Custom, Excise & Service Tax Tribunal Vidya Herbs Private Limited vs MangaloreCus on 30 June, 2023 Customs Appeal No.20146 of 2023 CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BANGALORE REGIONAL BENCH COURT NO. 2 Customs Appeal No. 20146 of 2023 [Arising out of OrderinOriginal No. MLRCUSTM000RS COM005202223 dated 01/02/2023 passed by the Commissioner Of Customs , Mangalore] M/s Vidya Herbs Private Limited Appellant(s) No.39/11, Amble Hoble, Aradavalli, Chikkamagaluru, Karnataka577101 VERSUS The Commissioner of Customs, MangaloreCUS New Customs House, Panambur, Respondent(s) Mangalore, Karnataka, 575010 Appearance: Mr. N.Anand, Advocate for the Appellant Mrs. D.S. Sangeetha, Authorised Representative for the Respondent HON'BLE MR. P.A. AUGUSTIAN, MEMBER (JUDICIAL) HON'BLE MR. PULLELA NAGESWARA RAO, MEMBER (TECHNICAL) Final Order No.20665/2023 Date of Hearing: 24/04/2023 Date of Decision: 30/06/2023 Per : P.A. AUGUSTIAN The appellant is a private limited company engaged in the business of manufacturing and export of Herbal Ayurvedic Extracts and is an 100% Export Oriented Undertaking under Cochin, Special Economic Zone Office, Bangalore. They have Page 1 of 8 Customs Appeal No.20146 of 2023 been accorded status of Three Star Export House and are also holding "Authorized Economic Operator MSME Certificate". 2. Learned Counsel for the appellant submitted that in compliance with the Rule 5 of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 appellant have imported "Vietnam Robusta Coffee" as raw material for their production. As per the Certificate of Quality and Weight issued by Nhat Quang Import Export Trading Company Limited, Vietnam goods are described as "Vietnam Robusta Coffee" and the quality analysis results of the samples drawn from 100% bags show moisture 13%, Husks 50% and Broken kernels 50%. On arrival of the shipment, the appellant filed a Bill of Entry No.3326993 dated 16.11.2022 with the relevant documents. The Customs officers on examination of the consignment found that the import consignment was "Coffee Husk/Bits" and not Robusta Coffee Beans and hence the goods were subjected to 100% examination. Thereafter samples were drawn and sent for test to Coffee Board, Bangalore. The Coffee Board has given the Test report stating that the goods are "Raw Coffee Hulled/ Peeled". Thereafter at the request of the appellant, issue of SCN was waived and appellant appeared before the Adjudication Authority. Page 2 of 8 Customs Appeal No.20146 of 2023 3. However, by alleging misdeclaration of the imported goods, the Adjudication Authority vide impugned order denied the benefit of exemption notification and confiscated the goods. Goods were allowed to be redeemed on payment of customs duty, fine and penalty. Aggrieved by the said order, the present appeal is filed. 4. Learned Counsel for the appellant draws our attention to relevant provision of Chapter 9, General Exemption No.69, Notification No. 52/2003Cus dated 31.03.2003, wherein all goods as specified in AnnexureI to the Notification are exempted from payment of customs duty subject to fulfillment of Condition No.2A. As per AnnexureI, raw materials required for production of goods are allowed for import. Learned Counsel for the appellant also draws our attention to test reports issued by Central Coffee Research Institute and submitted that out of huge import of raw material only 300 grams were drawn and based on the said quantity, it is alleged that the goods are consisting of 60.4% Coffee husk and other material as per the following table: Garbling Grade/Defect Weight (g) % Coffee Husk 184.8g 60.4% Blacks 13.5g 4.5% Bleached beans 14.4g 4.8% Insect damaged beans 4.2g 1.4% Page 3 of 8 Customs Appeal No.20146 of 2023 Spotted beans 4.2g 1.4% Immature beans 11.7g 4.0% Triages 55.5g 18.5% Extraneous matter 11.7g 5.0% 5. Learned Counsel for the appellant submitted that the finding re