal in numerous other cases viz. Ford India Private Ltd, Sudhan Spinning Mills (P) Ltd., Sandur Manganese & Iron Ores Ltd. etc.

9.8 As rightly pointed out by the learned SDR, the Hon'ble High Court's decision in the case of Jindal Vijaya Nagar Steel Ltd. (supra) to the effect that the department could not have issued show-cause notice for recovery of interest on duty from the assessee without challenging the original assessment order was rendered without considering the Apex Court's ruling in Jain Shudh Va-naspati case. In the cases of Hindustan Gas & Industries Ltd., Madhus Garage Equipments, Videocon Appliances, Mac & Megha Agro Equipments (P) Ltd. and STI India Ltd. cited by the learned counsel, the Tribunal held that the Revenue could not demand duty from the assessee under Section 28 of the Customs Act without review of the assessment- The Apex Court's ruling in Jain Shudh Vanaspati case was not considered in any of these cases and, therefore, the view taken in the cited cases is per incuriam.

9.9 We have also perused the Hon'ble Supreme Court's judgment in the case of Cotspun Ltd. (supra) cited by the learned counsel. In that case, the question considered by the Apex Court was whether, under Rule 10 of the Central Excise Rules, 1944, duty of excise could be demanded from the assessee on the ground that there was short-levy of duty based on an approved classification list. This question was answered in the negative. In our view, the appellant cannot claim support from the Apex Court's decision. The issue in the present case is different from the issue considered by the Apex Court in Cotspun case.

9.10 In the case of Madurai Power Corpn. (P) Ltd. (supra) cited by the learned counsel, the Hon'ble Madras High Court held that Section 11A could not override Section 35E of the Central Excise Act. In the facts and circumstances of the particular case, the Hon'ble High Court held that the show-cause notice is sued under Section HA of the Act without following the procedure laid down under Section 35E of the Act was without jurisdiction. Madurai Power Corporation was engaged in the generation of electricity, for which Low-Sulphur Heavy Stock (LSHS) was used as primary fuel. The corporation procured LSHS at a concessional rate of duty under Notification No. 3/2000-C.E. For this purpose, they used a certificate issued by the competent authority, which permitted them to procure LSHS without payment of duty from various installations of Indian OilCorporation Ltd. The question arose as to whether the benefit of Notification No. 3/2000-C.E. could be denied to the corporation and whether duty on LSHS could be demanded under Section 11A of the Central Excise without cancellation of the said certificate by the procedure laid down tinder Section 35E of the Act. It was
this question which was answered in the negative by the Hon'ble High Court. We note that the Hon'ble High Court's decision was rendered without noticing the Hon'ble Supreme Court's judgment in Re-Rolling Mills case (supra) wherein the Apex Court passed the following order :

"The learned Counsel for the parties do not dispute that this appeal is covered by the decision of this Court in Union of India & Ors. v. Jain Shudh Vanaspati Ltd. &Anr. - 1996(08)LCX0038 Eq 1996 (086) ELT 0460 (S.C.) = (1996) 10 SCC 520. In that case the Court was dealing with Section 28 of the Customs Act which is in pari materia with Section 11A of the Central Excise Act. The said decision is thus applicable to the present case also. For the reasons given in the said judgment, the appeal is dismissed with no order as to costs."

Therefore, the Hon'ble High Court's decision in Madurai Poxver Corpn. case cannot be followed as a binding precedent.

9.11 The issue in hand is squarely covered in favour of the Revenue by the Hon'ble Supreme Court's ruling in Jain Shudh Vanaspati case and the Hon'ble High Court's decision in Venus Enterprises case. Issue No. (i) thus stands an-cworpo' in tfie affirmative in favour of the Revenue.

