2026-VIL-955-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs: Tariff Classification of Alkyl Ketene Dimer (AKD Wax) – Appellant- importer imported organic chemical product from China and consistently classified it under Chapter 29 from October 2007 till July 2012, with all consignments being regularly cleared by Customs authorities - Department subsequently sought to reclassify the goods under Chapter 34 as wax preparations, alleging intentional misdeclaration to evade duty – HELD - On the basis of CRCL test report, HSN explanatory notes, waxy characteristics, dropping point, viscosity parameters and fatty acid composition, the imported product merits classification under Chapter Heading 34049090. However, since the goods were declared openly in all import documents, the B/E were regularly scrutinized by the department, samples were drawn and tested, and the classification under Chapter 29 had been consistently accepted over several years, the ingredients necessary for invocation of extended period under the proviso to Section 28 are not established. A mistaken or inconsistent practice followed earlier cannot prevent the Department from adopting correct classification subsequently once detailed examination and laboratory analysis revealed appropriate classification, but when the assessee had acted in good faith on the basis of departmental acceptance, the extended period cannot be invoked - While the reclassification is upheld on merits, the recovery of differential duty is restricted to the normal period under Section 28(1) of the Customs Act, 1962 along with applicable interest, and penalties and confiscation of cleared goods are set aside – The appeal is partly allowedrnrnPenalty under Section 112(a) of Customs Act, 1962 - The CHA and chief operating officer of the importer company were separately penalized under Section 112(a) for their alleged participation in preparation and filing of bills of entry containing incorrect description and classification – HELD - Mere reference to industrial application or end-use in bills of entry cannot amount to deliberate misdeclaration when the identity and nature of goods had been openly declared throughout. Since the classification under Chapter 29 had been consistently accepted by the department over several years and the dispute essentially relates to interpretation of competing tariff entries rather than deliberate suppression or fraudulent misdeclaration, no evidence establishes conscious knowledge, collusion or deliberate abetment on the part of the customs house agent or the chief operating officer - Customs House Agent and Chief Operating Officer cannot be penalized for alleged misstatement in bills of entry when no evidence establishes conscious knowledge, collusion or deliberate abetment on their part and the classification dispute essentially relates to interpretation of competing tariff entries.
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