COMMISSIONER OF CUSTOMS, CALCUTTAversusG. C. JAIN AND ANR.

                        (2011] 8 S.C.R. 798


A          COMMISSIONER OF CUSTOMS, CALCUTTA
                                 v.
                        G. C. JAIN AND ANR.
                (Civil Appeal Nos.6334-35 of 2003)
                           JULY 4, 2011
B
            [DR. MUKUNDAKAM SHARMA AND ANIL
                       R. DAVE, JJ.]

        Customs Act, 1962:
c
         Classification - Adhesives - Demand of duty on import
    of Butyl Acrylate Monomer(BAM) - Invocation of extended
    period of limitation - Respondents imported consignments of
    BAM and cleared them as adhesives against advanced
0   licenses without payment of duty - Commissioner held that
    BAM was not adhesive and the benefit of the advance
    licences was not available to the respondents and accordingly·
    confirmed the demand of duty by invoking the extended and
    longer period of limitation on the ground that respondents had
E   mis-declared the product in question - Respondents filed
    appeal before the Tribunal which was allowed - Whether
    BAM, which attained adhesive properties on polymerisation,
    could be said to be an adhesive for the purpose of allowing
    duty free clearances against advance license issued under
    the DEEG scheme - Held: The word "adhesive" was
F   mentioned in the ex-Bond BIE inasmuch as the appellant
    sought release of goods under advance licences allowing
    adhesive as duty free import - The goods were chemically
    tested in the Customs House and were cleared after
    satisfaction of the proper officer that BAM is an adhesive -
G   There was no question of suppression of any fact before
    customs authorities because no fact was concealed - Also,
    in the technical literature given by the manufacturer, use of
    the product has been shown as adhesives - BAM, an Acrylate
    Ester, can be polymerised by using water to prepare the
H                                  798
 COMMISSIONER OF CUSTOMS, CALCUTTA v. G. C. 799
               JAIN AND ANR.

  'aqueous emulsion dispersion' which is used in the 'Leather A
  Industry' as a 'Coating or Binder' to be an Adhesive - No
  reason why BAM which on aqueous dispersion can be used
  as a binder in 'Leather Industry', should be denied the benefit
· of considering the same as adhesives - When the licences
  produced entitled the Respondents to clear the ex-bond B
  goods free of duty, there were no reasons for them to have
  mis-declared the values since the goods were duty free - No
  a/legation that the licences produced will not cover the
  quantity of values, even after the alleged loading of values
  as declared - Therefore, decision of the Tribunal upheld - c
  Also the demand is hit by the bar of /imitation inasmuch as
  the appellant had cleared the goods in question after declaring
  the same in the bills of entries and giving correct classification
  of the same - Availing of benefit of a notification, which the
  Revenue subsequently formed an opinion was not available,
                                                                     D
  cannot lead to the charge of mis-declaration or mis-statement,
  etc. and even if an importer has wrongly claimed his benefit
 ,of the exemption, it is for the department to find out the correct
  legal position and to allow or disallow the same - In the instant
  case the appellant had declared the goods as Butyl Acrylate
  Monomer with correct classification of the same and· the word E
  'adhesive' was added in the ex-bond bill as per the appellant's
  understanding that BAM is an adhesive - In these
  circumstances it was for the Revenue to check whether BAM
  was covered by the expression adhesive or not and if even
  after drawing of samples they allowed the clearances to be F
  effective as an adhesive, the appellant cannot be held
  responsible for the same and subsequently, if the Revenue
  ~as changed their opinion as regards the adhesive character
  bf BAM, extended period cannot be invoked against them -
   4s such the demand of duty in respect of the consignments G
  is also barred by limitation.

     Words and Phrases - Interpretation of - Held: Words and
 :Jxpressions, unless defined in the statute have to be
 fonstrued in the sense in which persons dealing with them         H
    800     SUPREME COURT .REPORTS·           (2011) 8 S.C.R.


A   understand i.e. as per trade and understanding and usage.

