2010 (12) TMI 897 - AT - Customs

Tribunal denies waiver request for duty on imported goods; upholds classification decision

The Tribunal rejected the appellant's request for waiver of pre-deposit and stay of recovery regarding the duty demanded for imported goods, including CNC ... Waiver of pre-deposit - classification - application software was intended to operate the hardware incorporating the operating software and this combination was intended to operate the Relieving Lathe Machine. - The first item was classified under Heading 84.58 and the other two items under Heading 84.71 of the First Schedule to the Customs Tariff Act. The assessing authority wanted to classify items (ii) and (iii) also under 84.58 as part of Relieving Lathe Machine. - held that:- Conspicuously, the description of these goods is prefixed with “CNC”. Both sides have expanded this term into 'Computer Numerically Controlled'. - Prima facie, the Relieving Lathe Machine, whose description is prefixed as above is not capable of being manually operated. Apparently, it could be operated only with the accompaniments. The classification proposed by the assessing authority is, prima facie, correct - Considering the plea of financial hardships raised by the learned counsel, appellant directed to pre-deposit only a part of the duty amount Issues: Classification of imported goods under Customs Tariff Act, legality of demand of duty, financial hardships waiver of pre-deposit and stay of recovery.In this case, the appellant sought waiver of pre-deposit and stay of recovery regarding the duty demanded by lower authorities for goods imported, including CNC machines and related software and hardware. The dispute arose over the classification of items (ii) and (iii) under Heading 84.58 as part of the Relieving Lathe Machine. The appellant argued that the show-cause notice issued under Section 28 of the Customs Act was illegal without challenging the assessment. The counsel cited case law to support this argument. The appellant also claimed a strong case on merits, stating that the software and hardware were independent items and should be classified under Heading 84.71. Financial hardships were also raised as a plea.The Revenue contended that they were entitled to invoke Section 28 without modifying the assessment order, citing precedents to support their position. They argued that the software and hardware should be classified under Heading 84.58 based on Note 4 of Section XVI of the Customs Tariff Act. The Revenue claimed a strong case on merits as well. The counsel rebutted, distinguishing the present case from the cited precedents, emphasizing the absence of fraud.Upon careful consideration, the Tribunal rejected the preliminary objections and focused on the merits of the case. They found the lower authorities' decision on classification prima facie sustainable, noting that all items were imported as one consignment and the software was intended to operate the hardware for the Relieving Lathe Machine. The Tribunal upheld the proposed classification by the assessing authority. Considering the financial hardships, the Tribunal directed the appellant to pre-deposit a partial amount of the duty within a specified timeframe for waiver of pre-deposit and stay of recovery of the remaining duty amount.