Clearance of packing materials as scrap mis-declaration led to dismissal of appeal and duty demand sustained

Clearance of packing materials declared as 'scrap' was treated as mis-declaration and suppression alleged to evade duty; the extended limitation period was invoked for shipments from October 2009 to May 2014 and notice issued under the Customs Act. The tribunal observed no independent evidence proving intentional suppression but held that the assessee's statutory returns (E.R.2) themselves manifested the misleading declaration, placing the evidential burden on the claimant. Because the departmental proceedings were founded on those returns and no convincing proof of bonafides was produced, the appeal lacked merit and was dismissed, sustaining the demand for duty.

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Issues: (i) Whether the Revenue proved that the clearances by the appellant were not non-reusable packing-scrap but liable to duty; (ii) Whether invocation of the extended period of limitation is justified.

Issue (i): Whether the clearances were scrap or reusable packing material liable to customs duty.

Analysis: The notification and circular relied upon by the appellant are conditional and require compliance with safeguards and prior permission. The returns (ER-2) filed by the appellant declared the CTH inconsistent with the declared description and formed the basis for departmental proceedings. The appellant did not establish, with admissible evidence, compliance with the conditions set out in the circular or that the materials were non-reusable scrap; statements and documentary material were considered in light of the conditional nature of the concession and the claimant's burden to prove entitlement.

Conclusion: In favour of Revenue.

Issue (ii): Whether the extended period of limitation could be invoked.

Analysis: The SCN alleged suppression and mis-declaration in returns over the relevant period. Given the returns filed and the Tribunal's finding that suppression was evident from those returns, the requirement for invoking extended limitation was satisfied on the material before the authority.

Conclusion: In favour of Revenue.

Final Conclusion: The appellate challenge fails on both issues and the appeal is dismissed; the departmental demand and penalty as confirmed below stand upheld for adjudication/quantification as directed by the lower forum.

Ratio Decidendi: Where a fiscal concession is conditional, the claimant bears the burden of proving compliance with the conditions including prior permissions; absent such evidence and where returns indicate mis-declaration or suppression, the Revenue is entitled to invoke extended limitation and confirm duty demand.

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