The court determined that Chilly Seeds sollten be classified under CTH 0904, rejecting the appellant's claims for classification under CTH 1209 based on statutory provisions and rules for interpretation.

JUSTICE DILIP GUPTA:

M/s. Nunhems India Pvt. Ltd., the appellant (formerly known as M/s Bayer Seeds Private Limited) has filed this appeal to assail the order dated 01.11.2016 passed by the Commissioner of Customs (Appeals), New Delhi, the Commissioner (Appeals) that rejects the appeal filed by the appellant against the order dated 13.06.2014 passed by the Additional Commissioner. This order of the Additional Commissioner treated the proceeding initiated by the show cause notice as concluded in terms of section 28(6)(ii) of the Customs Act 1962, the as the appellant had paid the demanded duty with interest and penalty @25% of duty in terms of section 28(5) of the .

2. The appellant is engaged in the business of import and trading of various seed varieties for vegetable crops. The appellant imported 32 consignments of Chilly Seeds through various Bills of Entry during the period from 01.09.2008 to 30.09.2013.

3. According to the appellant, the supplier prior to exportation of the goods in question, undertakes certain standard treatment on the seeds by applying chemicals and fertilizers on the seeds to ensure that the seeds are fit for sowing in the country of importation. The appellant further contends that such treatment makes the goods unfit for human consumption and the seeds can be used for sowing only. The seeds are imported in bulk and thereafter sold by the appellant to farmers in small packets containing 100-150 seeds.

4. The appellant classified the goods under Customs Tariff Heading, CTH 1209 on payment of 5% basic customs duty under Notification No. 21/2002-Customs dated 01.03.2002 and Notification 12/2012- Customs dated 17.03.2012, as the case may be, and paid nil rate of additional duty of customs, SAD by virtue of exemption under Notification No. 20/2006-Customs dated 01.03.2006/ Notification No. 21/2012-Customs dated 17.03.2012, the Exemption Notification, as the case may be.

5. The appellant got a summons dated 03.10.2013 from the Directorate of Revenue Intelligence, DRI to produce Bills of Entry, Invoices, Certificate of Origin, application made for import along with copy of import permit, for imports of ‘Coriander Seeds”, “Hot Pepper Seeds”, “Sweets Pepper Seeds” and “Chilly Seeds” were imported by the appellant and its sister/associate firms from 01.09.2008 till 03.10.2013. 6. The representative of the appellant appeared before the DRI Mumbai Zonal Unit on 11.10.2013. According to the appellant, during the said meeting, the DRI officer informed the appellant representative that the classification adopted by the appellant for the imported seeds was incorrect and so it had been evading SAD on the import of the seeds. The concerned officer also asked the appellant representative to furnish all the details associated with the import of the seeds by the appellant from 01.09.2008 to 30.09.2013. The appellant furnished the details by a letter dated 21.10.2013. The appellant claims that the DRI also directed the appellant to pay the differential duty along with interest.

7. The appellant submitted written submission dated 25.02.2014 in reply t