Imported goods mis-classified as Copper Clad Laminates should be classified as Aluminium Paste Copper Clad Laminates under different CTH

The CESTAT NEW DELHI held that imported goods declared as Copper Clad Laminates were mis-classified and should be classified as Aluminium Paste Copper Clad Laminates under different CTH. The appellant's voluntary admission of mis-classification was upheld, and retraction was deemed an afterthought. However, the Commissioner (Appeals) exceeded jurisdiction by imposing penalty under section 112 without proper show cause notice, as the original proceedings only involved section 114A penalty. The penalty under section 112 was set aside while other findings were maintained. Appeal partially allowed.

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Issues Involved:
1. Mis-declaration and re-classification of imported goods.
2. Imposition of differential customs duty.
3. Confiscation and redemption fine.
4. Imposition of penalty under Section 114A and Section 112 of the Customs Act, 1962.
5. Validity of retraction of statements by the appellant.
6. Payment of differential duty 'under protest'.

Issue-wise Detailed Analysis:

1. Mis-declaration and Re-classification of Imported Goods:
The appellant filed a Bill of Entry for goods declared as "Copper Clad Laminates-AL grade" under CTH 7474102100. Upon examination, the goods were found to be "Aluminium Paste Copper Clad Laminates," classifiable under CTH 76061200, leading to their seizure under Section 110 of the Customs Act, 1962, on the belief that they were liable to confiscation under Section 111 of the Act. The partner of the appellant company accepted the revised classification and agreed to pay the differential customs duty.

2. Imposition of Differential Customs Duty:
The adjudicating authority calculated the duty liability to be Rs. 9,67,241/-. Since the appellant had already paid Rs. 7,63,540/-, the differential duty of Rs. 2,03,701/- was levied. The goods were ordered to be confiscated under Section 111(m) of the Act, with an option to redeem them on payment of a redemption fine of Rs. 50,000/- under Section 125 of the Act.

3. Confiscation and Redemption Fine:
The goods were confiscated due to mis-declaration, and the appellant was given an option to redeem them by paying a fine. The confiscation was upheld by the Commissioner (Appeals), and the redemption fine was confirmed.

4. Imposition of Penalty under Section 114A and Section 112:
The adjudicating authority initially imposed a penalty of Rs. 2,03,701/- under Section 114A of the Act. On appeal, the Commissioner (Appeals) set aside the penalty under Section 114A and imposed a penalty of Rs. 20,370/- under Section 112 of the Act, relying on the decision in Nagpur International. The Tribunal found that the appellate authority had no jurisdiction to impose a penalty under Section 112, as it was not part of the original adjudication order. Thus, the penalty under Section 112 was set aside.

5. Validity of Retraction of Statements by the Appellant:
The appellant's partner retracted his statement, claiming it was made under duress. The Tribunal noted that the retraction was made after the order in original was passed and considered it an afterthought. The Tribunal held that the retraction had no evidential value, relying on the decision in Hanuman Prasad vs. Collector of Customs, Jaipur, and other similar cases.

6. Payment of Differential Duty 'Under Protest':
The appellant claimed that the differential duty was paid 'under protest'. However, the Tribunal found no evidence in the challan to support this claim. The statement made on April 16, 2021, that the duty was paid under protest, was considered an afterthought and was rejected.

Conclusion:
The Tribunal partially allowed the appeal. The imposition of penalty under Section 112 by the Commissioner (Appeals) was set aside as it was beyond jurisdiction. The confiscation, redemption fine, and differential customs duty were confirmed. The appeal was allowed to the extent of setting aside the penalty under Section 112 of the Customs Act, 1962.

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