      The Respondents imported consignments of Butyl
  Acrylate Monomer (BAM) and cleared them as adhesives
  against advanced licenses without payment of duty. The
  appellant-Revenue issued show cause notice to the
8
  respondents proposing confirmation of demand of duty,
  as also confiscation of the imported product and
  Imposition of personal penalties alleging that the product
  imported by the respondents was defined organic
C chemical and was not an adhesive and exemption had
  been wrongly claimed by the respondents.

         During the adjudication proceedings the
    Respondents took a specific stand that the B-AM in
    question is a liquid which becomes adhesive on
D   polymerisation upon coming into contact with light and
    heat; that to prevent spontaneous polymerisation BAM
    is normally stabilised by sowe inhibitor and that since
    BAM polymerises readily without much requirement of
    processing and as after polymerisation the same shows
E   adhesive.properties it should be treated as adhesive only.
    They also placed reliance on the manufacturer's printed
    literature and contended that it is clear that BAM is used
    as an adhesive. The Respondents also pleaded their
    case on the point of time-bar by submitting that they had
F   declared the goods in the bill of entry correctly and the
    clearances were given by the customs authorities after
    drawing samples and satisfying themselves that the
    product was an adhesive and squarely covered by the
    advance licences. As such they submitted that the longer
G   period of limitation could not be invoked against them
    inasmuch as there was no mis-declaration on the part of
    the Respondents. However, the Commissioner held that
    BAM was not adhesive and the benefit of the advance
    licences was not available to the respondents and
    accordingly confirmed the demand of duty by invoking
H
 COMMISSIONER OF CUSTOMS, CALCUTIA v. G. C. 801
    .          JAIN AND ANR.

the extended and longer period of limitation on the          A
ground that the Respondents had mis-declared the
product in question. Aggrieved, the Respondents filed
appeal before the Appellate Tribunal which was a!lowed.
     In the instant appeals, the question which arose for    8
 consideration was whether BAM can be said to be an
 adhesive for the purpose of allowing the duty free
 clearances against advance license issued under the
 DEEC scheme.
     Dismissing the appeals, the Court                       c
         HELD:1. Goods in packed condition are of no use. It
    can only be used when it is opened and put to use. In
    the instant case, it is admitted in the Show Cause that
    end-use of BAM is adhesive in leather industry. However, o
    a distinction is sought to be made in the present case that
    until monomer becomes polymer, it is not adhesive. It is
    alleged that in Monomer form, BAM is not adhesive. By
    putting such an interpretation, an attempt has been made ·
    by the appellant to divest BAM from the coverage of E
    adhesive. However, it is well settled that the words and
  .expressions, unless defined in the statute have to be
,J, construed in the sense in which persons dealing with
1
   jthem understand i.e. as per trade and understanding and
   'usage. The word· "adhesive" was mentioned in the ex- F
    Bond B/E inasmuch as the appellant sought release of
    goods under advance licences allowing adhesive as duty
    free import. In any event goods were chemically tested
    in the Customs House and goods were cleared after
    satisfaction of the proper officer that BAM is an adhesive.
    The department was very much conscious that goods G
    were claimed as an adhesive and they were so satisfied
    after examination of the goods and deliberation made in
    this regard. The Customs authorities cleared the goods
    with consciousness and knowing fully well that BAM is
    an adhesive. There is no question of suppression of any H
    802      SUPREME COURT REPORTS                [2011) 8 S.C.R.