10. Issue No. (ii): .

10.1 The commodity imported by the appellants is dried or unripe fruit of "Long Pepper" {piper longum), which was described m the relevant mils orcn-try as "Pippali" and classified under SH 1211.90 of the First Schedule to the customs Tariff Act, 1975. According to the Revenue, the correct classification of the goods for the period of dispute would be under SH 0904.11 of the said Schedule. Heading 12.11 and the various sub-headings thereof, as they stood during the period of dispute, are as shown below:

Heading 09.04 and the various sub-headings thereof, as they stood during the period of dispute, are as shown below :

The learned counsel for the appellants submitted that, as plants and parts of plants (including fruits) of a kind used primarily in pharmacy, fresh or dried, were correctly classifiable under Heading 12.11, the dried unripe fruit of the plant "Long Pepper" was classifiable under SH 1211.90 only inasmuch as fruit of "Long Pepper" was predominantly used as medicine in Ayurveda, Siddha and Unani systems. In this connection, the learned counsel referred to the following literature :

(1) INDIAN MATERIA MEDICA by Dr. KM. Nadkarni : It contains Therapeutic Notes on action and uses of parts of piper longum in Ayurveda, Siddha and Unani systems. The parts used are stated to be immature berries (i.e., dried unripe fruits or fruiting spikes) dried in the sun, and stems (roots). The book states inter alia thus :-
"Both, fruit and root are much prescribed in palsy, gout, rheumatism, lumbago, etc. Fruit is given to women after parturition to check haemorrhage and to ward off fever. As vermifuge it is one of the best remedies for colic in children. Fruit is used to some extent as a spice".

(2) MEDICINAL PLANTS by S.K. Jain : This book states thus :
"Long Pepper" consists of the dried fruits of the plant. It is used as a tonic, and in making irritating snuffs. It is also used in liniments for rheumatic pains and paralysis. A decoction made from the dried immature mius is ussiiii in Ci ironic uioncrims

(3) HANDBOOK OF AYURVEDIC MEDICINAL PLANTS by L.D. Kapoor :
This book, in a section on piper longum, discusses the medicinal properties and uses
thus :

"The berries are a cardiac stimulant, carminative, alterative, tonic, laxative, digestive, stomachic, and antiseptic. It is given with honey in doses of 5 to 10 gr for indigestion, dyspepsia, flatulent colic, cough, chronic bronchitis, chest affections, and in asthma. It is also very useful in enlarged spleen, palsy, gout, rheumatism, and lumbago. Fruit is vermifuge and also used after childbirth to check post-partum haemorrhage."

(4) VEGETABLE DRUGS OF INDIA by D. Sanyal and R. Ghose : This book
discusses the uses of Piper Longum as follows :

"P. Longum :- stimulant, carminative and alterative tonic; more powerful than black pepper. The powdered pipul is given with honey in catarrhal affections, in colic and cholera, and used as an external stimulant application rubbed over painful parts. The fruit is used to some extent as a spice."

(5) TIBETAN MEDICINE ENCYCLOPAEDIA by Dr. Garma : This book
contains the following information about Piper Longum :

"Part used : Fruit, root
Medical Uses : It is used in arthritis, peptic ulcers, viral hepatitis, fertility and cough. In cardio-vascular system it acts as anticoagulant and anti-thrombosis. Piper Longum can be used with adjuvants in anti-TB treatment as anti-hepato-toxic."

(6) PIPER NIGRUM by P.N. Ravindran, Indian Institute of Spices Research :
A section of this study is on "The Indian Long Pepper" and the same mentions its
uses thus :

"The most important use of long pepper is as a medicinal ingredient in the Indian systems of medicine - Ayurveda, Sidha and Unani. Both fruit and dried roots are extensively used."

The. learned counsel pointed out that the literature on "Long Pepper" indicated that its dried fruit was used primarily in pharmacy and that it had only limited use as a spice. It was also submitted that the commodity answered the description of Heading 12.11 and consequently stood excluded from Chapter 9 by virtue of Note 2 of Chapter 9, which reads "This chapter does not cover Cubeb pepper

