2025-VIL-165-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of organic chemicals named Mixed Xylene Isomers, Extended period of limitation, Penalties - Commissioner of Customs (Port) reclassifying their imported goods under CTH 27073000 instead of CTH 29024400 adopted by the appellants - Demand of differential customs duty along with interest and penalties - Whether the imported goods are correctly classifiable under CTH 29024400 as "Mixed Xylene Isomers" or should be reclassified under CTH 27073000 as alleged by the Department – HELD - as per the definition of 'Isomers' in chemistry, Ethyl Benzene, which formed part of the imported solvent, is an Isomer of Xylene as it has the same molecular formula of C8H10 as the other Xylene Isomers. The test report submitted by the appellants clearly indicated that the imported goods contained more than 95% by weight of all Xylene Isomers, including Ethyl Benzene, and hence the classification under CTH 29024400 adopted by the appellants is correct and sustainable – Further, the classification of similar goods under CTH 29024400 by domestic manufacturer was accepted by the authorities. Accordingly, the reclassification of the goods under CTH 27073000 and the consequent demands of differential customs duty are set aside - the allegation of mis-declaration against the appellants is not sustained, and the suppression of facts with intention to evade customs duty has not been established. Accordingly, the demands of differential duty with interest based on the extended period of limitation and the penalties imposed on the appellants are set aside – The appeals are allowed - Whether the extended period of limitation under Section 28(4) of the Customs Act was correctly invoked by the department to demand differential duty from 2011 onwards – HELD - The appellants have been classifying the goods under CTH 29024400 since 2011 and no issues were raised when the warehousing Bills of Entry were filed. Therefore, the appellants did not suppress any information and the extended period of limitation under Section 28(4) was not correctly invoked. Accordingly, the demands of differential duty with interest based on the extended period of limitation is set aside
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