https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=759418 https://www.taxtmi.com/caselaws?id=759418 Classification of imported goods - Binding Material, Parts for Brake, disc brake pads, tool for mould, etc . - to be classified under CTH 38249090 / 38247900 or CTH 68138900? - benefit of N/N. 152/2009-Cus. dated 31.12.2009 and also N/N. 50/2017-Cus. dated 30.06.2017 - invocation of Extended Period of limitation. HELD THAT:- Considering the composition of the materials and their usage in the manufacture of the brake pads indicate that imported materials are more appropriately classifiable under Chapter Heading 6813 as friction material. Even the Material Safety Data Sheet also indicates the name of the material as friction material and by synonyms as friction lining and brake lining as evidenced by the material safety data sheet. It is evident that Friction Material in the form consisting of mineral materials with or without textiles are classifiable under CTH 6813 if they are not mounted. But when they are mounted including friction material fixed to a metal plate provided with circular cavities or similar fittings for disc brakes, these are classified as parts of the machines or vehicles for which they are designed. In the present case, the product consists of a friction material (made up of organic and inorganic chemicals and minerals, graphite) which is bonded with a steel backing plate forming an integrated component. It is used in automotive vehicle brakes to stop or slow down the vehicle. From a perusal of the Tariff sub-heading 6813 we observe that friction materials and articles thereof (e.g. sheets, rolls, strips, segments, discs, washers, pads) not mounted for brakes or for clutches or the like is mentioned in the said heading. It is, therefore, clear that the friction material alone without any steel plate backing would fall under Tariff Heading 6813. The claim of the Appellant that the friction material is only in powder form and not in a particular shape necessitating its classification not under CTH 6813 is rejected as we find that such a condition is not a requirement for such classification. Further Chapter subheading 6813 reads as friction material and article thereof . The chapter heading 6813 includes both friction materials and also articles of friction materials. As such the contention of the Importer Respondent that Friction Materials unless they become an article cannot be classified under Chapter heading 6813 is not acceptable. Thus, appropriate classification of the imported product is not under CTH 3824 9090/3824 7900 as classified by the importer respondent. The Revenue was seeking to classify the product under CTH 6813 8900 as friction materials. After going through the provisions of the Customs Tariff Act and after considering the nature and composition of imported product and its essential character and the use to which this material is put to, we hold that it is more appropriately classifiable under CTH 6813 and not under CTH 3824. In view of the above, the impugned order dated 26.6.2019 passed by the Commissioner of Customs (Imports), Customs House, Chennai cannot be sustained and so is ordered to be set aside. Invocation of extended period - HELD THAT:- In the absence of any finding of positive suppression by the Appellant in the impugned order, it is found that the allegation of wilful misclassification and intention to evade duty by the Respondent is not at all tenable and misclassification could not be equated with misdeclaration within the meaning of Section 28(4) of the Customs Act, 1962. Considering the above facts that the Respondent is a regular importer of the product which is used in the manufacture of Brake pads and also considering that they were adopting the above classification consistently, it is opined that attributing any malafide intention or motive for adopting such classification or claiming exemption benefit of the Notification is not justified, considering the facts of this case. As such invocation of extended period for demand of duty in terms of provision of section 28(4) of Custom Act 1962 is not legal or justified. The issue of limitation is answered in favour of the Respondent importer. The Respondent s classification of the impugned goods under Chapter Heading 3824 9090/3824 7900 is rejected and the department s classification under CTH 6813 8900 is upheld. Consequently, the appellant is not eligible for the benefit of the Notification No. 50/2017-Cus. dated 30.06.2017 and Notification no.152/2009-Cus dated 31.12.2009. However, the demand for the normal period along with interest is only upheld and the demand for the extended period is decided in favour of the Respondent importer - Appeal of Revenue is partly allowed. Case-Laws Customs Tue, 10 Sep 2024 00:00:00 +0530