Each Bill of Entry must be assessed individually under Customs Act, not collectively for e-scooter classification disputes

CESTAT New Delhi allowed the appeal, setting aside the order that assessed 26 Bills of Entry together to classify imported goods as e-scooters. The tribunal held that each Bill of Entry must be assessed individually under the Customs Act, except for project imports. The revenue failed to establish that goods in each Bill of Entry constituted complete e-scooters under GRI 2(a). The tribunal ruled that unconditional exemption notifications cannot be denied merely because not claimed in the Bill of Entry. Confiscation and penalties were set aside as goods cannot be confiscated solely for classification disputes where the importer acted in good faith.

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1. ISSUES PRESENTED and CONSIDERED

(a) Can more than one Bill of Entry be assessed together to determine the classification of the goodsRs.

(b) Can the goods imported under the 26 Bills of Entry be considered as e-scooter in disassembled and unassembled state in the facts of this caseRs.

(c) Did the Commissioner correctly deny the benefit of the unconditional exemption Notification No. 50/2017-Cus as amended available to goods falling under CTH 8711 on the ground that the appellant had not claimed it in the Bills of EntryRs.

(d) Was the Commissioner correct in holding the goods were liable for confiscation under section 111(m) of the Customs Act for alleged wrong classification and the consequently imposing penalty under section 112(a)(ii) of the Customs ActRs.

2. ISSUE-WISE DETAILED ANALYSIS

Assessment of several Bills of Entry together

The legal framework involves Section 46 and Section 47 of the Customs Act, which require the importer to file a Bill of Entry for the clearance of goods and allow the proper officer to permit clearance for home consumption. The Court noted that each Bill of Entry must be assessed individually, as there is no provision in the Customs Act to combine multiple Bills of Entry for assessment purposes, except under the Project Import Regulations. The classification and assessment of goods must be done individually for each Bill of Entry.

Classification of the imported goods

The Court found that the Principal Commissioner erred in classifying the imported parts as complete e-Scooty under CTH 8711 by applying GRI 2(a). There was insufficient evidence to establish that the goods imported under each Bill of Entry constituted a complete e-Scooty. The SCN failed to justify how the imported goods warranted classification as e-Scooty under GRI 2(a) for each Bill of Entry.

Exemption notification

The appellant argued that even if the goods were classified as e-Scooty, they were entitled to a reduced BCD rate of 15% under Notification No. 50/2017-Cus. The Court agreed, stating that the benefit of an unconditional exemption notification cannot be denied simply because it was not claimed in the Bill of Entry. Section 25 of the Customs Act does not require the importer to claim the benefit of an exemption notification to be entitled to it. The notification reduces the charge under Section 12, and duty cannot be collected beyond what is provided in the notification.

Confiscation and penalty

The Court examined Section 111(m) of the Customs Act, which provides for confiscation of goods that do not correspond with the entry made under the Act. The Court found that the classification of goods is a matter of opinion and part of self-assessment under Section 17(1). A wrong classification does not mean mis-declaration, and goods cannot be held liable for confiscation under Section 111(m) merely due to a different classification opinion. Consequently, the penalty under Section 112, dependent on confiscation under Section 111, cannot be sustained.

3. SIGNIFICANT HOLDINGS

The Court held that each Bill of Entry must be assessed individually, and there is no provision to combine multiple Bills of Entry for classification and assessment. The classification of goods as e-Scooty under CTH 8711 was not justified due to insufficient evidence. The benefit of an unconditional exemption notification cannot be denied for not being claimed in the Bill of Entry, as it falls under the exception clause of Section 12. Imported goods are not liable for confiscation under Section 111(m) for wrong classification, and consequently, the penalty under Section 112 cannot be sustained.

The appeal was allowed, and the impugned order was set aside.

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