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=767687 https://www.taxtmi.com/caselaws?id=767687 Classification of imported goods - Fiber Optic Transmitters/Receivers/Transceivers - classifiable under CTH 85176290 or CTH 854230? - applicability of exemption under S.No.20 of N/N.57/2017 - Extended period of limitation - confiscation - penalties. Whether the impugned goods imported by the appellant are classifiable under CTH 85176290 or under CTH 854230 as contended by the appellants? - HELD THAT:- The adjudicating authority has gone through the details furnished by the appellant as well as various other documents referred to supra to come to the conclusion that goods are clearly classifiable under CTH 85176290 and the goods are also in the nature of OTE, in view of their actual function. He has also categorically ruled out the possibility of its classification as simple electrical integrated circuit, keeping in view the HSN explanatory note, according to which, essentially, at least one of the components are required to be present, which incidentally was not found to have been used in the said impugned goods. The adjudicating authority has taken into account the statements recorded from technical expert of the appellant as well as expert opinion and felt that these are in the nature of apparatus or devices meant for certain specific functions like conversion of, inter alia, electrical signal into optical signal and vice versa, using optical fiber cable and therefore, they are more in the nature of OTE. The fact that OTE has been categorically classified under CTH 85176290 in the notification itself also supports that if the impugned goods are in the nature of OTE then it would obviously fall under CTH 85176290. Applicability of exemption under S.No.20 of N/N. 57/2017 - HELD THAT:- The impugned order is a well reasoned order, where after going through the detailed submissions and other evidence on record, the adjudicating authority has rightly held the impugned goods to be classifiable under CTH 85176290 and has also rightly held that these are in the nature of OTE and therefore, they shall not be entitled for the benefit under notification 57/2017. In view of the same, the classification as well as denial of benefit under S.No.20 of the notification 57/2017 upheld. Invocation of extended period - HELD THAT:- There is nothing wrong for the appellant to have a bonafide belief to choose a heading which may be more beneficial to them even though, ultimately, it may not be found to be correct classification. However, this, per se, cannot become ground for invoking extended period of limitation. There has to be much more evidence on record to prove their deliberate plan or deliberate suppression in order to hoodwink the department into believing something else. Merely because they chose to claim classification under a heading, which they thought was more appropriate, it cannot be a ground for invoking extended period. Further, though the adjudicating authority has tried to bring in the concept of fraud for invoking extended period in the sense that they were deliberately misleading the department, it has neither been alleged in the SCN nor has been explained in what way the appellants were indulging in fraud. Therefore, invocation of extended period is not tenable and therefore, to that extent the impugned order is liable to be set aside. Wrong calculation of duty demanded - HELD THAT:- There are no discussion on this issue and therefore, the matter needs to be remanded back to the adjudicating authority to examine this aspect and allow the benefit of this amount if it has already been paid, as submitted by the appellant. Confiscation - HELD THAT:- When the issue is primarily that of classification, the confiscation cannot sustain and therefore, on that count itself, the impugned order to the extent of confiscation of impugned goods and imposition of fine is also not tenable. Penalty u/s 114A - HELD THAT:- In view of the fact that the extended period cannot be invoked in the present case, as also there is no element of fraud, suppression or misstatement, etc., therefore, the penalty under this section is not sustainable. Penalty u/s 114AA - HELD THAT:- In this case, whenever they have used a different classification than the classification which was indicated in the invoice, they knew that they are entering wrong classification in the bills of entry and therefore to that extent, the appellants knowingly and intentionally made the said entries. Their bonafide belief will not be of much help as here, it is an established fact that the classification mentioned in the bills of entry was different than the classification indicated by the supplier of the said goods. Therefore, there are no infirmity in the imposition of penalty under section 114AA. Conclusion - The goods are classified under CTH 85176290, the exemption under Notification No.57/2017 is denied, the extended period for demand set aside, penalties under sections 112(a) and 114A are dismissed, the penalty under section 114AA is upheld, and the confiscation of goods is overturned. Appeal partly allowed by way of remand for redetermination of quantum of demand. Case-Laws Customs Thu, 20 Mar 2025 00:00:00 +0530