TaxTMI 
TaxTMI 
2016 (2) TMI 1150
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....rate of Revenue Intelligence, Mumbai Zonal Unit ('DRI' for short), answerable to the Commissioner of Customs (Port), Customs House, 15/1, Strand Road, Kolkata - 700 001 & Commissioner of Customs (Port - Import), Chennai-V, Customs House, 60, Rajaji Salai, Chennai - 600001 (hereinafter referred to as 'the jurisdictional Commissioners' for short). 2.1 As per the SCN, DRI had got an intelligence that the applicant company had evaded Customs duty on imports of poultry/fish/shrimp feed making machinery and other related equipment and accessories for feed manufacturing plant by declaring them as poultry keeping machinery or machinery for preparing animal feed, stuff etc. 2.2 The SCN alleges that the applicant cleared six consignments of machinery by declaring and classifying the goods as under :- Sl. No. Bill of Entry No. and date Declared description of goods Port of import Customs Tariff Item Customs Excise Item 1 6313079, dated 2-8-2014 Poultry keeping machinery (supply of poultry feed, extruding fish feed, shrimp feed project) Kolkata 84362900 84362900 2 6424430, dated 13-8-2014 Poultry keeping machinery (supply of poultry ....
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....85 (subsequently amended as Rs. 3,14,40,182 vide corrigendum dated 23-4-2015, which has not been paid due to wilful misstatement should not be demanded and recovered under provisions of Section 28 of Customs Act, 1962 along with interest under Section 28AA. (iii) Goods of the declared CIF value, as indicated against respective entries in Column B, totally amounting to Rs. 25,83,64,715 should not be held liable for confiscation under Section 111(m). (iv) Penalty under Section 112(a) or Section 114A should not be imposed on the applicant for their wilful acts and omissions, as discussed above. (v) The amount of Rs. 3,42,87,491, voluntarily paid by the applicant during investigation should not be appropriated towards the aforesaid Customs duties, interest and any other dues payable by the applicant on their imports. 4. In the application for settlement, the applicant have admitted the duty liabilities, interest as demanded in the notice and that they made voluntary payments of Rs. 3,06,11,175 & Rs. 41,71,084 (total Rs. 3,47,82,259) towards their duty and interest liability pertaining to imports made at Kolkata & Chenn....
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.... they have accepted the classification as made by the department. 6.2 Application for Settlement filed in the Chennai Bench, pertaining to the imports made at Chennai Port was transferred to this Bench by the Hon'ble Chairperson on 12-8-2015 and the same was received on 9-9-2015. 7. In his report dated 27-10-2015, the Pr. ADG, DRI, MZU, reiterated the modus operendi of the applicant, as mentioned above, for short and non-payment of Customs Duty. The Revenue has contested the settlement of the case on the following grounds :- (i) As per the case of Indirama Synthetics (India) Ltd. v. Union of India [2013 (290) E.L.T. 208 (Bom.)] the Settlement Commission is not a case where one can challenge the SCN on merits. (ii) Further, the classification cited by the applicant in view of the various Court judgments is not tenable. 8. However, they do not have any objection to the settlement of the matter subject to:- (i) Confirmation of duty and interest, as demanded by the SCN, which has been voluntarily deposited by the applicant. (ii) Imposition of appropriate f....
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....sification of the imported goods, no immunity from penalty and prosecution should be granted. 10.1 The Bench has considered the relevant records including oral and written submissions made by the applicant and the revenue. The applicant had imported machineries through Kolkata Port (5 Bills of Entry) and Chennai Port (1 Bill of Entry) classifying the goods under Chapter Heading 8436, whereas according to the Department, The machineries imported through Kolkata Port are classifiable under CTH 8479 and those imported through Chennai Port are classifiable under CTH 9406. The goods are also classifiable under CETH 8479 and 9406.The misclassification resulted in short payment of duty because there is no C.V. Duty under 8436, whereas C.V. Duty @ 10% is leviable under 8479 and @ 12% under 9406. Consequently, there was short payment of duty along with applicable interest. During the course of investigation, the applicant deposited certain amounts towards duty and interest. 10.2 Though the short payment of duty is on account of wrong classification of the goods, claimed by the applicant, yet in the settlement application the applicant has accepted the classification of goods....
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....for the purpose of classification, in the tariff, intended use is not a requirement. However, as per HSN Explanatory Notes, if the goods are for industrial use, the classification is 8479, instead of 8436. The Bench finds that the applicant is a regular importer and is supposed to be aware of importance of HSN Explanatory Notes in the matter of classification. As such, there is a lapse on the part of the applicant to this extent and therefore the provisions of Section 111(m) and consequently Section 112(a) of the Customs Act are attracted. However, the allegation of wilful misstatement or suppression of facts is not sustainable so as to attract the provisions of Section 114A. The Bench also observes that the SCN has not invoked Section 114AA. 10.6 Regarding the short payment of interest and duty, as intimated by Commissioner of Customs, Kolkata in his report dated 10-12-2015, the applicant was asked under the Commission's letter dated 2-2-2016 to offer his comments. The applicant in his reply dated 10-2-2016 has intimated that they have paid the differential Customs Duty amounting to Rs. 1,57,280/- and interest amounting to Rs. 17,358/- and submitted copies of T....