2020 (12) TMI 200 - AT - Customs

Tribunal remands case for fresh decision on extended limitation period & concessional rate eligibility

The Tribunal partly allowed the appeal by remanding the case to the Original Authority for a de novo order within six months. The Tribunal upheld the ... Classification of imported goods - ‘catalytic converter assembly’ which is attached with an inlet and an outlet pipe - classified under tariff item 8421 3990 or not - benefit of concessional rate of duty - extended period of limitation - HELD THAT:- As per the impugned Notification, the concessional rate of duty is for a particular item/goods; a perusal of the Bills-of-Entry placed along with the Appeal Memorandum reflects ‘piece price’ for the relevant item under ‘description’ column which would only mean that the price charged was for the described assembly and other than this, we do not see any breakup and nor is it relevant for us now. Further, we also do not dispute the classification of the disputed item under CTH 8421 duly supported by GIR 2 (b), but however, mere classification ipso facto does not decide the eligibility or otherwise to a beneficial Notification since Notification No. 21/2002(supra) does not grant concession based on a mere classification, rather on individual items. A perusal of the Show Cause Notice reveals that the DRI had entertained a doubt that the appellant was claiming ineligible concession of duty under Customs Notification No. 21/2002 dated 01.03.2002. In this background, the Revenue considered Bills-of-Entry No. 5747602, 5747715 and 5749760 all dated 17.01.2012 and conducted a thorough verification of the goods described in the above Bills-of-Entry. These are the invoices furnished by the appellant. From the Bills-of-Entry it is seen that for the goods imported and declared as “Catalytic Converter Asy” vide said three Bills-of-Entry all dated 17.01.2012, the appellant has claimed benefit of concessional rate of duty vide Notification ibid. and has paid Basic Customs Duty at 5% as against tariff rate of 7.5% Basic Customs Duty: the benefit is apparently claimed on the amount reflected which represents the cumulative value for “Catalytic Converter Asy”. Extended period of limitation - HELD THAT:- The appellant has wilfully suppressed as well as mis-stated the actual/complete description of the impugned goods under import, etc., thereby claiming the benefit of concessional rate of duty, to justify the invoking of extended period of limitation in terms of Section 28 (1) / 28 (4) of the Customs Act, 1962, as applicable during the period. Matter remitted back to the file of the Original Authority to pass a de novo Order-in-Original, giving a logical finding on the allegations raised in the Show Cause Notice after considering the plea of the appellant, on merits - appeal is treated as partly allowed by way of remand on merits, but however, partly dismissed on the ground of limitation. Issues Involved:1. Eligibility for concessional rate of Basic Customs Duty (BCD) on imported catalytic converter assemblies.2. Correct classification of the imported goods.3. Invocation of the extended period of limitation for demanding differential duty.Detailed Analysis:1. Eligibility for Concessional Rate of BCD:The central issue is whether the appellant is eligible for the concessional rate of BCD at 5% for importing 'catalytic converter assemblies' under Serial No. 265 of Notification No. 21/2002-Cus. The appellant argued that the catalytic converter assemblies, despite being attached with inlet and outlet pipes, should still be considered as catalytic converters and thus eligible for the concessional rate. The appellant emphasized that the catalytic converter's function remains unchanged, converting harmful exhaust gases into less harmful substances, and the additional components (inlet and outlet pipes) do not alter its fundamental nature. The appellant relied on previous Tribunal decisions and Supreme Court rulings to support their claim for the concessional rate.2. Correct Classification of the Imported Goods:The Revenue contended that the imported goods, being more than just catalytic converters (as they included inlet and outlet mechanisms and flexible exhaust pipes), did not qualify for the concessional rate under the specific entry for 'catalytic converter' in the Notification. The Revenue argued that the Notification extended the concessional rate only to 'catalytic converter' per se, without any attachments. The impugned Order-in-Original confirmed the classification of the goods under tariff item 8421 3990 and demanded differential duty, interest, and penalties.3. Invocation of Extended Period of Limitation:The Revenue justified the invocation of the extended period of limitation under Section 28 (1)/28 (4) of the Customs Act, 1962, citing willful suppression and misstatement of the goods' description by the appellant. The Show Cause Notice highlighted that the appellant mis-declared the description of the imported goods, leading to duty evasion. The Tribunal found that the observations in the Show Cause Notice satisfied the requirements for invoking the extended period of limitation due to the appellant's willful suppression and misstatement.Tribunal's Decision:The Tribunal did not find justifiable reasons to interfere with the findings in the impugned order regarding the invocation of the extended period of limitation. However, it deemed it necessary to remit the matter back to the Original Authority to pass a de novo Order-in-Original, providing a logical finding on the allegations raised in the Show Cause Notice after considering the appellant's plea on merits. The Tribunal instructed the Original Authority to pass the de novo order within six months and clarified that it had not expressed any opinion on the merits of the case.Conclusion:The appeal was partly allowed by way of remand on merits but partly dismissed on the ground of limitation. The Original Authority was directed to pass a de novo order, considering all relevant case laws and the appellant's submissions, within six months from the date of receipt of the order.