TaxTMI 
TaxTMI 
2025 (2) TMI 639
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....ts of e-Scooty' at Inland Container Depot, New Delhi. During the course of post-clearance audit by the Audit Commissioner, it was observed that the appellant had declared imported goods as 'spare parts of e-Scooty' and classified the same under CTI 8708 99 00. The audit officers observed that Chapter Heading [CTH] 8708 covers parts and accessories of goods of CTH 8702 to 8704 and does not include two wheeled electric vehicles, namely motorcycle, moped and scooty and as per the Tariff Act, two wheeled electric vehicles and parts thereof are appropriately classifiable under CTH 8711 and CTH 8714, respectively. The audit officers also observed that HS Code of the items in question was mentioned as CTH 8711 60 in the Bill of Lading pertaining to Bill of Entry dated 31.10.2020, which had been uploaded on e-Sanchit, whereas the appellant had classified the said item under CTI 8708 99 00. It, therefore, appeared to the audit officers that the appellant had mis-classified the impugned items under CTI 8708 99 00 and the items appeared to be correctly classifiable under CTI 8700 60 20. Consequently, basic customs duty appeared to be payable @100% in addition to social welfare surcharge [SWS]....
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....hand has denied the allegation of the department in totality and has relied on a number of case laws." 7. After referring to the provisions of rule 2(a) of the General Rules of Interpretation [GRI], the Principal Commissioner observed as follows: "39.2 A perusal of above shows that any reference to complete goods also includes incomplete or un-finished goods, if such incomplete or un-finished goods have the essential characteristics of finished goods. [First part of rule 2(a)]. The heading will also include finished goods removed un-assembled or disassembled i.e., in SKD or CKD packs. [second part of Rule 2(a)]" Submissions of the appellant 8. Learned counsel for the appellant has made the following submissions: (i) The appellant had imported various parts of e-Scooty and classified them under CTI 8708 9900 and paid BCD at the rate of 15%. There is no dispute regarding the SWS and IGST. The audit officers observed that Chapter Heading 8708 covers parts and accessories of goods falling under Chapter Heading 8702 to 8704 but does not include two wheeled electric vehicles viz motorcycle, moped, scooty etc., which are classifiable under chapter hearing 8711 a....
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....firming the duty on the ground that the appellant had not claimed this exemption notification in the Bill of Entry. The substantive benefit of the notification should not have been denied even if it was not claimed in the Bill of Entry. (vi) The reason the appellant had not claimed the benefit of this notification in the Bill of Entry is that it was claiming a different classification and it was not claiming the classification under CTI 8711 6090. If the Principal Commissioner decided to reclassify the goods under this CTI, it is NOT open to him to deny the unconditional notification to which it was entitled. (vii) Even if the classification of the imported goods is changed, it cannot attract confiscation of the goods under section 111(m) of the Act. Consequently, there cannot be any penalty under section 112(a) (ii). (viii) The impugned order confirmed and the SCN proposed the demand invoking extended period of limitation but they have not established any element of collusion, mis-statement or suppression of fact. In fact, the goods were cleared after examination of goods by the officers. (ix) In view of the above, the appeal may be allowed and ....
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....(a) Can more than one Bill of Entry be assessed together to determine the classification of the goods? (b) Can the goods imported under the 26 Bills of Entry be considered as e-scooter in disassembled and unassembled state in the facts of this case? (c) Did the Commissioner correctly deny the benefit of the unconditional exemption Notification No. 50/2017-Cus as amended available to goods falling under CTH 8711 on the ground that the appellant had not claimed it in the Bills of Entry? (d) Was the Commissioner correct in holding the goods were liable for confiscation under section 111(m) of the Customs Act for alleged wrong classification and the consequently imposing penalty under section 112(a)(ii) of the Customs Act? Assessment of several Bills of Entry together 12. The first question to be answered is whether two or more Bills of Entry Bills can be assessed together to determine the classification of the goods, and demand differential duty or otherwise. To answer this question, we must examine the legal provisions relating to the Bills of Entry and assessment. 13. Section 46 of the Customs Act requires the importer to 'make an entry' of the im....
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....reof by presenting electronicallyon the customs automated system to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed: Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically on the customs automated system, allow an entry to be presented in any other manner: Provided further that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. (3)....
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....s through customs, he has to file a Bill of Entry. Once a Bill of Entry is filed, the proper officer can clear them for home consumption as per section 47 if he is satisfied that the imported goods are not prohibited goods and that if duty has been paid. 15. The importer who wants to clear imported goods must file a Bill of Entry (under section 46) and also self-assess the duty payable (under section 17) and the proper officer can re-assess the duty and if the proper officer who is authorised to give clearance under section 47 (or out of charge) is satisfied that the goods were not prohibited goods and the duty has been paid, he can give an order clearing them for home consumption. 16. In assessing any tax, there is, among other things, a unit of assessment. For instance, income tax is assessed on the income earned during the financial year. If 'A' has substantial income which is taxable under the highest bracket of income tax during a financial year, he will be taxed accordingly. If next year, he has very little income, he will be taxed accordingly - at low rates or nil. The income in the second year cannot be treated as if it is the income in the first year and taxed at a h....