(Piper Cubeba) or other products of Heading 12.11". It was therefore contended that the subject goods could not be classified under Chapter 9 of the Tariff Schedule. The learned counsel also referred to Explanatory Notes under HSN Heading 12.11. He particularly referred to the illustrative list of products included in Heading 12.11 of HSN. The list included "Long Pepper" (Piper Longum). The learned counsel referred to ITC (HS) Classification 2002-07, where-under "Pippali" was shown in the list of crude drugs "required for the manufacture of Ayurvedic, Unani or any other system of medicine". He also claimed support from Examination Order dated 2-7-2002 obtained by the Customs authorities from the Assistant Drugs Controller, wherein the subject goods was held to be a "crude drug." The learned counsel for the appellants also relied on certificates obtained from manufacturers of Ayurvedic medicines, to whom the appellants had sold the imported goods. He also relied on a letter dated 23-4-2003 of the Ministry of Health and Family Welfare, which stated mat "Pippali" was used in the preparation of Ayurvedic medicines. The learned counsel also referred to an appendix to the Prevention of Food Alteration Rules 1955 to show that "Pippali" or "Long Pepper" did not figure in the list of spices. The learned counsel for the appellants also referred to the statements given by them under Section 108 of the Customs Act. It was contended that, before classifying the goods under Heading 09.04, the department had to discharge the burden of proving that it was not a product of Heading 12.11. This contention was based on Note 2 of Chapter 9 of the Tariff Schedule. In this connection, the learned counsel argued that the relevant headings in the Tariff required to be interpreted and applied in the light of Section Notes and Chapter Notes which were said to have an overriding effect on the Tariff headings as held by the Tribunal's Larger Bench in the case of Saurashtra Chemicals, Porbandar v. Collector of Customs, Bombay - 1985(08)LCX0017 Eq 1986 (023) ELT 0283 (Tri.) affirmed by the Hon'ble Supreme Court in Saurashtra Chemicals v. Collector of Customs - 1997(09)LCX0021 Eq 1997 (095) ELT 0455 (S.C). Reliance was also placed on Indian Petrochemicals Corporation Ltd. v. Collector of C. Ex. - 1990(07)LCX0097 Eq 1993 (065) ELT 0545 (Tri.) and Jersy India Limited v. Commissioner of Central Excise, New Delhi - 2000(03)LCX0058 Eq 2001 (131) ELT 0434 (Tri.-Del.). In these cases also, Section Notes and Chapter Notes were given overriding effect on Tariff Headings. It was also submitted by the learned counsel that the adjudicating authority erred in applying Rule 3(a) of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act. The Commissioner should not have overlooked Rule 1 which laid down that classification had to be determined in accordance with the terms of the Headings and the relative Section or Chapter Notes. In this context, the learned counsel relied on the Supreme Court's judgment in Commissioner of Central Excise, Pondi-cherry v. ACER India Ltd. - 2004(09)LCX0014 Eq 2004 (172) ELT 0289 (S.C.) wherein Chapter Note 6 of Chapter 85 was relied on in preference to Rule 3 of the General Rules of Interpretation for the purpose of interpretation of the relevant headings. Likewise, according to the learned counsel, the adjudicating authority in the instant case should have taken aid of Chapter Note 2 of Chapter 9 in the matter of classifying the subject goods without recourse to Rule 3 of the General Rules of Interpretation.

10.2 The learned SDR submitted, at the outset, that, in a case of one of the appellants (namely, Ganesh International) for a period after 1-3-2003, the same commodity was classified by this Tribunal under Heading 09.04 and that the party did not challenge the decision. The learned SDR extensively referred to Ganesh International v. Commissioner of Customs, Nagpur - 2004(04)LCX0042 Eq 2004 (169) ELT 0284 (Tri.-Mumbai), wherein it was found that "Long Pepper" was generally used as a condiment and was specifically mentioned under Heading 09.04 and it was held that Chapter Note 2 could not be read to mean that the Chapter (Chapter 9) excluded even those products which were specifically mentioned under Heading 09.04. The learned SDR, submitted that, if it was held that "Long- Pepper" on account of its pharmaceutical use stood excluded from Chapter 9 by virtue of Chapter Note 2, its classification under the 8 digit entry (0904 11 10) in the Tariff Schedule w.e.f. 1-3-2003 would become redundant. He argued that Chapter Note 2 could not be so construed as to render the 8 digit classification of "Long Pepper" under SH 0904 11 10 redundant. According to the learned SDR, if "Long Pepper" is classifiable under SH 0904 11 10 from 1-3-2003, it can-only be classified under SH 0904.11 pre-1-3-2003. In this manner, it was argued that the Tribunal's decision in Ganesh International (supra) was squarely applicable to the period of dispute involved in this case.

