2012 (9) TMI 537 - AT - Customs

Tribunal allows duty demand under Section 28; penalties overturned for misclassification and duty evasion

GANESH INTERNATIONAL Versus COMMISSIONER OF CUSTOMS, MUMBAI

GANESH INTERNATIONAL Versus COMMISSIONER OF CUSTOMS, MUMBAI - 2012 (278) E.L.T. 72 (Tri. - Mumbai) Issues Involved:1. Whether duty short-levied can be demanded under Section 28 without revising the assessment under Section 129D.2. Classification of imported goods under SH 1211.90 or SH 0904.11.3. Whether the demand of duty on M/s. Radha V. Company is barred by limitation.4. Imposability of fine under Section 125 if goods are not available for confiscation.Issue-wise Detailed Analysis:Issue No. (i):The appellants contended that once goods are assessed under Section 17 and cleared under Section 47, any duty short-levied cannot be demanded under Section 28 without revising the assessment under Section 129D. They cited several cases to support their argument. However, the Tribunal, relying on the Supreme Court's ruling in *Jain Shudh Vanaspati Ltd.* and other cases, held that a show-cause notice under Section 28 can be issued for demanding duty short-levied even after goods are cleared under Section 47. The Tribunal concluded that the legal issue is settled in favor of the Revenue.Issue No. (ii):The appellants classified the imported goods as 'Pippali' under SH 1211.90, arguing it was primarily used in pharmacy. They cited various literature and certificates to support their claim. However, the Tribunal, referencing a previous decision in *Ganesh International* and analyzing the HSN Notes, concluded that 'Long Pepper' (Piper longum) is specifically covered under SH 0904.11. The Tribunal reasoned that the specific classification of 'Long Pepper' under SH 0904.11 takes precedence over the general classification under SH 1211.90. Thus, the goods were correctly classified under SH 0904.11 as claimed by the Revenue.Issue No. (iii):M/s. Radha V. Company argued that the demand of differential duty was time-barred as the show-cause notice was issued more than three years after the clearance of goods. They contended that there was no suppression of facts, and the goods were described based on a bona fide belief. The Tribunal found that the lower appellate authority did not consider the limitation plea and remitted the issue back for a fresh decision. It emphasized that the extended period of limitation applies only if it is established that the appellant misdeclared the goods with intent to evade duty.Issue No. (iv):The Tribunal addressed whether redemption fine can be imposed under Section 125 if the goods are not available for confiscation. It referred to the Larger Bench decision in *Shiv Kripa Ispat Pvt. Ltd.*, which held that no redemption fine is imposable if the goods are not physically available. Consequently, the Tribunal set aside the order of the Commissioner (Appeals) that directed the lower authority to determine the quantum of fine.Additional Issue:The Tribunal also considered whether the goods imported by M/s. Ganesh International and M/s. Gautam Overseas were liable to confiscation under Section 111(m) and whether penalties were imposable under Section 112. It concluded that describing 'Long Pepper' as 'Pippali' in the Bills of Entry did not constitute misdeclaration, as 'Pippali' is a recognized synonym for 'Long Pepper' in Sanskrit. Therefore, it set aside the penalties and confiscation orders against these appellants.Final Orders:1. Goods imported by the appellants are classifiable under SH 0904.11.2. Demands of duty on M/s. Ganesh International and M/s. Gautam Overseas are upheld, but penalties are set aside.3. Redemption fine imposed on Ganesh International is set aside.4. Appeal No. C/1049/2007 by M/s. Radha V. Company is allowed.5. Appeal No. C/1191/2006 by M/s. Radha V. Company is dismissed on the classification issue and remanded on other issues.6. Miscellaneous applications are disposed of.