A fact before customs authorities because no fact was
  concealed. Each of the consignments were tested and
  chemically examined. [Paras 14, 15, 16) [810-C-H; 811-A-
  B]

8     2. Also, acceptance of advance licences for clearance
  of BAM as adhesive stands absolute and it cannot be
  repudiated as licences have been debited by customs
  authorities. Assessment orders already made cannot be
  disturbed in the facts and circumstances of the case.
C [Para 17) [811-E]

          3. It is undisputed that the imported chemical is in its
    Monomer form and becomes an adhesive on self-
    polymerisation. It is the case of both the sides that the
    Monomer form becomes polymer form of the chemical
D   suited to be used as adhesives, when it comes in contact
    with nature. It is only that in some cases where bulk
    polymerisation is required, extra heat i.e. more than the
    heat provided by the nature is required to increase the
    process of polymerisation, as has been opined in the
E   opinions of experts brought on record by the Revenue.
    Also, in the technical literature given by the manufacturer,
    use of the product has been shown as adhesives. Even
    though the Revenue has disputed that the said literature
    produced by the Respondents is not correct and is
F   manipulated inasmuch as the same is different than the
    manufacturer of identical product in India, however, no
    concrete evidence to that effect has been led by the
    Revenue. The Tribunal has given a finding that the
    literature produced by the Respondents is of the Kerean
G   manufacturer and is given in English language as well as
    Korean language and there is no reason to doubt the
    veracity of the said literature. Inasmuch, as the
    manufacturers themselves have shown the use of Butyl
    Acrylate as adhesive as well as textile binders, there are
    no reasons to take a different view. [Paras 18, 19)
H
COMMISSIONER OF CUSTOMS, CALCUTTA v. G. C. 803
              JAIN AND ANR.

    4 .. Under the DEEC scheme, the word 'adhesives'           A
has not been defined. Under the exemption notification,
the word •materials' has been defined from which it is
clear that the •materials' permissible, are not only raw
materials but are also intermediates for such raw
materials, which are required for manufacture of export        B
products specified in the licences, which in this cases are
'Leather Industry' prod.ucts. The term used as 'material'
required for manufacture of export products would
encompass such entities also which are not only directly
used or usable as such in the manufacturing processes          c
but also which could be used with same processing. [Para
20] [812-F-H; 813-A-B]
     5. It is apparent and can be concluded that BAM,
which is an Acrylate Ester, can be polymerised by using
water to prepare the 'aqueous emulsion dispersion'             D
which is used in the 'Leather Industry' as a 'Coating or
Binder' to be an Adhesive. The aqueous preparation of
this emulsion would not require any elaborate use of
technology. There is no reason why BAM which on
aqueous dispersion, even if classified under 2916.12, can      E
be used as a binder in 'Leather Industry', should be
denied the benefit of considering the same as adhesives.
(Para 21] (813-E-F]       ·

   Pioneer Embroideries Ltd v. Commissioner of Customs,        F
Mumbai 2004 (178) E.L.T 933 (tri.) - held inapplicable.

    Encyclopaedia of Chemical Technology, 4th Edition,
published by John Wiley and Sons - referred to.

    6. When it is found that the licences produced entitle     G
the Respondent to clear the ex-bond goods free of duty,
there are no reasons for them to have mis-declared the
values since the goods are duty free . .There appears no
incentive to do so. There is no allegation that the licences
produced will not cover the quantity of values, even after     H
    804    . SUPREME COURT REPORTS            [2011) 8 S.C.R.


A the alleged loading of values as declared. Therefore, the
  decision of the Tribunal is upheld. [Para 23] [814-A-B]
        7. Also the demand is hit by the bar of limitation
    inasmuch as the appellant had cleared the goods in
    question after declaring the same in the bills of entries
8
    and giving correct classification of the same. Availing of
    benefit of a notification, which the Revenue
    subsequently formed an opinion was not available,
    cannot lead to the charge of mis-declaration or mis-
    statement, etc. and even if an importer has wrongly
C   claimed his benefit of the exemption, it Is for the
    department to find out the correct legal position and to
    allow or disallow the same. In the Instant case the
    appellant had declared the goods as Butyl Acrylate
    Monomer with correct classification of the same and the
D   word 'adhesive' was added In the ex-bond bill as per the
    appellant's understanding that BAM is an adhesive. In
    these circumstances it was for the Revenue to check
    whether BAM was covered by the expression adhesive
    or not and if even after drawing of samples they have
E   allowed the clearances to be effective as an adhesives
    appellant cannot be held responsible for the same and
    subsequently, if the Revenue has changed their opinion
    as regards the adhesive cha·racter of BAM, extended
    period cannot be invoked against them. As such the
F   demand of duty in respect of the consignments is also
    barred by limitation. [Para 24] [814-C-G]
                        Case Law Reference:
     2004 (178) E.L.T 933 (tri.) held inapplicablePara 22
G
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    6334-6335 of 2003.

