Penalty for clearances during pending classification approval was unwarranted where filings were regular and no suppression was found

Penalty for clearances made while a classification list remained pending approval was considered unwarranted where the assessee had filed the required lists regularly, relied on an earlier approved classification, and the department had knowledge of the removals through RT-12 returns and routine assessments. The pending approval was attributed to departmental delay rather than any fault of the assessee, and no suppression of facts was found. In those circumstances, the clearances made before formal approval did not justify penal action, and the penalty was set aside.

---

---

Issues: Whether penalty could be sustained for clearances made while the classification list remained pending for approval, when the assessee had filed the required lists, the department had knowledge of the removals, and no suppression of facts was found.

Analysis: The assessee had filed classification lists regularly and had acted on the basis of an earlier approved classification. The pending approval was attributable to departmental delay and not to any fault of the assessee. The department was receiving RT-12 returns and assessing them in the ordinary course, which supported the assessee's bona fide understanding that the classification stood accepted. In these circumstances, although the clearances were technically made before formal approval, the conduct did not justify penal action.

Conclusion: Penalty was not warranted and was set aside; the appeal succeeded.

---