AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 608
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Directorate of Revenue Intelligence (DRI), allegedly indicated that HMIL was resorting to misclassification of various goods imported for manufacture of automobiles, in order to avail undue benefit of BCD exemption vide Notification No. 152/2009- Customs dated 31/12/2009 as amended. They visited HMIL's premises and made enquiries. Thereafter, HMIL vide their letter dated 10/02/2020 informed DRI that they have reviewed the classification adopted in respect of certain Bills of Entry (BE), details of which were also given, and had found that the classification assigned by them was not consistent in some of the cases with the nature of the products and as the Country of Origin (COO) Certificates with the inconsistent codes had already been filed, they intend approaching the suppliers to revise the HS codes and issue the COO for the respective Bills of Entry retroactively as provided under the India-Korea CEPA. Further, the importer also informed the voluntary payment of differential duty and interest, in respect of some products and attached a copy of TR-6 challan paid at Chennai Customs. 2.2 Two Show Cause Notices (SCN) were issued to HMIL. SCN No. 56/2023 dated 14/06/2023 mainl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3,89,450/- relates to 5 items only covered by 118 BE's which were finally assessed, of which HMIL does not accept the classification of any item as classified by the department. 4 of these 5, are ECU's with different part numbers and 1 is a ECU Coding System. No separate examination and discussion has been made for the ECU Coding System. HMIL paid the duty amount of Rs.59,56,35,048/- for the period from 04/03/2020 to 11/03/2022 during the investigation vide TR6 challan dated 05/04/2022. The remaining 8 items pertain to provisionally assessed BE's. Though the goods have been classified no demand has been raised on the same as these items are still provisional, HMIL has hence not replied to the classification of these goods. 5. We now take up the issues under dispute jointly for discussion and resolution. The main issues involved are whether, A) the classification of the goods pertaining to provisionally assessed BE's has been done without the authority of law. B) it is legal and proper on the part of the AA in not confiscating and imposing a redemption fine in respect of the impugned goods provisionally assessed and cleared under a bond and in not imposing a pen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sionally assessed goods in the impugned order is bad in law. 6.2 Per Contra revenue has stated that in the subject case some Bills of Entry were assessed provisionally pending SVB decision under section 18 of CA 1962. AA has only changed the wrong classification to proper classification considering the untruthful declarations made by HMIL, under section 46 of the CA 1962 while clearing the said goods under self-assessment procedure. Section 18 of the CA 1962 is without prejudice to the provisions of section 46 ibid. Hence no prejudice is caused to the importer in this regard and their plea be dismissed as untenable as assessment under section 2(2) of the CA 1962 includes re-assessment also. The AA has only appropriately classified the said goods without demanding any duty arising out of the changed classification against the provisionally assessed Bills of Entry and leaving the same to finalisation proceedings. 6.3 We find that classification of goods under the Customs Tariff is a part of assessment. Assessment of duty involves the determination of the dutiability of exim goods. It involves determining the import permissibility in terms of the EXIM policy and any other laws r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....external matter can be brought to alter the Bond conditions. In the impugned issue, the Bond was executed only with respect to determination of value of the goods supplied by related parties and not for any other purposes, hence, re-determination of classification by the AA is not only contrary to the provisions of CA 1962, but also against the spirit of Article 265 of the Constitution of India. 7.2 Revenue has relied on CESTAT Larger Bench, decision in Collector of Central Excise Vs P.M.T Machine Tools 1991 (55) ELT 592 (Tribunal) and Hon'ble High Court of Madras in case of Collector of Central Excise, Madras Vs India Tyre & Rubber Co Ltd [1997 (94) ELT 485 (Mad)] wherein it is held that when provisional assessment is made it should be treated as provisional for all purposes and not necessarily provisional in respect of particular grounds only. Hence it was open to the AA to finalise the classification. Further being a prominent and established manufacturer of Automobiles they are well aware of the classification of the goods. It is observed that goods which are having specific Tariff Heading/ Item were deliberately mis- classified by the importer under different tariff Heading....