TaxTMI 
TaxTMI 
2024 (1) TMI 465
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the imported goods during the course of assessment, it was observed by the officer that the goods imported namely "Flanges" under the above Bill-of-Entry were wrongly classified under Customs Tariff Item No. 85030090/84839000 instead of Customs Tariff Heading (CTH) 7307, which attract BCD @ 10% and IGST @ 18%. 2.1 It appears that there was a Pre-consultative Notice dated 21.10.2022 to the importer and the importer responded through its letter dated 07.11.2022, but however, it appears that the Additional Commissioner issued a Show Cause Notice dated 09.11.2022 thereafter, by ignoring the reply of the importer to the Pre-consultative Notice. The proposals in the Show Cause Notice were: - a. Rejection of the classification adopted by the importer for the goods in question under CTH 8503 and re-classifying the same under CTH 7307 which attracts BCD @ 10%, SWS @ 10% and IGST @ 18%. b. Demand of the differential duty amounting to Rs.10,88,434/- under Section 28(1) of the Customs Act, 1962. c. Demand of interest on the short-levied duty under Section 28AA of the Customs Act, 1962. d. Confiscation of the imported goods valued at Rs.3,35,42,154/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....require various specially designed parts and components including flanges, and since the goods manufactured by them were clearly classifiable under CTH 8503 alone, they believed in good faith that the flanges so imported did also fall under CTH 8503 as they were to be used in the manufacture of the above final products. 8. The disputed classifications under both Customs Tariff Headings read as under: - CTH 7307: 7307 TUBE OR PIPE FITTINGS (FOR EXAMPLE, COUPLINGS, ELBOWS, SLEEVES), OF IRON OR STEEL - Cast fittings: 7307 11 -- Of non-malleable cast iron: 7307 11 10 --- Sponge iron cast fittings kg. 10% 7307 11 20 --- SG iron cast fittings kg. 10% 7307 11 90 --- Other kg. 10% 7307 19 00 -- Other kg. 10% - Other, of stainless steel: 7307 21 00 -- Flanges kg. 10% 7307 22 00 -- T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reasonable belief, the reason for which is very conspicuously absent. Prima facie, therefore, it appears that the original authority's apprehensions are not well-founded. This is also clear when at paragraph 17, the said authority has recorded that to the Pre-consultative Notice the importer did not file any reply, which is not the correct fact. 9.2 Further, the importer appears to have relied upon various judicial precedents, which though duly recorded, but however, no finding is given by the said authority on the applicability or otherwise of the same. When the importer has claimed that the flanges imported by it were specifically designed to suit in its industry/purpose, what was required was to examine the issue from that angle, since primarily, such examination was to be done to satisfy if the declaration / admission of the importer to that extent was correct, but however, it appears that there is not even an attempt in this regard by the original authority. He has only proceeded generally, as could be seen from paragraph 23, wherein he has taken a leap to the explanation from the Chapter Note, to hold that 'it was evident for him' that the flanges in question were not cove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or specific purpose as claimed by the appellant. 10.3 Moreover, it is also not the case of the Revenue that these flanges are not for any specific purpose as claimed by the appellant. It is relevant since, when a dispute arises based on the end-use/function, then it has to be ascertained/established that the goods in question are capable of performing multiple functions, or, at least capable of performing such functions as the items specified under the Chapter are capable of. This exercise has not at all been done by the Revenue. 10.4 Further, there is no dispute that in the matters of classification, identification of an entity is the primary step, and the identification is concerned with the goods and not with description of the goods. The description would be relevant for the application of a particular tariff entry and in several cases, a single tariff refers to a large number of goods of different types. Thus, the titles of sections, chapters and sub-chapters are looked into, for ease of reference. Further, as observed by the adjudicating authority at paragraph 15 of the Order-in-Original, "classification of imported goods under the first schedule of the Customs Tariff A....