TaxTMI 
TaxTMI 
2024 (7) TMI 1123
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.....03.2024. The impugned order was issued thereafter on 04.04.2024. 3. Learned counsel for the petitioner challenges the impugned order on multiple grounds. The first ground of challenge is that a detailed show cause notice was not issued. He submits that details of the tax proposal were only set out in intimation dated 20.02.2023 and not in the show cause notice dated 20.07.2023. His next contention is that the petitioner's reply with regard to the classification issue was not taken into consideration especially contentions relating to the General Rules for Interpretation (the "GRI") in Schedule - I to the Customs Tariff Act, 1975. After pointing out that the petitioner had classified the smart key and lock system intended for use in motor vehicles under Chapter 83, particularly sub-heading 83012000 thereof, learned counsel submits that Chapter 83 deals with locks and keys of base metal. Indeed, he submits that 83012000 deals specifically with "Locks of kind used for motor vehicles". By referring to the factual finding in the impugned order to the effect that the lock and smart key are made up of a combination of metal and plastics, learned counsel contends that Rule 3(a) wou....
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....ue. By referring to the order with regard to the said issue, he points out that reasons were recorded for concluding that the smart key and lock system of the petitioner does not qualify either as a padlock or lock under Customs Tariff 8301. In particular, he pointed out that the dictionary definitions of these two terms were set out before concluding that the expression lock and key in Chapter 83 would not extend to an electronic lock and key systems that operate without use of the base metal component of the key. 6. He next contended that principles of natural justice were not violated. In support of the contention that the order does not warrant interference for breach of principles of natural justice, learned Additional Government Pleader referred to and relied upon the following judgments: i) Bhagath Raja v. Union of India & Ors, AIR 1967 SC 1606, particularly page no.11, paragraph 15; ii) S.N.Mukherjee v. Union of India ; (1990) 4 SCC 594, particularly paragraphs 35, 36 and 39; iii) Union of India v. Mohan Lal Capoor & Ors, (1973) 2 SCC 836, particularly paragraph 28 thereof; iv) Oriental Bank of Commerce & Anrs, v. R.K.Uppal, (2011) 8 S....
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....Court in Intel Design System (India) Pvt. Ltd. v. Commissioner of Customs & Central Excise, 2008 (223) F.L.T. 135 (S.C), particularly paragraphs 4 and 5 thereof with regard to the GRI and the Explanatory Notes to HSN. By relying on Circular No.12/2022 dated 26.09.2022 of the Commissioner of Commercial Taxes, Chennai (Circular No.12/2022), learned counsel submitted that the adjudicating authorities were directed to meet each and every objection raised by the assessee in a cogent, clear and succinct manner. According to learned counsel, the impugned order falls short of these requirements. 9. The first question that falls for consideration is whether the impugned order warrants interference in exercise of discretionary jurisdiction. The judgments relied upon by learned Additional Government Pleader indicate that a quasi-judicial authority is required to record reasons. The rationale behind insisting on reasons is also set out in the said judgments. The judgments also add that such reasons need not be as elaborate as those in judgments of courts of law. By taking note of these principles, whether the order impugned herein contains reasons and whether the contentions raised by the p....
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....e said contention is liable to be accepted. Indeed, even in a court of law, not every contention raised by learned counsel is required to be or is recorded in the judgment. What would be the situation if a contention potentially has a strong bearing on the verdict, and such contention was not considered? The question to be posed on the facts of this case would be: could the result have been different if the GRI had been taken into consideration. If the answer to that question is that it would not make a difference to the verdict, non-consideration would not vitiate the decision on principles of natural justice, whereas, if the answer is that the verdict could have been different, interference would be warranted for non-consideration thereof. 13. On examining the petitioner's reply and Rules 3(a) and 3(b) of the GRI, it is a distinct possibility that the outcome could have been different if such rules had been considered. In addition, although the order refers to the Explanatory Notes to HSN, there is no discussion thereon. Prima facie, these notes indicate that electrically operated locks, including those operated by radio-wave signal, fall within the scope of CTH 8301.20. ....