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee. In remarks that are also relevant to the departments appeal, it has been stated by the Hon'ble Supreme Court in the case of Union Of India Vs Jesus Sales Corporation [1996 (83) E.L.T. 486 (S.C.) / 2002-TIOL-259-SC-CUS / 1996 (4) SCC 69] as under; "4. . . Whenever an unfettered discretion has been exercised courts have refused to countenance the same. That is why from time to time courts have 'woven a network of restrictive principles' which the statutory authorities have to follow while exercising the discretion vested in them. This principle has been extended even when the authorities have to exercise administrative discretions under certain situations. Another well settled principle which has emerged during the years that where a statute vests discretion in the authority to exercise a particular power, there is an implicit requirement that it shall be exercised in a reasonable and rational manner free from whims, vagaries and arbitrariness." 7.5 We note that a Coordinate Bench of this Tribunal in the case of Lan Esenda Ltd. Vs. Commissioner of Customs, Mumbai [2005 (192) ELT 305 (Tri.- Mumbai)] held that the penalties imposed before finalisation of assessme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 08119010 and benefit of Notification under Notification no 46/2011-Cus dated 01/06/2011 [Import from ASEAN Countries] was denied because of wrong classification of the impugned goods. 8.3 We find that international treaties are entered into between Sovereign contracting States for providing "preferential tariff treatment" to goods imported by participating countries, from each other, in accordance with a trade agreement. There is a prima facie presumption that Parliament does not intend to act in breach of international law, including therein a specific treaty obligation. This is because the Directive Principles of State Policy as enshrined in Article 51 of the Indian Constitution enjoin the State to endeavor, inter alia, to foster respect for international law and treaty obligations. This is also seen to be diligently followed in CBIC's Instruction No. 19/2022- Customs, dated 17/08/2022, wherein Customs officials were instructed to give Free Trade Agreements an overriding treatment over Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR in short) wherever CAROTAR is inconsistent with FTA. Relevant portion is reproduced below. "3.2 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferential rate for payment of BCD. The Rules of Origin are comprehensive in nature which contains the complete operative mechanism on various substantive and procedural aspects for determination of the origin criteria of the imported product. 8.6 HMIL submits that, for example, in the Impugned Order the validity, or the genuineness of the Certificate submitted by HMIL at the time of import of PIO AVN Audio is not quashed or denied. In the Impugned Order, the only observation is that at the time of import, in the Country-of-Origin Certificate, the CTH was mentioned as 852712/ 852721, whereas as per the Impugned Order the appropriate classification is 8526 9190 and the said CTH is not mentioned in the certificate, and because of this, the Impugned Order seeks to deny the benefit of exemption. They hold that the substantial conditions required to be satisfied to avail the benefit of Country of Origin has been complied with. Further they submit that Rule 13 of the Customs Tariff (Determination of Origin of Goods) under the Preferential Trade Agreement between the Governments of Member States of the Association of South East ASEAN Nations (ASEAN) and the Republic of India, Rules, 200....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is felt to be not eligible then the department has to take recourse to the provision of the Rules of 2009 and follow the procedure set out there in. When the Customs Department of the importing Country does not take any action as provided for in Paras 7, 16 and 17 of Annexure III to the Rules of 2009 it cannot then question the concession from payment of duty as eligible as per the COO Certificate. As per Para 7, in case the AIFTA Certificate of Origin is not accepted by the Customs Authority of the importing party it shall be returned to the Issuing Authority within a reasonable period but not exceeding two months, duly notifying the grounds for the denial of preferential tariff treatment. As per para 16 the importing party may request a retroactive check at random and/or when it has reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin of the goods in question or of certain parts thereof. In case of reasonable doubt as to the authenticity or accuracy of the document, the Customs Authority of the importing party may suspend provision of preferential tariff treatment while awaiting the result of verification. As ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the goods by rejecting the Country-of-Origin Certificate is untenable and merits to be set aside. 