      From the Judgment & Order dated 17.12.2002 of the
  Customs Excise and Gold (Control) Appellate Tribunal, at
H Kolkata, in Appeal No. CRV-75 & 74 of 1999.
 COMMISSIONER. OF CUSTOMS, CALCUTIA v. G. C. 805
                JAIN AND ANR.

                                 WITH                                A
 C.A. No. 1757 of 2004.

     Arijit Prasad, M. Khairati, B.K. Prasad, Anil Katiyar for the
 Appellant.
                                                                     B
      S.K. Bagaria, V. Shekher, Pijush K. Roy, G. Ramakrishna
 Prasad, Sudhir Kumar Mehta, Puneet Jain, Trishna Mohan,
 Pratibha Jain for the Respondents.
      DR. MUKUNDAKAM SHARMA, J. 1. These appeals are
 directed against the judgment and order dated 17.02.2002            C
 passed by the Customs, Excise and Gold (Control) Appellate
 Tribunal, Eastern Bench, Kolkata in appeal Nos. CRV-75 and
 74of1999, whereby the Tribunal had allowed the appeal of the
 Respondents and set aside the order passed by the
 Commissioner of Customs on the ground that the Butyl Acrylate       D
 Monomer i.e. the chemical imported by the Respondents can
 safely be held to be an adhesive and was covered by the
 advance licences produces by the Respondents.
       2. As per the facts on record the Respondents, M/s.
  Sanghvi Overseas imported 14 consignments of Butyl Acrylate        E
  Monomer (hereinafter referred to as 'BAM') between April and
· December, 1997 and cleared the· same against advanced
  licenses by availing the benefit of customs Notification Nos.
  203/92 and 79/95, without payment of duty. Another
  consignment of BAM was cleared by the Respondents under            F
  bill of entry dated 06.03.1998 and thereafter one more
  consignment was imported. The last two consignments were
   Narehoused and not cleared by the authorities.
       3. In all these consignments of BAM, the Respondents          G
 declared the product as Butyl Acrylate Monomer and claimed
 '.he classification under heading 2916.12. The assessments
 Nere sought by the Respondents as adhesives under the OEEC
 Jcense.

      4. Enquiries were initiated by the Revenue against the         H
    806     SUPREME COURT REPORTS                [2011] 8 S.C.R.


A Respondents on the belief that the product imported by the I
  Respondents was defined organic chemical and was not an
  adhesive. The Revenue/appellant took a stand that. the
  advanced licences covering imports of adhesives submitted by
  the Respondents for clearance of the consignments under
B DEEC scheme, availing the benefit of customs notification
  were not applicable in the matter of clearance of the goods in
  question inasmuch as the said licences were for impo~ of .
  adhesives and the product imported was not adhesive.
  Accordingly, searches were conducted in the offices of the
c Respondents and their statements were recorded. The
  customs clearing agent was also interrogated and efforts were
  made to find out as to whether the product in question was
  used as a bonding agent or not. Shri R.K. Jain, in his statement,
  recorded during such investigations, deposed that the product
0 was used as a bonding agent and on polymerisation the same
  become an adhesive.
        5. The Revenue also drew the samples and sent it forl
  testing. The Revenue also sought the opinion of the various
  experts as also the persons of the trade dealing in identical
E items. On the basis of the material collected during the
  investigation the Revenue formed an opinion that the BAM was
  not adhesive but was one of the raw materials for adhesive
  formations. As such. Revenue was of the opinion that the
  exemption had been·wrongly claimed by the Respondents. In
F addition, the Revenue ~lso disputed the value of the goods in
  question.           ·
       6. Accordingly, on the above basis the Respondents were
  served with a show cause notice proposing confirmation of
  demand of duty, as also confiscation of the imported product
G and imposition of personal penalties upon the various persons.
       7. During the adjudication proceedings the Respondents
  took a specific stand that the BAM in question is a liquid which
  becomes adhesive on polymerisation upon coming into contact
H with light and heat. It was argued on behalf of the Respondents
COMMISSIONER OF CUSTOMS, CALCUTTA v. G. C. 807
 JAIN AND ANR. [DR. MUKUNDAKAM SHARMA, J.]

