TaxTMI 
TaxTMI 
2024 (5) TMI 336
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.... limitation under section 28(4) of Customs Act for demanding customs duty demand and has also proposed penalty. 1.2 During the period from FY 2018 to FY 2020 (Annexure-1) appellants have imported stainless steel coils and classified under CTH 7220 90 22. The Appellant have claimed benefit of the exemption from customs duty under Sl. No. 734 of the Notification No. 50/2018-Cus dated 30.06.2018 on imports of the subject goods. The composition of imported goods is as under-. Elements Symbol Composition % Nickle Ni 1.010-1.060 % Chromium Cr ≥12.5 Carbon C ≤0.14 Manganese Mn ≥9 Sulfur S ≤0.03 Phosphorus P ≥0.03 Silicon Si ≤1 Copper Cu ≥0.5 1.3 It is the case of the department that the Appellant has misclassified the subject goods under CTH 7220 90 22 as subject goods doesn't have the sufficient amount of nickel content to be classified as Nickel-Chromium Austenite Steel. According to department to qualify as nickel austenitic stainless steel the nickel content should be ranging from 4.5% to 12%. Since in the present case nickel content is approx. 1%, according to department im....
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....itic stainless steel‟ which can have nickel content as low as 0.20%.As per IS standard 15997; 2012 as amended N1 to N6 series of grade which are treated as nickel austenitic stainless steel for which the nickel content needs to be 1% to 6% and further for N4, N5, N6 series it can have Nickel from 0.20% to 0.95%. 2.2 Ld. Commissioner of customs has in the impugned order has also relied upon copper content and held that since the copper content in the subject goods is ranging from .80% to .85% only which is less than 1.5% as provided in N1, N2, N3 grade. Thus on that basis Ld. Commissioner of customs has held that subject goods are not nickel austenitic stainless steel. It is submitted that impugned order has gone beyond the SCN to that extent. 2.3 In any case, it is submitted that Ld. Commissioner of customs has ignored the other grade of nickel austenitic stainless steel such as N5, N6, N7 provides that the Nickel (Ni) content 0.20% to 0.95% and Copper (Cu) content 0.4% to 2.5%. Thus, it is submitted that as per the Bureau of Indian Standards (BIS), even Nickle with 1% or less than 1% and copper with .80% is classified as Austenitic Steel. It has following chemical comp....
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...., demand is barred by limitation. He further submits that the claim of classification or claim of exemption cannot be treated as mis-declaration as the issue relates to interpretation of law. In this regard he placed reliance on the case of Daxen Agritech India Pvt. Ltd. 2023 (12) TMI 1080 (Tri. Del.), Commissioner of Customs Hyderabad vs Riddi Siddhi Bullions Ltd. 2017 (355) ELT 585 (Tri. Hyd.), Granite India Limited 1997 (92) ELT 84 (Tri. Mad.). He also submits that the subject goods are not liable for confiscation under Section 111(m) of the Customs Act, 1962, therefore, redemption fine is not imposable. 3. On the other hand, Shri Tara Prakash, Learned Deputy Commissioner (Authorized Representative) with Shri P. Ganesan, Learned Superintendent(Authorized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records. 5. We find that in the entire case there is no dispute about the fact such as the nature of goods, documentation etc. The whole case was made out for change of classification on the basis that the 1% Nickel content in the product....
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....lled austenitic stainless steels together with 300 series grades). With this specific clarification, it is seen that in austenitic stainless steel, the Nickel content can vary as low as 0.2% to 14%, whereas in the present case the goods contain 1.010-1.060% and Chromium is 12.5%, therefore, it is clearly in compliance to the specification for classifying the product as „Austenitic Nickel Chromium Stainless Steel‟. We find that department's reliance on the websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited cannot be a conclusive factor to classify the product as other than Austenitic Nickel Chromium Stainless Steel for the reason that from the said evidence it is clear that not only those products which contain 4.5% to 12% Nickel will fall under Austenitic Stainless Steel but even the low content Nickel in Stainless Steel will also fall under Austenitic Stainless Steel. Therefore, the mere reliance on the websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited is incorrect for arriving at classification. Therefore, on the fact of the case which is not under dispute and on the authority mainly Indian....
