2024-VIL-388-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs – Section 111(m) of Customs Act, 1962 – Customs Tariff Act, 1975 – Import of nickel hydroxide compound – Classification – Appellant imported Compound of Nickel Hydroxide by classified it under CTH 28254000 – Department viewed that Appellant had mis-classified goods claiming undue benefit of Nil rate of Basic Customs Duty (BCD) under Notification No.50/2017 – Department issued show cause notice proposing to reclassify goods under CTH 38259900 @7.5% BCD and to demand differential duty – Adjudicating Authority confirmed classification of imported goods under CTH 38249000 and demand of differential duty and ordered for confiscation of goods – Whether goods imported by Appellant is classifiable under CTH 28254000 as declared by Appellant or under CTH 38249900 as classified by Revenue – HELD – Appellant has adopted classification under CTH 28254000 and claimed Nil rate of Customs duty under Notification No.50/2017 – Chapter Note 28 excludes any mixture of separate chemical elements or separate chemically defined compounds – It is an admitted fact that imported product is primarily containing Nickel Hydroxide with minor proportions of Cobalt Hydroxide and Graphite – Nickel Hydroxide is a compound, Cobalt Hydroxide is also a separate compound and Graphite is an element/metal – Imported product being a mixture of compounds goes out of Chapter 28 of 1975 Act – Chapter 38 deals with Miscellaneous Chemical Products – As imported product consists of mixture of Nickel Hydroxide, Cobalt Hydroxide and Graphite, it is more appropriately classifiable under CTH 38249900 as a chemical product – Imported product is classifiable under CTH 38249900 and not under CTH 28254000 as adopted by Appellant – Consequently, Appellant is not eligible for benefit of Notification No.50/2017 – Demand of duty along with interest is confirmed – Appeal partly allowed - Confiscation of goods – Imposition of penalty – Whether order of confiscation and imposition of redemption fine and penalty is justified or not in facts and circumstances of this case – HELD – Main contention of Appellant is that there is no wilful mis-declaration rendering imported goods liable for confiscation under Section 111(m) of the Act – Merely claiming benefit of exemption in Bills of Entry does not amount to suppression/mis-declaration on part of Appellant – Penalty cannot be imposed, as there was no intention to evade payment of duty – Order of confiscation and imposition of fine and penalty is not justified and ordered to be set aside.
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