AI Drafter 
TaxTMI 
TaxTMI 
2024 (3) TMI 137
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....er examined by the officers of SIIB in the presence of the Customs Broker and found that motors were packed in one box and the shafts were packed in another box separately. The 'user manual' retrieved from the box described the goods as 'grass trimmer/brush cutter'. Investigation was initiated on the classification of said products. After recording the statements, analyzing the catalogues etc., and on completion of said investigation, a show cause notice was issued to the appellants on 14.11.2014 alleging that the products imported namely 'brush cutters' are classifiable under CTH 8467 8990 and not under CTH 8432 2990 as claimed in the respective Bill of Entry. The appellants accepted the said classification and discharged duty with interest amounting to Rs.49,72,134/- for the period from 18.01.2014 to 30.09.2014 under protest classifying the products under CTH 8467 8990. Further investigation revealed that similar goods were imported in the past by the appellants and consequently, demand notice was issued for the period from 18.11.2009 to 28.11.2013 demanding differential duty of Rs.93,37,120/- with interest and penalty with proposal for confiscation. Hence the preset appeals. ....
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....nce of show cause notice and the same is not disputed by the Department and in cases where the duty is paid with interest, then show cause notice should have not issued; also, in such cases, penalty is not imposable on the assessee. 3.2 She has further submitted that the show cause notice invoking extended period of limitation and confirmed by the Commissioner is not sustainable in-as-much-as the appellants have neither indulged in any suppression nor mis-declared the description of the imported goods with an intent to evade payment of duty. She has submitted that the appellants are importing the goods from November 2009 onwards classifying the same under CTH 84322990 of CTA,1975. The appellants have been filing all the required documents such as bills of entry, supplier invoices, packing lists etc. and they have not mis-declared the description of the imported goods in all the documents including bills of entry, which are correctly described as 'brush cutters' and the same have not been disputed by the Department. The imported goods have been duly examined and assessed by the Customs Officers and assessment orders have been passed accordingly. She has further submitted that ext....
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....rect classification of the goods under CTH 8467. 5. Heard both sides and perused records. 6. The issues involved in the present appeals for determination are, whether: (i) the imported goods namely 'brush cutters' classifiable under CTH 8432 2990 or under CTH 8467 8990 of the Customs Tarriff Act, 1975; (ii) demand could be confirmed invoking extended period of limitation for the past period 18.11.2009 to 28.11.2013 and (iii) penalty imposable on the appellants. 7. The appellant in their reply dated 14/5/2015 before the Commissioner submitted that they are not contesting the classification of the product, brush cutter, on merit, but contested the invoking of extended period of limitation. In the finding, the Commissioner recorded that the appellant has accepted the re-classification of the goods under CTH 8467 and the dispute is only for the demand invoking extended period. However, the Commissioner proceeded to discuss the classification on merit and also the demand for extended period. In the grounds of appeal, the appellant agitated the classification and during the course of argument the Advocate for the appellant also raised the issue on merit as well as on limitation.....
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....r bars for tractor mounting u 7.5% - 84333000 - Other haymaking machinery u 7.5% - 84334000 - Straw or fodder balers, including pick-up balers u 7.5% - - Other harvesting machinery; threshing machinery : 84335100 -- Combine harvester-threshers u 7.5% - 84335200 -- Other threshing machinery u 7.5% - 84335300 -- Root or tuber harvesting machines u 7.5% - 84335900 -- Other u 7.5% - 843360 - Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce : 84336010 --- Machines for cleaning u 7.5% - 84336020 --- Machines for sorting or grading u 7.5% - 84339000 - Parts kg. 7.5% - 8467 TOOLS FOR WORKING IN THE HAND , PNEUMATIC HYDRAULIC OR WITH SELF- CONTAINED ELECTRIC OR NON-ELECTRIC MOTOR - Pneumatic : 846711 -- Rotary type (including combined rotary percussion) : &nb....
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.... or by a vehicle (e.g. a tractor), or may be mounted on a vehicle (e.g. on a tractor or horse-drawn chassis). (In this context "tractor" includes "pedestrian controlled tractor") (emphasis supplied) 8.2 ------- 8.3 As per Explanatory Notes, the goods covered under Chapter 8433 are described as follows: "The heading covers machines used in place of hand tools, for mechanical performance of the following operations: ----- ----- The provisions of Explanatory Heading 84.32 apply, mutatis mutandis, to this heading, e.g., in respect of tractors fitted with harvesting, threshing, mowing or other interchangeable attachments, and in respect of motor rakes. (emphasis supplied) The heading includes (1) Lawn Mowers, whether worked by hand or motor driven. They may have a cutter bar like agriculture mower, rotary blades which cut the grass against a fixed horizontal blade, or rotating disc with knives on outer edge. (2) Mowers (including Motor mowers) for cutting hay etc. They usually consist of a horizontal cutter bar and sections which cut by oscillating action of teeth between the fingers of cutter bar, or they ....
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.... (rigid or flexible) and a tool holder, presented together with various interchangeable cutting tools for mounting in tool holder." 12. On a plain reading of the relevant Tariff Entry and said explanatory notes under CTH 8432/8433 and 8467, it is clear that the products mentioned under CTH 8432/8433 are referring to 'machineries'; 'hand tools' fall outside the scope of said entries; whereas hand tools explained in the explanatory note under CTH 8467 at sr. no 18 & 19 includes 'brush cutters', hence the product in dispute would fall under CTH 8467. The use of the product for Agricultural purpose cannot be the criterion for determination of the appropriate classification. It is held by the Hon'ble Supreme Court in the case of M/s O.K. Play (India) Ltd vs CCE - 2005 (180) ELT 300 (SC) that use of an article as 'Toys' by children would not place in classification under 'Toys'. It has been held in a series of cases that the explanations for classification of particular product mentioned in the HSN cannot be brushed aside in determining the correct classification of a product. The Hon'ble Apex Court in CC, Bombay Vs. Business Forms Ltd. - 2002-TIOL-277-SC-CUS-LB held as below: ....
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....rush cutters' is correctly classifiable under CTH 8467 8990 of CTA,1975. 13. The next issue for consideration is whether the extended period of limitation can be invoked for demanding duty pertaining to past clearance of the imported 'brush cutters' for the period 18.11.2009 to 28.11.2013. Resisting the confirmation of duty invoking extended period of limitation, the appellants have submitted that all the facts have been disclosed to the Department and the goods have been examined and assessed and thereafter, cleared by the Customs Department; they have enclosed examination report by the Customs Department in the appeal paper book (page 121 to 126). Hence, the allegation of suppression cannot be sustained. In their reply to the show cause notice, explaining the facts declaring classification of the similar goods in past under CTH 8467 8990, it has been submitted that since it was imported along with other products, therefore, the mistake could have occurred on their part in declaring the product brush cutter under CTH 8467. Further, they have stated that it is only in the case of imports from Singapore supplier, the classification of 'brush cutter' was mentioned in the invoice a....