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.... DaxenAgritech India Pvt. Ltd. vs Principal Commissioner of Customs, New Delhi [2023-TMI-1080-CESTAT-DEL] 9. The next question which arises in the present appeal is the invocation of the extended period of limitation under section 28(4) of the Act. The submission of the learned Counsel is that the issue of classification of the products in question was within the knowledge of the department at the time of clearing of the subject goods at the relevant time of imports as the department itself had filed an appeal against the Order-in-Appeal dated 17.02.2014 before the Tribunal and therefore the allegations of suppression are not made out and so the extended period of limitation cannot be invoked. The learned Authorised Representative for the revenue have submitted that the period of limitation has been rightly invoked and cited several judgements in support thereof. 10. We find that show cause notice was issued on 2.7.2018 for the period 03.07.2013 to 03.03.2018, covering several bills of entries as given in Table-A above which is per Annexure-A to show cause notice. In the appeal filed against the first assessment order dated 27.07.2012, the Commissioner (Appeals) v....
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....ls of entry, the importer and the appellant were correct in classifying the goods as per order of the Commissioner (Appeals) and the officers were correct in clearing the goods for home consumption accordingly. The Principal Commissioner is in error in holding in the impugned order that the importer and the appellant (in importer‟s behalf) should have filed bills of entry contrary to the order of the Commissioner in good faith. 12. There is a well established practice in the department to deal with cases with the order which holds the field is against the revenue and an appeal is pending with the superior court or Tribunal. SCN are issued periodically to protect revenues interest and they are transferred to the call book which are then decided after the order of the superior Court or Tribunal is received. In these bills of entry also, after the order of the Commissioner (Appeals), SCNs could have been issued and transferred to Call Book and decided after this Tribunal passed the final order. However, until the final Order of this Tribunal was issued, the order of Commissioner (Appeals) was binding both on the importer and the officers." 11. The aforesaid obs....
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.... to June, 2012, which is clearly beyond the normal period of limitation. Therefore, although Revenue is correct on merits, the demand is time barred and, therefore, cannot sustain. For the same reason, the penalties imposed upon the appellant under Sections 77 and 78 also cannot be upheld." 13. The Supreme Court in Nizam Sugar Factory 1995 (78) ELT 401 has categorically laid down that where facts are known to both the parties, the omission by one to do what he might have done, and not that he must have done, does not render it suppression. Thus when all the facts are before the department as in the present case then there would be no wilfulmis-declaration or wilful suppression of facts with a view to evade payment of duty. The relevant para from the judgement in Nizam Sugar Factory (supra) is quoted below:- "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of fa....
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....normal period." Granite India limited vs Collector Central Excise, Coimbatore - 1997 (92) ELT 84 (Tri. - Mad.) "6. We have considered the submissions of both the sides. We find that in order to constitute a wilful suppression, there must be the material to show that the appellant knowing fully well that he was required to furnish a particular fact to the Department, failed to furnish the same with an intention to evade payment of duty. In this case, it is seen that there are divergence of views as to whether this activity carried out by the appellant amounts to manufacture or not. It is also seen that when this decision of the Collector (Appeals) was taken up before the Tribunal, the Tribunal while holding against the assessee took note of an earlier decision of the Tribunal reported in 1995 (80) E.L.T. 145. In that decision, one of the member in fact had held that this does not amount to manufacture as could be seen from Para 5 of the abovesaid order. Para 5 of the order reads as follows : - 5. We have considered the submissions made by both sides with reference to the facts and perused the records. We also take note of the submissions made by the appell....
