Order date – 07 December 2022

Facts –

• The Appellant, M/s. Sanstar Bio-Polymers Limited, is engaged in manufacturing of Starch, Modified Starch, Liquid Glucose, Malto Dextrine Mono Hydrate and High Maltose Corn Syrup and for manufacturing the said product their main raw materials were “Maize, Maize Starch, Tapioca Starch, Potato Starch, Modified Starches, HCI, Caustic Soda Lye, Soda Ash, Filtrate, Bentonite, Enzymes, Hypo Chloride and Sulphur etc.
• A show cause notice was issued on 30.12.2016 alleging that the appellant have wrongly declared its input as ‘Maize (Corn) Starch’ for ‘Liquid Glucose Concentrate’ exported by them as it was found during investigation that actual raw material used was ‘Maize’; that process of manufacturing does not at any stage use ‘Maize Starch’; at best it uses ‘Starch Slurry’ which is manufactured from ‘Maize’. Therefore, correct SION Entry is E76 under which appellant was entitled to import ‘Maize’ and not “Starch” as claimed by the appellant.

Issue –

• Whether the appellant rightly classified ‘Maize (corn) Starch’ to customs for claiming export benefit under DFIA scheme?

Order –

• The Tribunal observed that the case of department is that since ‘starch’ is more commercially viable input for imports, appellant has purposely classified its product under E22. The said ground is of no consequence. It is settled law that when a claim of an applicant under a beneficial scheme or exemption notification, qualifies under two conflicting entries, for having opted for one which is more beneficial to him would not amount to mis-declaration.
• Further, in absence of any investigation by customs as regards utilization of the said 7 DFIA licences; section 28AAA of the Act cannot be pressed into service. In the circumstances, customs would have no jurisdiction to invoke section 28AAA of the Act or to deny exemption from customs duties or any other benefit flowing from such subsisting license.
• Further held in the said decision of Axiom Cordages Ltd that when the assessment of shipping bills filed by the appellant has attained finality as department has not filed appeal against the same under section 128 of the Act; classification of goods cannot be questioned subsequently by the customs by way of issuance of show cause notice.
• Hence the appeal is allowed.