2023 (5) TMI 48 - AT - Customs

Tribunal emphasizes Customs Tariff Heading in classification ruling, burden of proof on Revenue

C.C., - AHMEDABAD Versus RATNAVEER PRECISION ENGINEERING LTD

C.C., - AHMEDABAD Versus RATNAVEER PRECISION ENGINEERING LTD - TMI Issues involved: The dispute involves the classification of goods under different headings in four bills of entry, specifically under headings 72199090, 72192141, 72191200, 72191300, and 72191400. The main issue revolves around the application of Notification No. 1/2013-Cus (SG) dated 14.01.2013 imposing safeguard duty on Hot Rolled Flat Products.Issue 1: Classification of goods beyond the show cause noticeThe original adjudicating authority classified the goods under headings different from what was proposed in the show cause notice, leading to an appeal by the respondent to the Commissioner (Appeals) and subsequently to the Tribunal. The Revenue challenged the Commissioner's decision, arguing that even if the tariff item is not correctly mentioned in the show cause notice, the demand can still be confirmed under a different tariff heading.Issue 2: Compliance with show cause noticeThe respondent contended that once a show cause notice proposes a particular classification, the adjudicating authority cannot classify the goods under a different classification without issuing a separate show cause notice within the permissible time. Citing the decision of the Hon'ble Apex Court in the case of Warner Hindustan Limited, the respondent emphasized the importance of adhering to the classification proposed in the show cause notice.Judgment:The Tribunal considered the arguments presented by both parties and referred to the decision of the Hon'ble Apex Court in the case of Warner Hindustan Limited. The Tribunal highlighted that it is impermissible for the adjudicating authority to classify goods under a Customs Tariff Heading different from the one proposed in the show cause notice. The Tribunal dismissed the appeal of the Revenue, emphasizing that the entire case of the Revenue cannot sustain due to the incorrect classification proposed. This decision aligns with the settled legal position that if goods are not classifiable under the chapter heading proposed by the revenue, the case of the department will fail. The Tribunal upheld the principle that the classification claimed by the appellant, even if debatable, will stand if the proposed classification by the Revenue is found to be inappropriate.This judgment underscores the significance of adhering to the classification proposed in the show cause notice and the consequences of deviating from it without issuing a separate notice. It also reaffirms the legal principle that the burden of proof lies with the Revenue to establish the correct classification of goods, failing which the classification declared by the appellants cannot be disturbed.