2026-VIL-1355-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs – Classification of Facsimile Machines - Appellant imported Facsimile Machines and parts declaring goods under Customs Tariff Heading 8443 3260 as Facsimile machines capable of connecting to automatic data processing machine or to a network, claiming exemption under Notification No. 24/2005-Cus – Later on, the Dept took view that imported Facsimile Machines were not capable of connecting to network within meaning of Heading 8443 3260 but merited classification under Heading 8443 3970 – Dept issued notice proposing recovery of differential Customs Duty and imposition of penalties invoking extended period under Section 28(4) of Customs Act – Whether imported Facsimile Machines requiring external Analogue Telephone Adapter (ATA) device for network connectivity are classifiable under CTH 8443 3260 for machines capable of connecting to network or under CTH 8443 3970 for machines not so capable – HELD - Revenue failed to discharge burden of proving that imported Facsimile Machines merit classification under CTH 8443 3970. The Tariff employs expression capable of connecting and does not prescribe requirement of direct cable connection without external interface device – In modern information technology architecture, network connectivity is frequently achieved through routers, gateways, adapters, converters, wireless interfaces and other intermediary devices, such devices do not cease to be network-capable merely because connectivity is achieved through external interface. Department's own investigation records establish and acknowledge that imported machines can be networked through Analogue Telephone Adapter or similar interface devices, thereby admitting network capability - It is well-settled that classification under Customs Tariff must be determined primarily on basis of language employed in tariff itself and resort to HSN Explanatory notes permissible only as aid to interpretation where statutory language is ambiguous - Classification must ultimately be based upon actual characteristics of imported goods and not upon unduly restrictive reading of Explanatory material – Burden of establishing that goods fall within particular tariff entry lies upon Revenue and must be discharged by adducing satisfactory evidence and not by mere reinterpretation – The B/Es were filed declaring imported goods as Facsimile Machines under CTH 8443 3260, goods were examined by proper officers after physical verification. The classification was not mere self-assessment accepted mechanically but assessment undertaken after physical verification by Dept itself. The demand of differential duty, interest and penalties not sustainable – The impugned order is set aside and the appeal is allowed - Applicability of Extended Period of Limitation – HELD - Extended period under Section 28(4) of Customs Act can be invoked only where duty has not been levied or has been short levied by reason of collusion, wilful misstatement, suppression of facts or fraud requiring deliberate intent to evade payment of duty – Appellant disclosed goods as Facsimile machines, produced relevant invoices, catalogues and technical literature and claimed classification under tariff heading which according to it correctly described goods, such conduct wholly inconsistent with any allegation of fraud or deliberate suppression – Every material fact necessary for assessment was available before Department at time of import itself and Revenue has not pointed out any document that was concealed or false declaration made. The subsequent change of opinion on classification cannot by itself constitute suppression of facts or wilful misstatement – In the present case, the conditions precedent for invoking extended period is absent.
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