that to prevent spontaneous polymerisation BAM is normally A
stabilised by some inhibitor and that since BAM polymerises
readily wit~out much requirement of processing and as after
polymerisation the same shows adhesive properties it should
be treated as adhesive only. They also placed reliance on the
manufacturer's printed literature and contended that it is clear B
that BAM is used as an adhesive. The Respondents clarified
that BAM does not possess any adhesive properties in the
Monomer form, but the same is an adhesive in the polymer
form, which process is undertaken naturally when the Monomer
form comes in contact with heat and light. The Respondents c
pleaded that it is not feasible and practicable to import the item
in polymer form as after polymerisation, the product
immediately becomes an adhesive which does not has much
shelf-life. The Respondents also pleaded their case on the point
of time-bar by submitting that they had decJared the goods in. D
the bill of entry correctly and the clearances were given by the
customs authorities after drawing samples and satisfying
themselves that the product was an adhesive and squarely
covered by the advance licences. Their advance licences were
accordingly debited by the customs authorities. As such they
submitted that the longer period of limitation could not be E
invoked against them inasmuch as there was no mis-
declaration on the part of the Respondents.
      8. The said show cause notice culminated into the
impugned order passed by the Commissioner, whereby, it was          F
held that BAM was not adhesive and the benefit of the advance
licences and the notification in question was not available to
[he importer. Accordingly, the demand of duty was confirmed
-,y invoking the extended and longer period of limitation in
·espect of 14 bills of entries on the ground that the Respondents   G
1ad mis-declared the product in question.
     9. It was also held by the Commissioner that the goods
ue liable to confiscation, but inasmuch as the same were not
ivailable, ·no redemption fine had been imposed by him. Penalty
>f equivalent amount was imposed upon M/s. Sanghvi                  H
     808      SUPREME COURT REPORTS              [2011) 8 S.C.R.

.A   Overs~as. The goods covered     by the bills of entry dated
     08.05.1997 and 19.03.1998 which were under seizure by the
  Revenue were confiscated with an option to the Respondents
  to redeem the same on payment of redemption fine of Rs.
  6,00,0001- (Rupees six lakhs). Further penalty of Rs. 3,00,000/
B - (Rupees three lakhs) was imposed upon M/s. Sanghvi
  Overseas in relation to the importation of the goods under the
  above two bills of entries. Penalty of Rs. 65,00,000/- (Rupees
  sixty-five lakhs) was imposed on the second Respondent
  Shri R.K. Jain on the findings that he was the main person
c behind the imports which led to evasion of huge amount of
  customs duty and was an adviser to the importers. It was also
  observed that the evidence on record showed his active and
  financial involvement in the matter.
           10. Aggrieved by the abovementioned order, the
D Respondents filed an appeal before the Central Excise Gold
  (Appellate) Tribunal, Kolkata submitting that the BAM in
  question can be classified as an adhesive and the
  Respondents had rightly claimed clearance of the goods on the
  basis of the advanced licences which allowed adhesive to be
E cleared duty free. It was pointed out that the Revenue also drew
  samples before clearance of the goods and it is only thereafter
  that the clearances were permitted by them. The Tribunal by its
  order dated 17.02.2003 allowed the appeals of the
  Respondents stating that BAM can be rightly classified as an
F adhesive and therefore, the Respondents had rightfully claimed
  the clearance of goods on the basis of advanced licences.
  Hence, the present Special Leave Petitions have been
  preferred by the Appellant.
           11. The learned counsel appearing for the Appellant
G submitted before us that the Tribunal made a fundamental error
  in ignoring the fact that the BAM was required to undergo a
  further industrial process to become an adhesive, and thus the
  imported item under no circumstances could be classified as
  an adhesive. The contention is that the imported chemical is a
H Monomer organic chemical, which is one of the raw materials
  COMMISSIONER OF CUSTOMS, CALCUTTA v. G. C. 809
   JAIN AND ANR. [DR. MUKUNDAKAM SHARMA, J.]