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....in the last line in Para 14, the Tribunal has observed that "we may note that the consultant for the appellants also did not put forward any serious arguments in this regard before us." Hence, the facts and ratio are distinguishable as it was rightly considered in the case of Associated Stone Industries. It is further seen that the Karnataka High Court in the case of M/s. Foredg Granite Pvt. Ltd. v. State of Karnataka also held that this activity does not amount to manufacture. In these circumstances, the appellants certainly had grounds to entertain a bona fide belief that the goods were not excisable. We, therefore hold that for this reason, it cannot be said that there was a wilful suppression on the part of the appellant. 7. In regard to valuation, it is seen that the District Industrial Officer had given a certificate and the appellants were guided by the abovesaid certificate while declaring that the value of the plant and machinery is below Rs. 20 Lakhs. With respect to the imported machinery certain items were shown as surplus and spares. Therefore, they had not taken the same into reckoning on the bona fide belief that the value of the same is not require....
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....strip for manufacture of utensils and kitchen appliances. 2 REFERENCES The following standards contain provisions which through reference in this text, constitute provisions of this standard. At the time of publication, the editions indicated were valid. All standards are subject to revision and parties to agreements based on this standard are encouraged to investigate the possibility of applying the most recent editions of the standards indicated below: IS No. 228 (in various Parts) 1387: 1993 1608 : 2005/ ISO 6892: 1998 1762 (Part 1): 1974 1956 (Part 4): 1975 10175 (Part 1): 1993/ISO 8490: 1986 Title Methods for chemical analysis of steels General requirements for the supply of metallurgical materials (second revision) Metallic materials - Tensile testing at ambient temperature (third revision) Code for designation of steels: Part I Based on letter symbols (first revision) Glossary of terms relating to iron and steel: Part 4 Steel sheet and strip Mechanical testing of metals - Modified Erichsen cupping test - Sheet and strip: Part 1 Thickness up to 2 mm (f....
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.... (11) (12) NI 0.12 0.75 8.5-10.5 1-2 N2 N3 0.10 0.09 1.00 0.75 14.5-16.0 0.03 6.5-9.0 1.5-3.5 15.5-17.0 0.03 6-8 4-6 16.0-17.5 0.03 0.08 1.5-2.5 0.08-0.2 0.07 2-4 0.10-0.25 0.07 1.5-2.5 iii) X8Cr16Mn7Cu2Ni4N 0.05-0.15 NOTE Elements not specified shall not be intentionally added to the steel without the agreement of purchaser except for the finish of the cast. All precautions must be taken to avoid addition of elements from scrap metal and raw material used in production of elements likely to affect Mechanical characteristics as well as the suitability for use of steel for utensils. Table 2 Permissible Variation Between Specified Analysis and Check Analysis (Clauses 8.1.1 and 10.1) Element Permissible Variation in Product Analysis, Percent SI No. (1) (2) (3) i) Carbon +0.01 Silicon +0.05 Manganese ±0.06 Nickel ±0.07 Chromium Sulphur Phosphorus viii) Copper ix) Nitrogen NOTE ±0.20 +0.005 +0.01 ±0.10 10.01 In one cast the deviation may occur over the upper value or under the low....
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....less Steel in Indian Standards b) Austenitic stainless steels and other Category of Stainless Steel c) Classification of categories of stainless steels in HS Codes and its applicability in line with Indian Standards. a) Classification of Stainless Steel in Indian Standards There are three basic raw material standards for stainless steel sheet, strips and plates such as: IS 6911 (For general use) IS 5522 (for utensil and cookware) IS 15997 (for utensils and cookware) In the standard IS 6911 there are four separate categories of stainless steel mentioned Austenitic stainless steel - All 200 series, 300 series together Ferritic Stainless Steel - of 400 series type Martensitic Stainless Steel - of 400 series type Duplex Stainless Steels - Of duplex variety In standard 5522 austenitic 300 series and ferritic 400 series are covered In standard IS 15997 austenitic stainless steel of low nickel variety are covered Please see Annexure 1 (ATTACHED) to see excerpt of austenitic stainless-steel range covered in Indian Standards b) Austenitic stainless steels and other Category of Stainless Steel Austenitic stainless steels are variety of stainless steel alloys having Face C....