Self-assessed tariff classification and extended limitation for customs IGST require specific challenge and suppression material in the notice.

IGST liability on imported goods linked to tariff classification cannot be sustained where the show cause notice does not first dispute the self-assessed classification adopted by the importer. The article also states that the extended limitation period under Section 28(4) of the Customs Act, 1962 requires foundational material in the notice showing suppression, misdeclaration, collusion or wilful misstatement; absent such allegations, the extended period is unavailable and the demand is time-barred. On the facts discussed, the demand was held unsustainable on merits and barred by limitation, and the adjudicating authority's order dropping the demand was restored.

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Issues: (i) Whether the demand for IGST could be sustained on merits when the imported tea pruning machines and their parts were classified under heading 8432/8438 and the department had not challenged the self-assessment classification in the show cause notice; (ii) Whether the extended period under Section 28(4) of the Customs Act, 1962 was available in the absence of any allegation or material showing suppression, misdeclaration or collusion.

Issue (i): Whether the demand for IGST could be sustained on merits when the imported tea pruning machines and their parts were classified under heading 8432/8438 and the department had not challenged the self-assessment classification in the show cause notice.

Analysis: The imported goods were cleared on self-assessment, and the classification adopted by the importer was not controverted in the show cause notice. The entries in Notification No. 1/2017-Integrated Tax (Rate) linked IGST liability to the tariff heading applicable to the goods, and the department's attempt to levy tax by relying only on the residual entry could not succeed without first disputing the classification itself. The adjudicating authority had correctly found that the goods fell within the relevant tariff heading and that the demand was unsustainable on merits.

Conclusion: The demand was not sustainable on merits and the finding in favour of the importer was upheld.

Issue (ii): Whether the extended period under Section 28(4) of the Customs Act, 1962 was available in the absence of any allegation or material showing suppression, misdeclaration or collusion.

Analysis: The show cause notice invoked the extended limitation period, but it did not contain any factual basis establishing wilful misstatement, suppression of facts, collusion or mala fide intent. In the absence of such foundational ingredients, the extended period could not be invoked merely to sustain a belated demand. The limitation objection therefore succeeded.

Conclusion: The extended period of limitation was not available to the Revenue and the demand was barred by limitation.

Final Conclusion: The remand order was set aside and the adjudicating authority's order dropping the demand was restored, resulting in complete relief to the importer.

Ratio Decidendi: A demand under the extended limitation provision cannot stand unless the show cause notice itself discloses material showing suppression, misdeclaration or collusion, and a customs IGST demand linked to tariff classification cannot be sustained without first disputing the classification adopted in self-assessment.

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