2025 (12) TMI 1156 - AT - Customs

Import goods classification and exemption dispute under notification-extended limitation rejected, so demand, confiscation, and penalties were set aside.

The dominant issue was whether the extended period of limitation could validly be invoked to sustain the demand and consequential confiscation and ... Determination of classification of fabrics imported - denial of exemption availed under N/N. 26/2000 (Cus) dated 01.03.2000 - Confiscation of goods - levy of penalties - extended period of limitation - HELD THAT:- This Tribunal finds that, as rightly contended by appellant, a Division Bench of the Chennai bench of this Tribunal has in M/S. GAUNIR IMPEX PVT. LTD., MR. NIREN C AJMERA VERSUS THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE, TUTICORIN [2025 (3) TMI 1359 - CESTAT CHENNAI] passed by the Commissioner of Customs, Custom House, Tuticorin, has rendered a finding that Revenue did not satisfy the tests laid down by the Hon’ble Apex Court in Nizam Sugar Factory and other cases [2006 (4) TMI 127 - SUPREME COURT] insofar as the invoking of the larger period of limitation is concerned and therefore the impugned order is set aside and the appeals are allowed on limitation. This Tribunal finds that since the Division Bench has already set aside the Order in Original impugned in the present appeals, by the aforesaid Final Order, on limitation, nothing survives for decision in these Appeals as these Appeals too are to be allowed on limitation following the binding Division Bench order aforecited. The reliance placed by appellant on the M/S. JOCIL LTD. [2025 (12) TMI 390 - CESTAT CHENNAI] is also appropriate as this Tribunal has held therein that once it is held in favour of the appellant on limitation, it would be outside the jurisdiction of the Tribunal to enter into the merits of the dispute as per the dicta of Higher Judicial Fora as cited therein. Since the Order in Original impugned in the appeals herein, is already found set aside, this Tribunal holds that the present appeals are also liable to be allowed - Appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED 1. Whether penalties imposed on the appellants under the impugned order could survive when the same Order-in-Original had already been set aside by a binding Tribunal decision on the ground of limitation. 2. Whether, after allowing the connected matters on limitation, the Tribunal could or should proceed to decide the merits of the allegations forming the basis of the penalties in the present appeals. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Survival of penalties once the same Order-in-Original is set aside on limitation in connected appeals Legal framework (as discussed in the judgment): The Court treated the earlier Division Bench Final Order as binding in relation to the same impugned Order-in-Original and its outcome on limitation. Interpretation and reasoning: The Court noted that the present appeals arose from the very same Order-in-Original which had already been set aside by a Division Bench on limitation. It recorded that both sides agreed on this factual position. The Court therefore held that, once the foundational Order-in-Original stands set aside on limitation, there remains nothing that independently survives for adjudication in the present appeals arising from that same order. The Court applied the binding effect of the earlier Division Bench order to the present appeals. Conclusion: The penalties against the appellants under the impugned Order-in-Original could not be sustained; the present appeals were allowed on limitation by following the earlier binding Tribunal order that had already set aside the Order-in-Original. Issue 2: Whether merits could be examined after allowing on limitation Legal framework (as discussed in the judgment): The Court relied on its own Tribunal precedent referenced in the judgment for the proposition that once the matter is decided on limitation in favour of the appellant, entering into merits would be outside the Tribunal's jurisdiction, consistent with higher judicial dicta (as noted by the Court). Interpretation and reasoning: The Court accepted the submission that, since the impugned Order-in-Original had been set aside on limitation, there was no necessity to render findings on merits. It further held that proceeding to examine merits after allowing on limitation would be impermissible, and considered the cited Tribunal Final Order as appropriately supporting this approach. Conclusion: The Court declined to go into the merits of the dispute and disposed of the appeals solely on limitation, granting consequential relief in accordance with law.