The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that the benefits of exemption notification cannot be denied when documents show the import of coffee beans. Since the Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, the CESTAT set aside the impugned order and allowed the appeals by way of remand.
The appellant M/s. Vidya Herbs Private Limited filed Bill of Entry No.3989986 dated 31.12.2022 for clearance of ‘Indonesia Robusta coffee beans 70/75’ availing the benefit of Notification No.52/2003-Customs dated 22.07.2003. Samples were drawn by the customs and it was found that the imported goods were Coffee Husk/Bits and not Robusta coffee beans as was declared by the appellant.
It was also noticed that the goods were being cleared and the unit price was USD 1685 per Metric Ton, while the contemporaneous price was USD 1800-1900 per Metric Ton. Since the goods were declared as Robusta coffee beans and found to be Coffee Husk, they were liable for confiscation under section 111(f)(l)(m) and (o) of the Customs Act, 1962 and therefore, the benefit of Notification No.52/2003 was denied. The goods were also reclassified and the goods were confiscated allowing them to be redeemed on payment of a redemption fine of Rs.1,00,000/- along with a penalty under Section 114A. The appellant is in appeal against this impugned order.
The appellant submitted that the impugned order is based on the assumption that the goods imported are Coffee Husk/Bits classifiable under 0901 9010. Further, the Commissioner holds that the goods declared do not match the description given in the procurement certificate and denies them the benefit of Notification No.52/2003. Indonesia Robusta coffee beans were classified under Chapter Heading 0901 1145 and CTH 0901 1149 claiming a ‘nil’ rate of customs duty under Notification No.52/2003 dated 31.03.2003. It is admitted that the Central Coffee Research Institute, Bangalore confirmed that the husk content is around 71% and the coffee bean is 14.3% in the consignment imported by them.
It was submitted that the goods were declared as ‘Indonesia Robusta coffee beans’ and the procurement certificate issued by the Export Promotion Cell also described the goods as ‘Indonesia Robusta coffee beans’ but the examination report found them to be coffee beans with husk and without husk.
It was claimed that the literal interpretation of the import policy has to be taken to promote the activities of EOU and the importer can be authorised to import any raw material to meet the export requirement and in the present situation, even if the goods are considered as coffee husk/bits it is legally permitted to import subject to fulfilment of Condition 2A and the General Exemption No.69 of Notification No. 52/2003.
The appellant is a 100% EOU and regular importer of coffee beans which are required for the production and export of instant coffee. The appellant was availing the benefit of Notification No.52/2003 Cus. dated 22.07.2003. As per the Notification, the appellant is eligible for the exemption provided subject to conditions laid down therein are satisfied and one of the conditions is that the importer should be authorised by the Development Commissioner to establish the unit for the purposes specified in clauses (a) to (e) of clause (1) of the Notification.
A two-member bench comprising of Mr P A. Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that there is no doubt that the Bill of Entry describes the goods as ‘Indonesia robusta coffee beans’ and the Indonesian Agricultural Quarantine Agency also declared the goods as Robusta coffee beans, however, on examination it was found that the goods contained 71% coffee husk and the remaining rejected defective beans, thus described as coffee husk/bits as certified by the Bangalore Coffee Board Laboratory.
It was held that it is for the concerned authority under Special Economic Zone to consider the request of the EOU to import raw materials suitable for manufacture of export products and to ensure fulfilment of export obligations as per the norms issued from time to time and accordingly, remanded the matter to allow the appellant to produce amended procurement certificate from the concerned authorities under Rule 5(1)(a) of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.
Since the Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, the CESTAT set aside the impugned order and allowed the appeals by way of remand.
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