2025-VIL-846-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification of imported goods, Penalty, Extended period of limitation – Appellant is engaged in the business of manufacturing 'Nickel Cadmium Batteries' and had imported 'Nickel Hydroxide powder' from various countries - Appellant classified the imported goods under Chapter Heading 2825 4000 corresponding to 'Nickel Oxides and Hydroxides' - Whether the imported goods are correctly classifiable under Chapter Heading 2825 4000, as declared by the appellant - HELD - The Tribunal relied on its earlier decision in the case of SAFT India Private Limited, wherein it was held that the product "Nickel Hydroxide" is a separate chemically defined compound containing Cobalt Hydroxide and Graphite, which are added to enhance the conductivity. Following the same rationale, the Tribunal held that the appellant's classification of the imported goods under Chapter Heading 2825 4000 is incorrect, and the goods are appropriately classifiable under Chapter Heading 38249900 as a chemical product or preparation of chemical and allied industries not elsewhere specified or included. Consequently, the appellant is not eligible for the benefit of the Notification No. 50/2017-Cus. dated 30.06.2017 - The classification of the imported goods under Chapter Heading 38249900 is upheld, and the demand of duty along with interest is confirmed. However, the imposition of fine, penalty, and the invocation of the extended period of limitation are set aside - The appeal is partly allowed - Whether the imposition of fine and penalty is justified – HELD - The issue involved is a bonafide interpretation of the Customs Tariff Act and the General Rules of Interpretation, and there is no evidence of any mala fide intention or motive on the part of the appellant in adopting the classification or claiming the benefit of the Notification. Relying on the decisions in Whiteline Chemicals v. Commissioner of Central Excise, Surat and Vadilal Industries Ltd. v. Commissioner of Central Excise, Ahmedabad, the Tribunal held that the imposition of fine and penalty is not justified in the present case - Whether the extended period of limitation can be invoked – HELD - The extended period of limitation cannot be invoked, as the issue involved is a bonafide interpretation of the Customs Tariff Act and the General Rules of Interpretation. The demand, if any, can be justified only for the normal period.
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