2024 (3) TMI 363 - AT - Customs

Tribunal Overturns Revenue's Reclassification, Invalidates Differential Duty, Grants Appellant Benefits.

The Tribunal concluded that the Revenue failed to substantiate the reclassification of the imported goods under CTH 7318. The Show Cause Notice lacked ... Classification of goods - Goods imported as “Nut tie Bar, Screw, Screw Tip, Locking ring, etc.” from China - whether the revenue is correct in re-classifying the goods under CTH 7318 instead of the declared classification CTH 84779000? - demand for differential duty - HELD THAT:- Admittedly, the claim of the appellant that the consignment in question was specially designed for its use alone and that the same could not be used as a general item was supported by the expert opinion in the form of tech-write-up and neither the original authority nor the FAA finds fault with the same, nor does they disagree with the same. Also, other than the audit objection by the audit team, there is absolutely nothing made available on record by the revenue to justify classification under CTH 7318, nor is there any whisper about the claims of the appellant being wrong. No fault found with the nature or even the usage of the goods in question, nor is there any counter to the technical write-up as to the design and usage of the goods in question. Hence, this is clear case where the revenue has alleged wrong classification based on nothing and thus the consequent SCN proposing to demand differential duty lacks a concrete foundation. Thus, we hold that the Revenue is not able to establish or satisfy in its attempt to re-classify the goods in question under CTH 7318 and hence, the impugned order lacks merit. Resultantly, the impugned order is set aside and the appeal is allowed with consequential benefits, if any, as per law. Issues:The issue involved in the judgment is whether the revenue correctly reclassified the goods under CTH 7318 instead of the declared classification CTH 84779000.Summary:Issue 1: Revenue's reclassification of goodsThe appellant imported goods and declared them under CTH 8477 9000, but the Revenue claimed they should be classified under CTH 7318. The Audit team noticed the alleged misclassification, leading to a Show Cause Notice and subsequent demands. The Adjudicating Authority confirmed the proposals without considering the appellant's justifications based on technical write-ups and design. The First Appellate Authority also upheld the demand, prompting the appellant to file the present appeal.Issue 2: Examination of lower authorities' ordersUpon reviewing the lower authorities' orders and the documents, it was noted that the goods were specially designed for the appellant's use and could not be used as a general item. Expert opinions supported this claim, and neither the original authority nor the First Appellate Authority disagreed with this assertion. The Revenue failed to provide substantial evidence to justify the reclassification under CTH 7318, and no faults were found with the nature or usage of the goods in question.Decision:The Tribunal found that the Revenue did not adequately establish the reclassification of the goods under CTH 7318. The lack of concrete evidence to support the reclassification rendered the Show Cause Notice proposing differential duty baseless. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per law.