 used in the manufacture of adhesives, the opinion which has            A
 been substantiated by various experts from the field of Industry.
 The appellant has alleged that the imported material i.e. BAM
 (inhibited}, is a colourless liquid, lighter than water, monomer
 organic chemical having wide use in paint, textile and leather
 industry as raw material and can in no way be compared with            B
 other ployurathene adhesives of well known brands. It was
 further contended that in the product literature submitted before
 the Tribunal, the portion specifying that BAM was used as raw
 material for Adhesive Industry was erased by the Respondent
 Importers. He also refuted the Respondents' claim that BAM             c
 in the Monomer form on coming in mere contact with heat and
 light undergoes self-polymerization and au contraire it was
 submitted that it requires a specific industrial process.
      12. The next contention was that the Tribunal also failed
   to take into account thaf the difference in value between            D
   acrylates and products obtained after polymerization is one and
   a half times to three times which means polymerization involves
   complicated technical and industrial processes. It has been
   contended that various experts in the fields from industry as well
   as renowned institutions have categorically opined that BAM          E
 . is not an adhesive. It was also argued that taking into account
   the product lite~ature of Mis LG Chemicals Ltd, a manufacturer
   of the imported product, which was part of the appeal petition,
   revealed that BAM was a raw material for adhesive. It was
   claimed that BAM in inhibited state is quite different from          F
./ product:obtained after emulsion polymerisation through
 \ industrial process. Thus the form in which the goods were
   imported could not be termed as an adhesive.
      13. The learned counsel for the Respondents refuted all
 the contentions raised by the Appellant and submitted that             G
 'BAM' is used as adhesive in leather industry and that during
 transportation and storage it is kept in a manner which would
Jrestrict it from self polymerisation. It was thus submitted that
1when the chemical BAM is packed, an inhibitor is used to keep
 the goods in storage condition and that as and when the                H
    810      SUPREME COURT REPORTS                   (2011) 8 S.C.R.


A container is opened and the chemical comes into contact with
  air, light and heat at room temperature, the BAM starts self
  polymerization by itself and suo moto and gets the properties
  of adhesive. He also pointed out the fact that there is no dispute
  with regard to the fact that the BAM when polymerised becomes
B adhesive ..
       14. Dispute in short is whether BAM can be said to be an
  adhesive for the purpose of allowing the duty free clearances
  against advance license issued under the DEEC scheme.
  Goods in packed condition are of no use. It can only be used
C when it is opened and put to use. We are, therefore, to consider
  as to whether for all practical purposes BAM is an adhesive. It
  is admitted in the Show Cause that end-use of BAM is
  adhesive in leather industry. However, a distinction·is sought
  to be made in the present case that until monomer becomes
D polymer, it is not adhesive. It is alleged that in Monomer form,
  BAM is not adhesive. By putting such an interpretation, an
  attempt has been made by the appellant to divest BAM from
  the coverage of adhesive. The issue is whether the requirement
  of opening the container, allowing BAM to contact with air, light
E and heat and even putting a catalyst could detract from its being I
  an adhesive.                            .
          15. Admittedly, the expression "adhesive" is not defined
    in the Act. It is now well settled that the words and expressions,
    unless defined in the statute have to be construed in the sense
F   in which persons dealing with them understand i.e. as per trade
    and understanding and usage.
       16. The word "adhesive" was mentioned in the ex-Bond
  B/E inasmuch as the appellant sought release of goods under
G advance licences allowing adhesive as duty free import. In any
  event goods were chemically tested in the Customs House and
  goods were cleared after satisfaction of the proper officer that
  BAM is an adhesive. The department was very much conscious
  that goods were claimed as an adhesive and they were so
H satisfied after examination of the goods and deliberation made
COMMISSIONER OF CUSTOMS, CALCUTTA v. G. C. 811
 JAIN AND ANR. [DR. MUKUNDAKAM SHARMA, J.]

