SL CoA | Correctness of HS Code for ‘thalsukiri’ (palm sugar) yet to be decided; order based on incorrect HS Code quashed

Court of Appeal of Sri Lanka: This appeal was filed before a Bench of Mahinda Samayawardhena, J., to quash an order where petitioner was denied a fair hearing.

The facts of the case were that petitioner had imported a consignment of Ayurvedic products including “Thalsukiri” (Palm Sugar). He had not given false description of goods in the Cusdec and Commercial Invoices presented for the Customs for clearing the goods but still respondents alleged that in order to avoid payment of cess petitioner had fraudulently declared an incorrect HS Code in the Cusdec for which an order penalizing him in a sum of Rs 2.5 million under amended Section 47 of the Customs Ordinance, 1869 was passed. Hence, this application was filed to quash the aforementioned order and refund of the amount.

It was a common ground that there was no scope for specified Commodity Classification for Thalsukiri. Thus, petitioner imported Thalsukiri under “other” category. Later, Government had introduced a cess on the commodities falling into “other” category due to which petitioner started importing Thalsukiri under the category “Maple Sugar and Maple Syrup” until the petitioner was, for the first time, accused for committing fraud by declaring an incorrect Commodity Classification Code for Thalsukiri in the Cusdec. Respondent submitted that petitioner has, one time before the introduction of cess, imported Thalsukiri under the HS Code of “other” category hence, it was the correct HS Code. Court of appeal rejected the aforementioned submission.

Court of appeal observed that correct HS Code for Thalsukiri is yet to be decided.  Hence, impugned order was erroneous. It was also observed that the petitioner was not given a fair hearing before the impugned order was made. Therefore, impugned order was quashed. [K. Balasubramaniam v. Chulananda Perera, CASE NO. CA/WRIT/175/2016, dated 16-01-2019]

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