10.3 The learned SDR also relied on HSN Notes under Heading 12.11 in order to show that fruit of "Long Pepper" was not included in Heading 12.11. It was pointed out that only roots and underground stems of "Long Pepper", and not its fruit, figured in the list of products included in Heading 12.11 as per HSN Notes. The learned SDR. contended that, as fruit of "Long Pepper" was not included in Heading 12.11, its classification under Heading 09.04 was not in any way affected by Note 2 to Chapter 9.

10.4 After giving careful consideration to the submissions, we are of the view that the view taken by the Tribunal in regard to classification of fruit of "Long Pepper" in the case of one of the assessees, namely, Ganesh International for a period after 1-3-2003 would be equally applicable to the period of dispute in the present case (pre-1-3-2003). During the period of dispute in that case (post - 1-3-2003), the 8 digit scheme of classification of goods under the First Schedule to the Customs Tariff Act was in vogue. There was no difference in the description of goods between the main heading (0904) in the 8 digit scheme of classification and the main heading (09.04) in the erstwhile 6 digit scheme. 'Pepper, neither crushed nor ground' was identically classified under SH 0904.11 in the 6 digit scheme and SH 0904 11 in the 8 digit scheme of classification. There was no sub-classification of 'Pepper, neither crushed nor ground' in the 6 digit scheme. In the 8 digit scheme, there is sub-classification of 'Pepper, neither crushed nor ground' under SH 0904 11, as shown below :

Different species of Pepper under the genus 'Piper' remain classified as above with "Piper Longum" (Long Pepper) falling under SH 0904 11 10. Apparently "Long Pepper, neither crushed nor ground" is classified under SH 0904 11 10 in the 8 digit scheme of classification from 1-3-2003. Obviously, pre-1-3-2003, Pepper, neither crushed nor ground (SH 0904 11) in the erstwhile 6 digit scheme of classification included "Long Pepper" and all other species of pepper of the genus 'Piper'. The only difference which we have found in relation to classification of Pepper under Heading 09.04 of the erstwhile 6 digit scheme and heading 0904 of the present 8 digit scheme is that the former is broadly genus-based whereas the latter is finely species-based. It goes without saying that all species of Pepper, such as Long Pepper, Light Black Pepper, Black Pepper, Green Pepper etc., which are seen sub-classified under the entry 0904 11 (Pepper, neither crushed nor ground) in the 8 digit scheme of classification belong to the genus "piper" described as "pepper, neither crushed nor ground" and classified under the entry 0904.11 in the erstwhile 6 digit scheme. In other words, "Long Pepper, neither crushed nor ground" was specifically classified under SH 0904.11 under Heading 09.04 in the 6 digit scheme of classification, pre-1-3-2003. In our view, the effect of Note 2 to Chapter 9 must be examined in this background. In Ganesh International [2004 (169) ELT 284], the Tribunal observed that Chapter Note 2 could not be read to mean that the chapter excluded even those products which were specifically mentioned under Heading 09.04 and that the intention of the legislature was not to first mention a product under one of the entries and then exclude it by a chapter note. The Bench further observed that the Chapter Note should be read to mean that the legislature was speaking of those products which were not spe-cifically mentioned under the heading. We are inclined to adopt the same reasoning in the present case wherein we have already held that "Long Pepper, neither crushed nor ground" was specifically covered by SH 0904.11 (pepper, neither crushed nor ground) under Heading 09.04 in the First Schedule to the Customs Tariff Act prior to 1-3-2003.

10.5 Note 2 to Chapter 9, which did-not undergo any change in the transition from 6 digit scheme to 8 digit scheme of classification, reads as follows:

"This Chapter does not cover Cubeb pepper (Piper cubeba) or other products of Heading 12.11".

