2026-VIL-813-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of imported integrated drive generator and starter generator - The appellant imported integrated drive generator and starter generator for use in turboprop/turbofan engines of aircraft - Department classified the goods under CTH 8511 while the appellant claimed classification under CTH 8501 – HELD - The subject goods are classifiable under CTH 8501 as they are electrical generators used in conjunction with turboprop/turbofan engines, which are gas turbine engines and not spark-ignition or compression ignition internal combustion engines covered under CTH 8511. CTH 8501 covers all electric generators, whereas CTH 8511 covers only those generators used in conjunction with spark-ignition or compression ignition internal combustion engines. The finding of the Department that CTH 8511 covers "internal combustion engines of any kind" and therefore the goods are classifiable under CTH 8511 is incorrect, as the term "any kind" in CTH 8511 refers to the internal design of the internal combustion engine, i.e. piston type or other types, and not to all types of internal combustion engines including gas turbine engines - Further, the extended period of limitation under section 28(4) of the Customs Act could not have been invoked as mere misclassification by the importer does not mean that the duty was short paid with an intention to evade payment. Consequently, penalty under section 114A of the Customs Act is also not imposable. The penalty imposed on the CHA under section 117 of the Customs Act is also not sustainable as the CHA acted as per the instructions of the importer - The impugned orders are set aside and the appeals are allowed - Invocation of extended period of limitation - The department invoked the extended period of limitation under section 28(4) of the Customs Act on the ground that the importer had short-paid the duty by misclassifying the goods – HELD - Mere misclassification by the importer would not mean that the duty was short paid with an intention to evade payment. The classification adopted by the importer, even if ultimately found to be incorrect, would not mean that the import by misclassifying the goods was with an intention to evade payment of duty. In the present case, the classification adopted by the appellant has been found to be correct. Therefore, the extended period of limitation was not correctly invoked - Imposition of penalty on CHA - The department imposed a penalty on the customs house agent under section 117 of the Customs Act on the ground that uniformity was not maintained by it in the classification of the goods while declaring the same in the Bills of Entry – HELD - The role of a customs house agent is confined to making entries on the basis of the documents provided by the importer and to facilitate proper filing of such documents. The customs house agent acted as per the instructions of the importer. Therefore, the penalty under section 117 of the Customs Act could not have been imposed upon the customs house agent.
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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