2026-VIL-797-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification of imported goods as "Cold Heading Quality Alloy Steel Wire in Coils" under CTH 7229 or 7227 - Whether the imported goods are classifiable under CTH 7229 as alloy steel wire or under CTH 7227 as wire rods – HELD - The imported goods are correctly classifiable under CTH 7229 as alloy steel wire. The goods have undergone spheroidized annealing and cold drawing processes which fundamentally alters the microstructure and mechanical properties of the steel, characteristic of finished wire used in cold heading applications. The distinction between wire rods and wire is clearly recognized in the HSN explanatory notes to Chapter 72, where wire rods are hot-rolled semi-finished products whereas wire is obtained by drawing rods through dies - Further, the BIS certification issued to the supplier described the product as steel wire. The department failed to produce any technical evidence demonstrating that the imported goods are hot-rolled wire rods rather than cold drawn wire. Accordingly, the department's order which had classified the goods under CTH 7227 and denied the benefit of the applicable exemption notification, is set aside – The appeal is allowed - Entitlement to exemption under Notification No. 152/2009-Cus - Whether the appellant is entitled to the benefit of Notification No. 152/2009-Cus – HELD - Since the Tribunal has held that the imported goods are correctly classifiable under CTH 7229, the denial of exemption and the demand of differential duty along with interest cannot be sustained. Once the assessee satisfies the conditions prescribed in the notification, the benefit thereof cannot be denied, and where the foundation of a demand fails, the entire demand must necessarily fail - Confiscation, limitation and penalties - The proposals relating to confiscation, penalties under Sections 112(a) and 114AA arise from the allegation of misclassification and wrongful availment of exemption – HELD - Since the primary allegation of misclassification itself fails, the confiscation of the goods and the penalties imposed cannot be sustained. The Tribunal also noted that there is no material on record to establish suppression, misdeclaration or wilful misstatement on the part of the appellant, and consequently the invocation of the extended period of limitation would not be sustainable.
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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