Customs duty demand set aside as notice was time-barred under Section 28(4) without willful suppression evidence

CESTAT Ahmedabad set aside customs duty demand against appellant for crane and grab imports under Bills of Entry dated 04.02.2010 and 18.03.2010. SCN issued on 29.01.2014 was time-barred as extended period under Section 28(4) of Customs Act, 1962 could not be invoked. Court held no evidence of willful suppression or deliberate misclassification by appellant, who provided all relevant documents during assessment. Explanatory Notes relied upon by department were not accessible to public and mere change in classification view by authorities after clearance cannot establish suppression. Appeal allowed solely on limitation grounds; duty demand, interest, fine and penalties set aside.

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Issues Involved:
1. Validity of invoking the extended period under Section 28 of the Customs Act, 1962.
2. Allegations of willful misclassification and suppression of facts.
3. Legality of the demand for differential duty, interest, penalty, and redemption fine.

Summary:

1. Validity of Invoking the Extended Period:
The appellant argued that the extended period for issuing the Show Cause Notice (SCN) was improperly invoked, as the matter had already been investigated by the Directorate of Revenue Intelligence (DRI) for all four Bills of Entry, and no SCN was issued for two of them. The Tribunal found that the demand involved was for imports vide Bills of Entry No. 147807 dated 04.02.2010 and No. 149946 dated 18.03.2010, while the SCN was issued on 29.01.2014, thus falling under the extended period. The Tribunal held that the extended period could not be invoked as there was no deliberate suppression of facts or willful misstatement by the appellant.

2. Allegations of Willful Misclassification and Suppression of Facts:
The appellant contended that there was no willful misclassification or suppression of facts, as all relevant documents were submitted at the time of import, and the goods were cleared after proper examination by customs authorities. The Tribunal noted that the SCN and orders relied on Explanatory Notes, which are not accessible to the public and not part of the chapter notes under chapter 89. The Tribunal concluded that the appellant could not be held responsible for any alleged misclassification, as the proper officer of customs was responsible for determining the correct rate of duty.

3. Legality of the Demand for Differential Duty, Interest, Penalty, and Redemption Fine:
The Tribunal observed that the SCN dated 29-01-2014 and the subsequent orders were not supported by any new documentary evidence to establish suppression of facts or misstatement. The Tribunal emphasized that the burden of proving the correct classification of goods lies with the revenue, and in the absence of any clinching evidence, the charge of suppression of facts could not be sustained. Consequently, the Tribunal held that the extended period under Section 28(4) of the Customs Act, 1962, could not be legally invoked, and the entire demand was hit by time limitation.

Conclusion:
The Tribunal set aside the impugned order, including the duty demand, interest, fine, and penalties, on the ground of time bar. The appeal was allowed with consequential relief as per law.

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