2006 (11) TMI 372 - AT - Customs

Tribunal rules in favor of Shaf Broadcast on equipment classification dispute

SHAF BROADCAST PVT. LTD. Versus COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI

The Tribunal ruled in favor of M/s. Shaf Broadcast Pvt. Ltd. regarding the classification of imported goods, determining that the equipment should be ... Automatic data processing machines - Broadcasting equipments - Demand - Limitation Issues Involved:1. Classification of imported goods.2. Invocation of extended period of limitation.Summary:Issue 1: Classification of Imported GoodsThe primary issue in this case was the classification of certain imported equipment by M/s. Shaf Broadcast Pvt. Ltd. The appellants classified the goods under Heading 84.71 as automatic data processing machines, while the revenue classified them under Heading 85.43 as broadcasting equipment. The Tribunal found that the equipment used for non-linear editing of audio/video programs, computer graphics, and special effects should be classified as automatic data processing machines under Heading 84.71. The Tribunal emphasized that the end use of the equipment cannot be the basis for classification if the equipment satisfies the definition of automatic data processing machines as per Chapter Note 5A to Chapter 84. The Tribunal also referred to the HSN Explanatory Notes and interpretative rules, concluding that the goods should not be classified under the residuary Heading 85.43.Issue 2: Invocation of Extended Period of LimitationThe Tribunal addressed the issue of whether the extended period of limitation could be invoked. The period involved was from September 1998 to September 2002, with the show cause notice issued on May 17, 2003. The Commissioner had invoked the extended period, alleging that the appellants deliberately misclassified the goods to evade duty. However, the Tribunal found no misstatement or suppression of facts by the appellants, as the goods were appropriately described in the relevant documents. The Tribunal held that a claim of classification under a particular heading does not amount to suppression and that the Customs authorities, having allowed the clearance of the goods, could not attribute any suppression to the importer. Consequently, the demand was deemed barred by limitation.Conclusion:The Tribunal set aside the confirmation of the demand for duty and the imposition of personal penalties, allowing all the appeals with consequential relief to the appellants.