in this regard. Therefore, the 14 consignments referred to in      A
para 4 of the Show Cause Notice were cleared on the basis
of advance licence under Customs Notification No. 203/92-
Cus. or 79/95-Cus. Customs authorities cleared the goods with
consciousness and knowing fully well that BAM is an adhesive.
There is no question of suppression of any fact before customs     B
authorities because no fact was concealed. Each of the
consignments were tested and chemically examined.
     17. Therefore, the counsel appearing for the Respondents
submitted before us that the allegation made by the customs
authorities in the Show Cause Notice cannot be allowed to C
stand on two counts. Firstly, the goods imported were very much
covered by the licence and secondly, assuming, though denying
that the goods were not covered under the licence even then
customs authorities cannot change their stand inasmuch as
after debiting of the licence, the position becomes irreversible. · D
Licence cannot be restored to its original position. The valid
order of clearances made under Section 47 of the Customs Act
cannot be disturbed because of the irreversible situation.
Acceptance of advance licences for clearance of BAM as
adhesive stands absolute and it cannot be repudiated as E
licences have been debited by customs authorities.
Assessment orders already made cannot be disturbed in the
facts and circumstances of the case. These are important
factors and areas which are required to be kept in mind while
deciding the is.sue falling for our consideration.                  F
      18. So the undisputed picture which emerges is that the
imported chemical is in its Monomer form and becomes an
adhesive on self-polymerisation. The Respondents' case is that
the self-polymerisation, which is noth"ing but increase in
molecular weight takes place on the chemical coming out of         G
the container. The question is that whether the solution in its
Monomer form can be considered as an adhesive or not.
According to the Respondents it is not practical and feasible
 :o import the product in its polymerised ~orm and the same is
 1lways stored in its Monomer form. In fact inhibitors are added   H
    812      SUPREME COURT REPORTS                  [2011) 8 S.C.R.

A to avoid self-polymerisation of the product during storage. It is
  the case of both the sides "that the Monomer form becomes
  polymer form of the chemical suited to be used as adhesives,
  when it comes in contact with nature. It is only that in some
  cases where bulk polymerisation is required, extra heat i.e.
B more than the heat provided by the nature is required to
  increase the process of polymerisation, as has been opined
  in the opinions of experts brought on record by the Revenue.
  As such the Tribunal was of the view that the Butyl Acrylate
  Monomer, which undergoes self-polymerisation on coming in
c contact with the atmosphere, can be safely held to be an
  adhesive and covered by the various advance licences in
  question.
        19. It is also noted that in the technical literature given by
  the manufacturer, use of the product has been shown as
D adhesives. Even though the Revenue has disputed that the said
  literature produced by the Respondents is not correct and is
  manipulated inasmuch' as the same is different than the
  manufacturer of identical product in India, however, no concrete
  evidence to that effect has been led by the Revenue. The
E Tribunal has given a finding that the literature produced by the
  Respondents is of the Korean manufacturer and is given in
  English language as well as Korean language and there is no
  reason to doubt the veracity of the said literature. Inasmuch, as
  the manufacturers themselves have shown the use of Butyl
F Acrylate as adhesive as well as textile binders, we see no
  reasons to take a different view.
        20. Under the DEEC scheme, the word 'adhesives' has
    not been defined. Under exemption notification, the word
    'materials' ha~ been defined as under: -
G         "{a) raw materials, components, intermediates,
          consumables, computer software and parts required for
          manufacture of export products"
  Therefore 'materials' permissible, are not only raw materials but
H are also intermediates for such raw materials, which are
COMMISSIONER OF CUSTOMS, CALCUTTA v. G. C. 813
 JAIN AND ANR. [DR. MUKUNDAKAM SHARMA, J.]

