2023 (11) TMI 320 - AT - Customs

Imported steel balls classified under CTH 8482 not CTH 8714 per Chapter Note 6 to Chapter 84

Shri Sumit Arora, Shri Amit Arora and M/s UnistarTechnoplast Pvt. Ltd. Versus Commissioner of Customs, Ludhiana

Shri Sumit Arora, Shri Amit Arora and M/s UnistarTechnoplast Pvt. Ltd. Versus Commissioner of Customs, Ludhiana - 2024 (387) E.L.T. 452 (Tri. - Chan.) Issues Involved:1. Classification of imported 'Steel Balls' under the correct Customs Tariff Heading (CTH).2. Validity of the reliance on Chartered Engineer's certificate.3. Applicability of penalties and extended period for duty recovery.Summary:1. Classification of Imported 'Steel Balls':The primary issue was whether the imported 'Steel Balls' should be classified under CTH 8482 9900, as claimed by the appellant, or under CTH 8714 9990, as argued by the Revenue. The appellant contended that CTH 8482 9900 is a specific entry for 'Steel Balls,' supported by General Rule 3(a) of the General Rules for Interpretation, which states that a specific entry should be preferred over a general one. They also cited Chapter Note 6 to Chapter 84, which specifies that polished steel balls fall under CTH 8482. The Department, however, relied on statements from bicycle manufacturers and a Chartered Engineer's certificate to argue for classification under CTH 8714 9990, which covers parts and accessories of motor vehicles.2. Validity of the Reliance on Chartered Engineer's Certificate:The appellant challenged the validity of the Chartered Engineer's certificate issued by Shri Rajesh John, arguing that it was based on a market survey rather than technical expertise and did not conclusively determine the use of the steel balls. The appellant's request for cross-examination of the Chartered Engineer was denied, which was considered a violation of natural justice. The Tribunal found that the certificate did not specify whether the steel balls were polished and was not based on technical testing and examination.3. Applicability of Penalties and Extended Period for Duty Recovery:The appellant argued that the issue was purely one of classification and that there was no suppression with intent to evade duty, making the invocation of the extended period and imposition of penalties inappropriate. The Tribunal noted that the appellants had previously classified the goods under CTH 8714 9990 but were not bound to continue with an incorrect classification. The Tribunal also emphasized that classification should be based on the descriptions in the tariff headings and not on the end use of the product.Conclusion:The Tribunal concluded that the imported steel balls should be classified under CTH 8482 9900, as it is a specific heading for polished steel balls. The impugned order was found to be unsustainable, and the appeals were allowed. The penalties imposed on the appellant's company and its directors were also set aside. The Tribunal stressed the importance of maintaining uniformity in classification across different Customs stations to reduce unnecessary litigation.