8.12 The decision of the Tribunal in Holyland Marketing (supra) is distinguished in as much as the case involved suppressing the non- frozen character of the impugned goods, in order to avail the benefit of the Notification. Fraud vitiates all transactions and the decision in that case has been arrived at accordingly, hence it is distinguished. 9. Whether the redetermination of classification of Oil Control Valve (OCV) Assembly is legal and proper. 9.1 HMIL submits that the Oil Control Valve (OCV) is a critical component used in engine that is fitted with "Variable Valve Technology (VVT)". It has its own casing and is placed outside the engine. OCV regulate the supply of engine oil to a designated VVT hub, to advance or retard the timing by altering the Cam shaft angle position and is specifically covered under the category of valves under CTH 8481. The OCV increases the efficiency and performance of internal combustion engines. However, the efficient working of the VVT solenoid is very important for the efficient working of the engine. Although OCV is a valve it is not an inl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or common parlance. Relevant portion is cited below; "6. Before dealing with the issue of classification, certain points are required to be clarified. 7. In the case of A. Nagaraju Brothers v. State of Andhra Pradesh reported in [1994 (72) E.L.T. 801], it has been held by this Court that no one single universal test can be applied for correct classification. There cannot be a static parameter for correct classification. 8. Further, the scheme of the Central Excise Tariff is based on Harmonized System of Nomenclature (for short "HSN") and the explanatory notes thereto. Therefore, HSN along with the explanatory notes provide a safe guide for interpretation of an Entry. 9. Further, equal importance is required to be given to the Rules of Interpretation of the Excise Tariff. Under Rule 3(a), it is provided that the heading which provides a specific description shall be preferred to a heading having a more general description. For example, in the case of "toys" referred to in the HSN Heading and the Tariff Heading, the description refers to reduced size model of an Article used by adults. This test helps us to understand the difference between "toys" ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not be disturbed. 10. Whether the re-determination of classification of the other 13 imported items i.e. Vacuum Assembly; Water Pump Assembly; Cap Sealing; Case Assembly Timing Chain; Nut Flange; Nut Washer; Oil Seal; V-Ribbed Belt; Junction Box; Piston and Piston Assembly; Connecting Rod Assembly; Camshaft Assembly; PIO AVN Audio is legal and proper. 10.1 HMIL has stated that they do not accept the classification of the goods mentioned above as done in the impugned order. No detailed arguments are seen made in furtherance of their stand. 10.2 Revenue has stated that the importer vide reply letter dated 27/06/2023 and 12/07/2023 inter alia accepted classification changes as proposed by the department of all the 13 items listed above. In the case of Camshaft Assembly and PIO AVN Audio, HMIL has accepted the classification and only challenged the issue pertaining to the eligibility of the goods to duty exemption. They cannot now resile from their consent given and the appeal for change in classification of the said goods may be rejected. 10.3 We find that HMIL has after admitting to the classification of the above 13 goods vide their letter dated 27/06/2023 and 12/07/2023....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed 01.06.2011, instead of claimed Serial No.1390 (I). 