The learned counsel has argued that, as the goods imported by the appellants was part of a plant and was of a kind used primarily in pharmacy, it was classifiable under Heading 12.11 and fell within the ambit of "other products of heading 12.11" and hence stood excluded from Chapter 9 by virtue of the above Chapter Note. He has also profusely referred to medical and other literature to show that fruit of "Long Pepper" is primarily used in pharmacy. However, the argument is not acceptable mainly for three reasons. Firstly, the commodity under classification is dried fruit of Long Pepper, neither crushed nor ground, which, as we have already held, is specifically covered by the description "pepper, neither crushed nor ground" under SH 0904.11 for the period of dispute in this case. This description of goods is more specific when compared to the description of goods given under Heading 12.11 which reads thus: "plants and parts of plants (including seeds and fruits)...., fresh or dried, whether or not cut, crushed or powdered". Part of a plant, of a kind used primarily in pharmacy, may or may not be crushed or powed/ground, for its classification under Heading 12.11, whereas fruit of "Long Pepper" shall neither be crushed nor be ground, to be classified under SH 0904.11. If the latter is crushed or ground, it would fall under another subheading viz. SH 0904.12. Therefore, by all means, fruit of "Long Pepper", neither crushed nor ground, was specifically covered under SH 0904.11 during the period of dispute. Secondly, the scope of the expression "other products of Heading 12.11" needs to be examined with reference to the relevant HSN Notes to Heading 12.11. There is a long list of products under these HSN Notes which say that all the listed products are included in Heading 12.11. One of the items figuring in this list of products in alphabetical order is : "Long pepper (Piper longum) : (roots and underground stems)." Conspicuously, only roots and underground stems of "Long Pepper" are seen included in the above item. Fruit (berry) of "Long Pepper" stands excluded from the above item, which would go to show that fruit of "Long Pepper is a product excluded from Heading 12.11. The learned counsel has argued that, as the above list of products is not exhaustive, it cannot be said that fruit of "Long Pepper" is not included in Heading 12.ll. The same argument was rejected by this Tribunal in Ganesh International's case (supra) by observing thus :

"True, it is not exhaustive in so far as the plants are concerned, but it is exhaustive, in so far as the products of the plants mentioned therein are concerned. We notice that the list mentions fruits of some other plants and not of long pepper. It is for this reason we consider that the entry 'others' under Chapter Heading 12.11 of the Customs Tariff may not be referring to fruits of long pepper".

We have no reason to take a different view. Thirdly, the Tribunal's unchallenged finding in the case of Ganesh International that the fruit of Long Pepper is generally used as a condiment is binding on them. Therefore, ultimately, the fact remains that fruit of "Long Pepper" is outside the ambit of the expression, "other products of Heading 12.11", and consequently it cannot be held that the commodity in question should be excluded from Chapter 9 of the First Schedule to the Customs Tariff Act by virtue of Chapter Note 2 ibid. The goods in question can only be classified under SH 0904.11 under heading 09.04 of the First Schedule to the Customs Tariff Act for the period of dispute.

10.6 The learned counsel for M/s. Ganesh International and M/s. Gau-tam Overseas has heavily relied on Saurashtra Chemicals (supra) and a few other decisions in support of his argument that Note 2 to Chapter 9 should be given overriding effect on the relevant headings. "Overriding effect" does not mean that the scope of the Chapter Note can be widened. We have already examined the scope of the Chapter Note and have found that fruit of "Long Pepper" remains outside its scope. Had it been within the ambit of the expression "other products of Heading 12.11", we would have given full effect to the Chapter Note while classifying the subject goods in the Tariff Schedule. Hence the reliance placed by the learned counsel on Saurashtra Chemicals (supra) and other decisions does not improve the case of the appellants.

