Customs classification and limitation fail where ship-breaking goods are properly disclosed and no suppression is shown.

Ship-breaking shaft pieces were held correctly classifiable under heading 7326, because the goods had lost their original identity as shafts after salvage and breaking, and the Revenue's reclassification under heading 8483 lacked a sustainable basis. The show cause notice was also held time barred, as the import documents and assessment at clearance disclosed no concealment or mis-declaration, so the extended period under section 28(4) of the Customs Act, 1962 was unavailable. Revenue neutrality further negatived any allegation of deliberate suppression. The impugned order was therefore set aside and consequential relief was granted.

---

---

Issues: (i) Whether the imported ship-breaking shaft pieces were classifiable under heading 7326 as declared or under heading 8483 as proposed by the Revenue; (ii) whether the show cause notice was barred by limitation and whether the extended period could be invoked on the basis of suppression or mis-declaration.

Issue (i): Whether the imported ship-breaking shaft pieces were classifiable under heading 7326 as declared or under heading 8483 as proposed by the Revenue.

Analysis: The goods were described in the commercial invoice and import documents as iron and steel shaft parts obtained from ship breaking. After salvage and breaking, the goods lost their original identity as shafts and acquired the character of iron and steel articles falling within the specific description applicable to parts of ship. The Revenue did not show any sustainable basis for reclassification under heading 8483, and the assessment made at clearance had not been disturbed in accordance with law.

Conclusion: The goods were correctly classifiable under heading 7326 and the Revenue's proposed classification under heading 8483 was not sustainable.

Issue (ii): Whether the show cause notice was barred by limitation and whether the extended period could be invoked on the basis of suppression or mis-declaration.

Analysis: The record did not disclose concealment or misrepresentation by the importer. The import documents themselves reflected the relevant classification, and the authorities had assessed the goods at clearance. In such circumstances, the extended period under section 28(4) of the Customs Act, 1962 was not available. The case was also revenue neutral, which negatived any allegation of deliberate mis-declaration.

Conclusion: The show cause notice was time barred and invocation of the extended period was not justified.

Final Conclusion: The impugned order was unsustainable and was set aside, with the appeal being allowed and consequential relief granted as per law.

Ratio Decidendi: Where the import documents and assessment at clearance support the declared classification, and no suppression or deliberate mis-declaration is established, reclassification and invocation of the extended limitation period cannot be sustained, especially in a revenue-neutral situation.

---