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....6 of the Annexure A to the SCN, the allegation is that several sets of 53 goods were imported. However, the SCN does not list the goods which were imported under this Bill of Entry nor does it show how the imported goods are sufficient to attract GRI 2(a) to classify them as e-Scooty. 23. In respect of the other 25 Bills of Entry, even such justification that several sets of goods were imported under each Bill of Entry and each set of which would constitute an e-Scooty as per GRI 2(a) is not in the SCN. 24. In the impugned order the classification of the imported goods was changed from parts of e-Scooty to e-Scooty itself by applying GRI 2(a). However, it is not indicated as to how in each of the Bills of Entry the goods imported itself would be sufficient to consider them as e-Scooty applying GRI 2(a). 25. We, therefore, find that the Commissioner erred in classifying the parts of e-Scooty imported by the appellant as e-scooter as there is no evidence to established that in each of the Bills of Entry equal sets of parts were imported and that those sets of parts constitute the complete e-Scooty. 26. For the aforesaid reasons, the classification of the goods imported un....
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....t, the charging section, begins with the exception clause "except as otherwise provided in this Act or any other law..". The effect of an exception clause has been explained by Justice G.P. Singh in his seminal book [G P Singh Principles of Statutory Interpretation, 15th Edition, page 164] on statutory interpretation as follows: "A distinction is said to exist between provisions worded as "proviso", "Exception" or "Savings clause". "Exception" is intended to restrain the enacting clause to particular cases; "Proviso" is used to remove special cases from the general enactment and provide for them specially; and "Savings clause" is used to preserve from destruction of certain rights, remedies or privileges already existing." 32. Thus, section 12 of the Customs Act levies duties at such rates as may be specific into the Customs Tariff Act, 1975, except as otherwise provided in this Act or in any other law for the time being in force. Thus, this section deals with two types of situations as follows: (a) Where it is not otherwise provided in the Customs Act or any other law - duties should be charged as specified in the Customs Tariff Act, 1975 (b) Where it....
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....t although the obvious thing to claim while self-assessing duty in the Bill of Entry is to enter the notification number in the Bill of Entry. However, even if the importer has not claimed it at the time of filing the Bill of Entry, it will still be entitled to the benefit of an unconditional exemption notification. The benefit cannot be denied and duty cannot charged at the tariff rate for several reasons. Firstly, if the duty is exempted by the Central Government in public interest an adjudicating authority cannot pass an order against the public interest determined by the Central Government. Secondly, neither section 25 of the Customs Act nor the notification requires an importer to claim the notification to be eligible to its benefit. Thirdly and most importantly, the charge of duty under section 12 of the Customs Act will be only to the extent of tariff rate read with the exemption notification because once a notification is issued under section 25, such goods fall under the exception clause of section 12 and it is not for the adjudicating authority to charge duty beyond what is provided in section 12. 37. We now proceed to examine the notification itself. It reads as ....
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....rs, and side cars, if imported, - (1) As a knocked down kit containing all the necessary components, parts or sub-assemblies, for assembling a complete vehicle, with,- (a) disassembled Battery Pack, Motor, Motor Controller, Charger, Power Control Unit, Energy Monitor Contractor, Brake system, Electric Compressor not mounted on chassis; (b) pre-assembled Battery Pack, Motor, Motor Controller, Charger, Power Control Unit, Energy Monitor Contractor, Brake System, Electric compressor not mounted on a chassis or a body assembly (2) in a form other than (1) above 15% 25% 38. It is evident that the above notification (S. No. 531A) does not come with any conditions nor does it require the importer to claim it in the Bill of Entry for it to be entitled to its benefit. Tax laws and notifications must be strictly construed and there is no scope for intendment or reading any words into them. Since neither section 25 of the Customs Act nor the notification requires an importer to claim the benefit as a pre-condition, the benefit of the notification has been wrongly denied by the Principal Commissione....
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....17(1) of the Customs Act. 44. The definition of the assessment under section 2(2)of the Act is as follows; 2. Definitions.-In this Act, unless the context otherwise requires,- ........ (2) "assessment" means determination of the dutiability of any goods and the amount of duty, tax, cess or any other sum so payable, if any, under this Act or under the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act) or under any other law for the time being in force, with reference to - by Finance Act, (a) the tariff classification of such goods as determined in accordance with the provisions of the Customs Tariff Act; (b) the value of such goods as determined in accordance with the provisions of this Act and the Customs Tariff Act; (c) exemption or concession of duty, tax, cess or any other sum, consequent upon any notification issued therefor under this Act or under the Customs Tariff Act or under any other law for the time being in force; (d) the quantity, weight, volume, measurement or other specifics where such duty, tax, cess or any other sum is leviable on the basis of the quantity, weight, volume, measu....