10.7 As rightly pointed out by the learned SDR, M/s. Ganesh Interna-tional, one of the appellants before us, accepted the Tribunal's decision reported in 2004 (169) ELT 284. The Tribunal's reasoning recorded therein is perforce applicable to the instant case. That the fruit of "Long Pepper" is not a product classifiable under Heading 12.11 of the Tariff Schedule and that it is generally used as a condiment classifiable under Heading 09.04 of the said Schedule are clear findings of this Tribunal in the said case of Ganesh International and the same, having been accepted by the party, are binding on them. In this context, one decision cited by the SDR is relevant and the same is CCE, Bangalore v. Bal Pharma Ltd. [2010-TIOL-74-SC-CX = 2010(09)LCX0012 Eq 2010 (259) ELT 0010 (S.C.)]. In that case, the Hon'ble Supreme Court refused to entertain the department's appeal against the Tribunal's order on a valuation issue, after noting that the department had not challenged an earlier decision of the Tribunal on the same issue (in another as-sessee's case), which was followed by the Tribunal in the case of Bal Pharma Ltd. In the instant case of Ganesh International, the Revenue can legitimately claim support from the view taken by the Apex Court and argue that Ganesh International is bound by 2004 (169) ELT 284 on the classification issue.

10.8 As it cannot be said that, in the shift from 6 digit scheme to 8 digit scheme of classification of goods, there was any significant change of law warranting exclusion of "Long Pepper" from Chapter 9 of the Tariff Schedule, the goods imported by all the appellants prior to 1-3-2003 are liable to be classified in the same way identical goods imported by M/s. Ganesh International after 1-3-2003 was classified by this Tribunal vide 2004 (169) ELT 284. Accordingly, we hold that the goods imported by the appellants should be classified under SH 0904.11 of the Tariff Schedule as claimed by the Revenue. The issue is held in favour of the Revenue.

11. Issue No. (Hi) :

11.1 This issue arises in Appeal No. C/1191/06 filed by M/s. Radha V. Company. This appellant imported 2 consignments, described as "Pippali" and classified under SH 1211.90, in September and November 2002. The goods were assessed to duty on the basis of the importer's declaration and the duty so assessed in terms of SH 1211.90 was debited from DEPB scrips produced by the importer. The show-cause notice in this case was issued on 20-12-2005 i.e. after more than 3 years from the date of clearance of the goods. This show-cause notice alleged that the appellant had deliberately misdeclared "Long Pepper" as "Pippali" and classified the same under SH 1211.90 instead of SH 0904.11 with intention to evade payment of appropriate amount of duty of Customs. On this basis, the show-cause notice invoked the extended period of limitation under the proviso to sub-section (1) of Section 28 of the Customs Act for recovery of differential duty with interest.

11.2 The appellant has contended that, as all the relevant facts were known to the department, the extended period of limitation was not invocable. In this connection, they have relied on Collector v. Chemphar Drugs & Liniments -1989(02)LCX0024 Eq 1989 (040) ELT 0276 (S.C.) and Pahwa Chemicals Pvt. Ltd. v. Commissioner - 2005(09)LCX0031 Eq 2005 (189) ELT 0257 (S.C). It is submitted that they had described the goods as "Pippali" and classified the same under SH 1211.90 on the reasonable belief that it was a crude drug especially when the Custom House had been allowing similar consignments to be cleared under this Tariff entry on the basis of the Assistant Drugs Controller's certification that the item was "crude drug". It is also submitted that the payments of differential duty made by them subsequently were under compulsion by SIIB (investigating agency) and the same were made 'under protest'. In this connection, it has also been claimed that the proprietor was forced to make involuntary statements under Section 108 of the Customs Act to the effect that "Pippali" was classifiable under Chapter 9 and not under Chapter 12.

11.3 The learned counsel for the appellant submitted that, as classification of goods was a function of the department, the appellant could not be al-leged to have misclassified the goods imported by them. In any case, according to the counsel, nothing was suppressed by the appellant with intent to evade payment of duty. The goods was described and classified in the Bills of Entry on the basis of bona fide belief that it was a crude drug as certified by the Assistant Drugs Controller in the case of Ganesh International. Therefore, he argued that the extended period of limitation was not applicable to the case.

