2018 (10) TMI 111 - AT - Customs

Tribunal clarifies import classification, stresses tax declaration accuracy. Procedural irregularities void duty imposition.

The tribunal upheld the first appellate authority's finding on the classification of imported goods as prime goods instead of scrap, emphasizing the ... Classification of imported goods - stainless steel melting scrap grade 304 - whether the goods classified under heading 7204 2190 or under heading 7219 9090 of the First Schedule to the Central Excise Tariff Act, 1975? - Anti-dumping duty - Valuation - Principles of natural justice. Held that:- The order of the original authority has, while recording that the show cause notice was waived, gone on to classify the goods under a different heading with a mere assertion and in the absence of a proper examination of the validity for adoption of the alternative classification. In the normal course, a change in classification must be preceded by a show cause notice indicating the grounds on which the revision is proposed. Even if the waiver of notice was by consent, the obligation on the part of the assessing officer to render a rationale and comprehensive finding for the alternative classification cannot be alienated - such an exercise has not been carried out. The proceedings against the appellant to have not been in compliance with the principles of natural justice as well as the provisions of law pertaining to classification of goods and valuation - the original authority is directed to consider the matter afresh on the classification of the imported goods - appeal allowed by way of remand. Issues: Classification of imported goods, liability for anti-dumping duty, compliance with compulsory registration scheme, principles of natural justiceClassification of Imported Goods:The case involved the import of goods declared as 'stainless steel melting scrap grade 304' but were later found to be prime goods other than scrap upon examination. The appellant argued that the goods were to be used as melting scrap despite being sheets of various sizes. The absence of a 'mill test certificate' was highlighted, and the appellant relied on the preshipment certificate for classification under heading 7204 2190 of the Customs Tariff Act, 1975. The tribunal noted that the customs authorities should have notified the importer of the change in classification or the importer should have accepted the revised classification. The first appellate authority's finding on classification was upheld, emphasizing the importance of certainty of tax and proper declaration by the importer.Liability for Anti-Dumping Duty:The re-assessment of the goods led to the imposition of anti-dumping duty under notification no. 52/2017-Cus (ADD). The tribunal observed that without a validated classification, the imposition of anti-dumping duty and the requirement to conform to Bureau of Indian Standards' prescriptions would not be sustainable. The tribunal emphasized the necessity of a comprehensive and rationale examination before changing the classification to avoid detrimental consequences for the importer.Compliance with Compulsory Registration Scheme:The goods were also held liable for confiscation due to failure to comply with the compulsory registration scheme and mandatory BIS certification prescribed under IS 6911 for stainless steel sheets grade 304. The appellant was permitted to redeem the goods on payment of a fine subject to re-export. The tribunal noted that the proceedings against the appellant did not comply with the principles of natural justice and the provisions of law concerning the classification of goods and valuation. As a result, the impugned order was set aside, and the original authority was directed to reconsider the matter afresh, taking all submissions of the appellant into account.This detailed analysis of the judgment highlights the key issues of classification of imported goods, liability for anti-dumping duty, compliance with compulsory registration scheme, and adherence to principles of natural justice. The tribunal's decision focused on the importance of proper classification, notification of changes, and the necessity for a comprehensive examination before imposing duties or penalties on importers.