2024-VIL-1345-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification various goods imported for manufacture of automobiles, Preferential Tariff, Provisional Assessment, Confiscation, Penalty - Classification of various parts and accessories imported by the appellants for the manufacture of passenger motor cars - eligibility for preferential tariff treatment under a bilateral free trade agreement - Premature finalization of classification of provisionally assessed goods - Confiscation and imposition of redemption fine and penalty - Whether the classification of the goods pertaining to provisionally assessed BE’s has been done without the authority of law - - HELD - the classification of the provisionally assessed goods cannot be finalized in a piece-meal manner - the fiinalisation of classification of provisionally assessed BE’s without concluding the dutiability of the imported goods is not proper in law - the imported ECU items, which were cleared through provisionally assessed Bills of Entry have been decided prematurely by the impugned order. The fiinalisation of classification of provisionally assessed BE’s by piece-meal penal proceedings without concluding the dutiability of the imported goods is not proper in law and is set aside - The classification of the said goods can be done at the time of finalizing the provisional assessment, without being prejudiced by the findings in the impugned order - The impugned order is partly allowed - Whether it is legal and proper on the part of the AA in not confiscating and imposing a redemption fine in respect of the impugned goods provisionally assessed and cleared under a bond and in not imposing a penalty on the assessee – HELD - The appeal filed by revenue pertaining to the confiscation of goods provisionally assessed under a bond and confiscation / imposition of redemption fine on the goods and a penalty on the assessee, fails - Whether the impugned goods are eligible for benefit of concessional rate of BCD, based on the COO Certificate as per a Bilateral Free-Trade Agreements (FTA), even after reclassification and hence no demand of duty is sustainable – HELD - all impugned goods covered by a COO Certificate, as required by the conditions of the relevant notification, under which exemption is claimed, are eligible for preferential rate of duty irrespective of the subsequent change in classification, if any - Whether the redetermination of classification of Oil Control Valve (OCV) Assembly is legal and proper – HELD - The department has not been able to discharge their burden of proof on the merits of classification of Oil Control Valves under CTH 8409.9111 / 8409.99911 (depending upon the type of engine) and thus appellant classification of the goods under CTH 8481.8090 cannot be disturbed - Whether the re-determination of classification of the other 13 imported items i.e. Vacuum Assembly; Water Pump Assembly; Cap Sealing; Case Assembly Timing Chain; Nut Flange; Nut Washer; Oil Seal; V-Ribbed Belt; Junction Box; Piston and Piston Assembly; Connecting Rod Assembly; Camshaft Assembly; PIO AVN Audio is legal and proper – HELD - The re-determination of classification of the 13 items imported i.e. Vacuum Assembly; Water Pump Assembly; Cap Sealing; Case Assembly Timing Chain; Nut Flange; Nut Washer; Oil Seal; V-Ribbed Belt; Junction Box; Piston and Piston Assembly; Connecting Rod Assembly; Camshaft Assembly & PIO AVN Audio, has been consented to before the Original Authority in writing as suggested in the SCN and cannot be resiled at this stage. Hence in the case of the stated goods the classification remains as determined in the impugned order and the appeal in this regard is rejected - As regards Camshaft Assembly, HMIL have accepted the classification as per the impugned order and the goods are eligible for exemption since the COO Certificate at 6 digit level covers the imported goods - Whether the imported PIO AVN Audio is appropriately classifiable under CTH 8526 9190 and is eligible for the benefit of concessional rate of BCD @ Nil in terms of Serial No.1389 (I) of Notification No. 46/2011 Customs dated 01.06.2011, instead of claimed Serial No.1390 (I) – HELD - PIO AVN Audio were imported from Vietnam and availed the BCD exemption benefit @ Nil in terms of Customs Notification No. 46/2011, whereas, in the SCN, it was alleged that the goods were imported from Republic of Korea and had wrongly availed the BCD exemption benefit @ Nil in terms of Customs Notification No. 152/2009. However, the wrong quoting of a notification benefit in the SCN is a minor error and is not fatal to the OIO. Hence appellant plea for quashing this part of the impugned order is rejected – Appellant has not disputed that PIO AVN Audio are appropriately classifiable under CTH 8526.9190. They are eligible for the benefit of concessional rate of BCD @ Nil in terms of Serial No.1389 (I) of Notification No. 46/2011 Customs dated 01/06/2011, instead of claimed Serial No.1390 (I) claimed by them and hence merits to be granted. However, even without reference to this legal issue, which is acceptable, once the COO Certificate covers the imported goods and is not challenged and modified as per the procedure established by the Rules of 2009, the benefit of concessional duty as per the cited notification cannot be denied - Whether the re-determination of classification of the imported Computer & Bracket Assembly / Electronic Control Unit (ECU) is legal and proper. – HELD - - The classification proposed for Electronic Control Unit (ECU) as per the SCN was under CTH 8537 whereas the impugned order has finalised the classification under CTH 8708 9090 which is beyond the allegations and proposal made in the SCN - The Department has not discharged the burden of proof to show that the ECU, is taxable in the manner claimed by them under CTH 8708 9090 and hence the classification as declared by appellant must prevail. The goods are hence eligible for benefit of Notification No. 46/2011, dated 01/06/2011 as claimed - Whether the “relevant date” as defined under Section 28 of CA 1962, is the date of clearance of the imported ECU, whereby part of the demand is outside the ambit of two years normal period pertaining to goods covered by Order-in-Original and is unsustainable – HELD - the ‘relevant date’ has to be understood as per section 28(3) read with Explanation-1 (d) to section 28(11) under of the Customs Act 1962. This being so the “relevant date” cannot begin from the date of clearance of the imported ECU’s and the two years period must be calculated from the date of receipt of information under sub-section (2) of section 28 - Where there is no suppression of facts or willful misstatement of facts hence demand and confirmation of duty liability beyond the normal period of 2 years from the date of import as per Order-in-Original is unsustainable and no fine on the goods or penalty on the individual can be imposed – HELD - It is settled law that the extended period cannot be invoked when the case involves a genuine interpretative issue, which is not merely an excuse given by appellant, who has short paid duty due to a change in classification of a few of the imported goods as above. Some of the disputed classification of goods, covered by the impugned orders, have been found by us to be correctly classified. Demand and confirmation of duty liability, if any, beyond the normal period of 2 years from the relevant date, is not sustainable - In the absence of any suppression of facts / wilful mis-statement of facts, the impugned goods imported and cleared with or without a bond cannot be subject to confiscation, hence no penalty and redemption fine can be imposed on the ground of wrong classification.
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