11.4 The learned SDR reiterated the relevant findings of the original au-thority and the appellate authority. He pointed out that the appellant chose to describe the goods are "Pippali" in Sanskrit, instead of "Long Pepper" in English with a view to classifying the item under SH 1211.90 and clearing it on payment of duty at lower rate than what was applicable to "Long Pepper" classifiable under SH 0904.11. It was also submitted that the proprietor, in this statement under Section 108 of the Customs Act, clearly admitted the classifiability of the goods under SH 0904.11. In the circumstances, the extended period of limitation was rightly invoked for recovery of differential duty from the appellant.
11.5 We have carefully considered the submissions. The appellant has submitted that, before their importation, other importers were also importing the same commodity by describing it as "Pippali" in their Bills of Entry and that the Custom House had assessed those Bills of Entry on the basis of the Assistant Drugs Controller's Certificate wherein the goods was certified to be "crude drug" and its release was recommended. These averments contained in the memo of appeal are found to be consistent with the statement dated 11-12-2002 given by the proprietor of Radha V. Company under Section 108 of the Customs Act, wherein Shri Biharilal G. Ghura (proprietor) stated thus : "I come to know that "Pippali" was being cleared under 1211.90 CTH by some other parties, before my clearance, that is why we also imported and cleared the consignments of "Pippali" under CTH 1211.90". The appellant has also submitted that they paid differential duty on the goods 'under protest' pending final settlement of the dispute. We note that Shri Biharilal G. Ghura, in his statement, stated inter alia that he was paying differential duty 'under protest'. He also stated likewise in subsequent letters dated 6-1-2003 and dated 13-1-2003 submitted to the Jt. Commissioner of Customs (SUB). However, neither in his statement dated 11-12-2002 nor in his letters did he state the reason for the 'protest'. On the other hand, his letter dated 13-1-2003 (which covered a payment of Rs. 1,25,000/- towards differential duty on the goods covered by Bill of Entry No. 296422 dated 23-9-2002) made an offer to pay the balance amount "earliest". His earlier letter dated 6-1-2003 to the Jt. Commissioner (which covered a payment of Rs. 1,00,000/- towards differential duty on the goods covered by Bill of Entry No. 296422 dated 23-9-2002) also offered to pay the balance amount "by January 2003 in equal instalment". In total, the appellant paid Rs. 2,25,000/- towards differential duty on the goods covered by Bill of Entry No. 296422 dated 23-9-2002. In respect of the goods covered by Bill of Entry No. 313143 dated 26-11-2002, the appellant paid the entire amount of differential duty of Rs. 3,71,079/- on 12-12-2002, but no "protest letter" was submitted in respect of this payment. We also find that no "protest" was recorded on any of the challans covering the above payments of duty. Though "protest letters" were filed in respect of the payments of instalments of differential duty Oil the gOOdS covered by Bills of Entry No. 296422 dated 23-9-2002, none of these letters stated the reason for the 'protest'. The proprietor did not state any reason for protest in his statement dated 11-12-2002 either. In the circumstances, we are constrained to hold that the "protest" of the appellant is of no consequence insofar as the invocation of extended period of limitation is concerned.

11.6 Nevertheless, the fact remains that the appellant's plea of limitation against the demand of differential duty on the goods covered by the 2 Bills of Entry was not considered by the lower appellate authority. The learned Commissioner ought to have examined on merits the contention of the party that they did not misdeclare the description of the goods for monetary gain and hence the proviso to sub-section (1) of Section 28 of the Customs Act was not applicable. We, therefore, remit the issue of limitation to the lower appellate authority for a speaking order, thereon. It goes without saying that, for the extended period of limitation to be invoked in the "case, it has to be established that the appellant misdeclared the description of the goods in the Bills of Entry with intent to evade payment of the differential duty. The issue relating to confiscation and penalty are also left open for the Commissioner's fresh decision.

10. Issue No. (iv):

12.1 This issue is involved in Appeal No. C/1049/2007 filed by M/s. Radha V. Company. The learned counsel for the appellant submitted that, where the goods were not available for confiscation, no redemption fine was liable to be imposed under Section 125 of the Customs Act. We heard the learned SDR also.

