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of <h1>Classification of salvaged ship shaft pieces affirmed as ship parts, reclassification notice held time barred and set aside</h1> Imported broken and salvaged shaft pieces were held to be classifiable as parts of ship under the relevant tariff heading, because salvaging changes their ... Classification of goods - finality of assessment - imported broken/ salvaged shaft pieces are classifiable under CTH 7326 9090 (parts of ship) or under CTH 8483 1092 (shafts/crankshafts) - extended period of limitation / suppression and mis-declaration - imposition of penalty - SAFTA Certificate - Whether the impugned show cause notice seeking re-classification and recovery of differential duty was sustainable in view of the earlier assessment, classification of the goods as parts of ship and the applicability of extended limitation - HELD THAT:- The commercial invoice as well as the SAFTA Certificate categorically mention the classification of goods under heading 73269090.The Revenue, post clearance of the imported goods have not given out a single sustainable reason for the proposed change of classification. Parts of ships, excluding those specified under heading 7326 9080, are clearly classifiable under CTH 7326 9090, in view of the specific description of goods stated therein. Moreover upon salvaging and breaking up of the ship the parts thereof loose their original identity and attain a different nomenclature and an independent identity. The goods assume a different character as an article of iron & steel, therefore, meriting classification under CTH 7326 and being a part of ship the sub-heading 7326 9080 squarely meets the description of goods; further by virtue of exclusion under CTH 7326 9080 would automatically fall under CTH 7326 9090. There is apparently no concealment of facts or misrepresentation thereof by the appellant in the matter and as such we are not in agreement with the Revenue’s contention on this aspect, justifying and sustaining invocation of larger limitation period. We are of the unequivocal view that extended period of limitation was inapplicable in the given context and the show cause notice is clearly time barred. It is also a fact that even otherwise the present matter would be one of revenue neutrality. Under the circumstances we also find no merit in the appellant attempting the alleged concealment of facts, as they were eligible to avail credit of the duty paid. Therefore, apart from what is stated above in foregoing paras, concerning the merits of the matter, it is categorical that the present case being one of revenue neutrality there obviously was no incentive to deliberately mis-declare the imported goods The import documents as supplied by the exporter including the country of origin certificate, state the classification as CTH as 7326 9090. Moreover, in view of what is stated herein the said goods would clearly be classifiable under 7326 9090. Thus, we find the order of the lower authority as not in accordance with law and therefore the same would be required to be set aside. We therefore set aside the impugned order in its entirety and allow the appeal filed by the appellant with consequential relief, if any, as per law. Issues: (i) Whether the imported broken/ salvaged shaft pieces are classifiable under CTH 7326 9090 (parts of ship) or under CTH 8483 1092 (shafts/crankshafts); (ii) Whether the show cause notice invoking differential IGST, interest and penalty issued after clearance is time-barred by limitation and whether extended period under suppression/mis-declaration is invocable.Issue (i): Classification of the imported goods as CTH 7326 9090 versus CTH 8483 1092.Analysis: The imported goods were described in import documents and the SAFTA certificate as parts of ship and were salvaged/broken portions cut into varying lengths; the characteristics do not correspond to crankshafts for engines covered by CTH 8483 1092. The goods were assessed and cleared under CTH 7326 9090 at the time of import and that classification is supported by the specific description for parts of ships within heading 7326.Conclusion: The goods are classifiable under CTH 7326 9090 and not under CTH 8483 1092; classification in favour of the appellant.Issue (ii): Validity of the show cause notice issued after clearance invoking extended limitation for suppression/mis-declaration.Analysis: The assessment at the time of clearance was final and unchallenged by Revenue during the material time; there is no record of concealment or misrepresentation justifying invocation of the extended period of limitation. The matter is of revenue neutrality and the Revenue did not provide sustainable reasons to reopen the finalized assessment.Conclusion: The show cause notice invoking extended limitation is time-barred and not sustainable; position in favour of the appellant.Final Conclusion: The impugned order adopting classification under CTH 8483 1092 and seeking differential duty, interest and penalty is set aside; the appeal is allowed and consequential relief, if any, is granted in favour of the appellant.Ratio Decidendi: Salvaged parts of ship that have lost original identity and are described as parts of ship fall within heading 7326 9090, and a finalized assessment without evidence of concealment bars reopening by invoking the extended period of limitation.
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