required for manufacture of export products specified in th~        A
licences, which in this cases are 'Leather Industry' products.
The term used as 'material' required for manufacture of export
products would encompass such entities also which are not only
directly used or usable as such in the manufacturing processes
but also which could be used with same processing.                  B
     21. From the Encyclopaedia of Chemical Technology 4th
Edition published by John Wiley and Sons, it is found for
Acrylate Esters as in the present case it prescribes :-
    "Emulsion Polymerization: Emulsion polymerization is            c
    the most important industrial method for the preparation
    of acrylic polymers. The principal markets for aqueous
    dispersion polymers made by emulsion polymerization
    of acrylic esters are the print, paper, adhesives, textile,
    floor polish, and leather industries, where they are used       D
    principally as coatings or binders. Copolymers of either
    ethyl acrylate or butyl acrylate with methyl methacrylate
    are most common. (Vol. 1, page 32Br
From this authoritative Book, it is apparent and can be
concluded, that BAM, which is an Acrylate Ester, can be             E
polymerised by using water to prepare the 'aqueous emulsion
dispersion' which is used in the 'Leather Industry' as a 'Coating
or Binder' to be an Adhesive. The aqueous preparation of this
emulsion would not require any elaborate use of technology.
There is no reason why BAM which on aqueous dispersion,             F
even if classified under 2916.12, can be used as a binder in
'Leather Industry' as per this authoritative Encyclopedia on
Technology, should be denied the benefit of considering the
same as adhesives.
       22. The appellant has placed reliance on the judgment G
;Jassed by the CEGAT, Mumbai in the matter of Pioneer
Embroideries Ltd v. commissioner of Customs, Mumbai 2004
(178) E.L.T 933 (tri.). We have gone through the said judgment,
however, the same is not applicable to the present case botb
 'Jn facts and law.            ·                                ·H
        814      SUPREME COURT REPORTS                  (2011) 8 S.C.R.


    A      23. When it is found that the licences produced entitle the
      Respondent to clear the ex-bond goods free of duty, there are
      no reasons for them to have mis-declared the values since the
      goods are duty free. There appears no incentive to do so.
      There is no allegation that the licences produced will not cover
    B the quantity of values, even after the alleged loading of values
      as declared. Therefore, this court upholds the decision of the
      Tribunal.
             24. It is also observed that the demand is hit by the bar of
       limitation inasmuch as the appellant had cleared the goods in
    C question after declaring the same in the bills of entries and
       giving correct classification of the same. Availing of benefit of
       a notification, which the Revenue subsequently formed an
       opinion was not available, cannot lead to the charge of mis-
       declaration or mis-statement, etc. and even if an importer has
    D wrongly claimed his benefit of the exemption, it is for the
       department to find out the correct legal position and to allow
       or disallow the same. In the instant case the appellant had
       declared the goods as Butyl Acrylate Monomer with correct
       classification of the same and the word 'adhesive' was added
    E in the ex-bond bill as per the appellant's understanding that
       BAM is an adhesive. In these circumstances it was for the
       Revenue to check whether BAM was covered by the expression
       adhesive or not and if even after drawing of samples they have
       allowed the clearances to be effective as an adhesives
    F appellant cannot be held responsible for the same and
       subsequently, if the Revenue has changed their opinion as
       regards the adhesive character of BAM, extended period
       cannot be invoked against them. As such we are of the view
       that the demand of duty in respect of 14 consignments is also
    G. barred by limitation.
             25. Therefore, the present appeals are dismissed but
        without any orders as to costs.

        B.B.B.                                     Appeals dismissed.
    H


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