12.2 It is not in dispute that the goods imported by the appellant were allowed to be cleared on payment of duty based on their declaration, without any bond or other undertaking. Admittedly, when the order-in-original was passed by the Jt. Commissioner, the goods were not physically available for confiscation. On these facts, no redemption fine was liable to be imposed under Section 125 of the Act in lieu of confiscation of the goods. The legal position was settled by the Tribunal's Larger Bench in the case of Shiv Kripa Ispat Pvt. Ltd. v. Commissioner [2008(09)LCX0305 Eq 2009 (235) ELT 0623 (Tri-LB)]. The adjudicating authority was right in refraining from imposing redemption fine. Therefore, the order of the Commissioner (Appeals) allowing the Revenue's appeal by way of remand and directing the lower authority to determine the quantum of fine has to be set aside. In the result, the appeal of the assessee succeeds.

13.1 One issue which remains to be addressed in the cases of M/s. Ganesh International and M/s. Gautam Overseas is whether the goods imported by them are liable to confiscation under Section lll(m) of the Customs Act and, if so, whether the importers are liable to be penalized under Section 112 of the Act. These appellants have contended that they did not misdeclare the description of the goods. They described it, in their Bills of Entry, as "Pippali", which, accord ing to them, is the synonym in Sanskrit for "Long Pepper" in English. The learned Commissioner's relevant finding reads thus :

"In the instant case, the importers declared the description of the goods as "Pippali" in Sanskrit and in the normal course of trade the subject goods are referred as "Long Pepper" and not as "Pippali".

On this basis, he has held that the appellants resorted to misdeclaration of the goods thereby rendering the goods liable to confiscation under Section lll(m) and rendering themselves liable for penalty under Section 112 of the Customs Act.

13.2 It appears from the records that Shri Gopal B. Ahuja, partner ofGanesh International and authorized signatory of Gautam Overseas, had statedunder Section 108 of the Customs Act that "in Sanskrit, Long Pepper is called Pippali". The show-cause notice itself acknowledged this fact by noting that "Pippaliis a synonym for Long Pepper in Sanskrit language". In reply to the notice, the appellants submitted that "in fact the notice admits in clear terms that "Pippali" is a synonym for ''Long Pepper" and that the goods are in fact Long Pepper".

13.3 The learned counsel for the appellants has referred to literature on "piper longum" (Long Pepper) in this context also. 'THE INDIAN MATERIA MEDICA' gives the nomenclature as "Pippaii" in Sanskrit and "Long Pepper" in English. 'MEDICINAL PLANTS' by S.K. Jain also provides the Sanskrit name of J "Long Pepper" as "Pippaii". 'VEGETABLE DRUGS OF INDIA' by D. Sanyal and R. Ghose also states the Sanskrit name of "piper longum" as 'Pippaii'. The name of the commodity in Hindi is also seen as 'Pippaii' in this book. It is, therefore, not deniable that what is known in English as "Long Pepper" is known as 'Pippaii' in Sanskrit as well as in our national language. Therefore, we are of view that the description of Long Pepper as 'Pippaii' by these appellants in the Bills of Entry would not amount to 'misdeclaration' to attract Section lll(m) of the Customs Act and, consequently, no penalty can be imposed on these appellants under Section 112 of the Act. The Commissioner's order confiscating the goods and imposing penalties on the importers viz. Ganesh International and Gautam Overseas is, therefore, liable to be set aside.

14. Accordingly, it is ordered as follows :

(a) The goods imported by the appellants are classifiable under SH 0904.11 of the First Schedule to the Customs Tariff Act for the period of dispute;

(b) The demands of duty on M/s. Ganesh International and M/s. Gautam Overseas are upheld, but the penalties imposed on them are set aside;

(c) The redemption fine imposed by the Commissioner in lieu of con-fiscation of the goods covered by Ganesh International's Bill of Entry No. 315796 dated 5-12-2002 (live consignment) is set aside;

(d) Appeals, C/419 & 420/2003, stand disposed of as above;

(e) Appeal No. C/1049/2007 of M/s. Radha V. Company is allowed;

(f) Appeal No. C/1191/2006 of M/s. Radha V. Company is dismissed on the classification issue and allowed by way of remand on other issues;

(g) Miscellaneous applications also stand disposed of.

(Pronounced in Court on 9-6-2011)

Equivalent 2012 (278) ELT.72 (Tri. - Mumbai)