2000(07)LCX0290

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

S/Shri Gowri Shankar, Member (T) and J.N. Srinivasa Murthy, Member (J)

NASIK BREEDING & RESEARCH FARM LTD.

Versus

COMMR. OF CUS., MUMBAI

Order No. 2394/2000-WZB/C-I, dated 8-7-2000 in Appeal No. C/1133/99-Bom.

Advocated By :   Shri H.C. Daruwala, Advocate, for the Appellant.

Shri V.K. Dahiya, JDR, for the Respondent.

[Order per : Gowri Shankar, Member (T)]. - The somewhat unusual facts leading to this appeal are these. The appellant imported two consignments of live day old chicks. It is a matter of fairly common knowledge that such chicks are imported by poultry farmers for being reared into layers i.e. hens which lay eggs and broilers i.e. chicken which will be brough shold for its meat. A bill of entry for each consignment was presented in advance prior to the arrival of the consignment and duty paid, no doubt to ensure that there would be as little delay as possible in clearing these chicks which, because of their young age are vulnerable. But that has precisely happened. Ninety five per cent of the chiks in one consignment and 90% in the other consignment died. The date of their death is in issue in this appeal. It is however a matter of record that postmortem examination was conducted on some of the dead chicks and the finding of the Deputy Superintendent, city and Harbour, Animal Husbandry and District Animal Husbandry Officer, Mumbai certifying the death due to suffocation and stress is dated 21-6-1997. Endorsement of this certificate by the Quarantine Officer, Animal Quarantine and Certification Service, Government of India, Mumbai is also dated 21-6-1997. The certificate dated 21-6-1997 issued by the Assistant Director, Regional Disease Control Unit, Animal Husbandry, Government of Maharashtra certifies the incineration of the day of chicks on that day.

2. The importer applies for refund of the dead chicks. The Assistant Commissioner in two separate orders rejected the claims for refund. She said that the Customs examination report has not certified any damage, loss or death of birds. It did not indicated that the chicks were found dead before being unloaded, during unloading or after their unloading and before their examination. They have neither been valued nor any joint survey in which Customs officers were associated carried out. She therefore held that the provisions of Section 22 of the Act, would not apply. She further found that it has not been shown that the “damage” to imported goods had not been shown as not being due to any wilful act or negligence or default on the part of the importer, its employee or its agent. She therefore found that sufficient care has not been taken in transporting these chicks and consideration and care required not accorded. She excluded the applicability of Section 23 for the reason that the goods were neither lost nor abandoned or destroyed any time before clearance of the goods.

3. The importer appealed these orders. The Commissioner (Appeals) found that the dead chicks had been assessed to duty under Heading 1-5-2000 was not in order and it should have been assessed under tariff heading 5-11-1999 (This heading is for animal products not elsewhere specified or included and dead animals of chapter 1 or 3, unfit for human consumption). Hence this appeal.

4. We have heard detailed argument form both sides on various issues involving this appeal.

5. The departmental representative emphasises as does the Assistant Commissioner in her order that it is not known when exactly the birds died. We agree that the precise point at which the birds die has not been established. It is however difficult to resist the conclusion that they died before they were cleared from the Customs. The certificate of the Deputy Superintendent, City and Harbour, Animal Husbandry, Government of Maharashtra of the death of birds and the countersignature by the Quarantine Officer, Government of India are both dated 21-6-1997. The Quarantine Officer of the Animal Quarantine and Certification Service, Government of India, Mumbai posted at the Cargo complex to carry out the function relating to import of animals and birds endorsed the statement before the goods are cleared from the Customs and released to the importer. The examination report of the Customs officer itself refers to the Animal Quarantine and Animal Husbandry department certificate. It is not anybody’s contention that more than one certificate which was issued. The dead chicks in any case could not have been removed for being burnt without the knowledge and permission of the Customs Department. The certificate dated 21-6-1997 of the Quarantine Officer of the Government of India on the bill of entry says that “there is no objection from the animal quarantine angle to clear dead and lived bird.” All this, in our view, establishes that the birds died at some point before they were cleared from the Customs.

6. This does not answer the question as to whether when the birds when imported into India were dead or alive. The Commissioner (Appeals), in his order, concludes that they were dead. He does not specifically say so. But this is an inevitable conclusion that we have to reach when they are to be classifiable under Heading 05.11. This heading, as we have noted, included dead animals. The classification of the goods cannot be changed because of the change in their constitution or nature after their importation. The goods have been classified on the basis of the condition at the time of importation. The HSN Explanatory Notes to Section I which covers both chapter and claimed by the appellant, and chapter 5 provides that animals which die during transport are classifiable under various headings of chapter 2. In other cases they are classifiable under Heading 05.11. The classification by the Commissioner (Appeals) therefore has to be confirmed.

7. In that case, what is to be seen is the valuation and duty payable, if any, on these goods. It is not disputed that the dead birds were not deliberately imported by the importer in order to make use of them. They were, as we have indicated, imported precisely because they were live and were to be reared. As we have noted, they were destroyed by being burnt according to the orders of the animal husbandry, as it poses danger to health. Therefore, they had no value and no duty was payable on them.

8. We therefore, allow the appeal on this ground, and direct that the refund be paid to the appellant to the extent of the duty paid on dead birds.

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Equivalent 2000 (121) ELT 534 (Tribunal)