11.1 HMIL has stated that the item PIO AVN Audio were imported from Vietnam and they availed the BCD exemption benefit @ Nil in terms of Customs Notification No. 46/2011, whereas, in the SCN, it was alleged that the goods were imported from Republic of Korea and alleged that they had wrongly availed the BCD exemption benefit @ Nil in terms of Customs Notification No. 152/2009 and thus the allegations are contrary to the facts available on record and hence, there is no application of mind, and the Original Authority has exceeded the scope and ambit of the SCN by confirming the duty liability by denying the BCD exemption benefit @ Nil in terms of Customs Notification No. 46/2011, which was not a part of allegations proposed in the SCN. Further it was stated that in their reply to the SCN they had categorically submitted to the Original Authority about their acceptance of the proposed reclassification of the imported PIO AVN Audio under CTH 8526 9190. The said tariff entry also finds a place at Serial No.1389 (I) of the same Customs Notification No. 46/2011 for the benefit of Preferential Basic Customs Duty (BCD) @ Nil and hence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce eligible for BCD concession @ Nil rate as initially claimed at the time of import, i.e. prior to their re-classification. 12. Whether the re-determination of classification of the imported Computer & Bracket Assembly / Electronic Control Unit (ECU) is legal and proper. 12.1 HMIL submits that the impugned order No 103953/2023 dated 11/12/2023, covers 8 different types of ECU's. 7 of these BE's were assessed provisionally when imported and are yet to be finalised and the matter is pre-mature. Hence their reply is restricted to the finally assessed Electronic Control Unit (ECU), mentioned in the bills of entry as Computer Bracket Assembly as described in the consigners invoice. We find that 4 of the ECU's dealt with in order No 103953/2023 have different part numbers and 1 is an ECU Coding System. However, all of them have been examined collectively. Similarly, OIO 103200/2023 dated 04/10/2023, also covers Computer Bracket Assembly / ECU among other goods. We examine the issue accordingly. 12.2 As per HMIL the impugned Computer & Bracket Assembly / ECU is a device that controls all the electronic features in a car. This may range from fuel injection to maintaining perfect ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsel further stated that; A) The classification of Computer Bracket Assembly/ ECU was dealt with by two SCN's and connected OIO's. As per SCN dated 06/10/2022, Computer Bracket Assembly/ ECU was sought to be classified under the CTH 8537, however the impugned order has travelled beyond the SCN and classified the goods under a completely new CTH i.e. 8708. This is highly irregular and since the change in classification was made vide OIO No 103200/2023 dated 04/10/2023 which was outside the SCN the said order merits to be set aside on this ground itself. B) The Central Board of Excise and Customs (CBEC) vide Central Excise Order No. 49/3/97-CX dated 09.05.1997, issued in terms of Section 37B of Central Excise Act, 1944, in consultation with the Department of Electronics, had inter alia clarified that there are 2 types of Programmable controllers, and these are, Programmable Logic Controller (PLC) and Programmable Process Controller (PPC). While the former is classifiable under heading 85.37 the latter is classifiable under heading 90.32. Departmental officers are bound by Boards instructions. C) The expert opinion dated 05/08/2022 rendered by IIT Madras, co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontrol device. Even though, Electronic Automatic Controller has to have all the 3 components (Measuring Device, Control Device, a starting, stopping or operating Device), but even if one of them is not there also i.e., Measuring Device or a starting, stopping or operating Device, then also it is still to be classified in this heading i.e., 9032 89 as incomplete automatically controlling instruments or apparatus. G) The impugned ECU's are Controllers with a specific function covered by heading CTH 9032 which covers 'Automatic regulating or controlling instruments and apparatus'. Whereas CTH 8708 is a residual entry. It is a settled position of law that the maxim "generalia specialibus non derogant" is applicable. H) The impugned goods satisfy Note 7 under to Chapter 90 which specifically covers CTH 9032. Revenue has disagreed with this view because the 'desired value' is not a constant in the impugned goods and is hence stated to be absent, taking the goods outside the said heading. The Ld. Counsel stated that 'desired value' does not mean a fixed/static/constant value but a dynamic value. The desired value refers to an output value that is already fed in the prepr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m is covered under the ambit of Electronic Automatic Regulators, and it falls under sub-heading 903289. d) HMIL submits that in the case of Commissioner of Customs, Bangalore v. N.I. Systems India (P) Ltd. (2010 (256) ELT (173), the Hon'ble SC of India determined the classification of PXI Controllers and held that the principal function of Controllers is to execute control algorithms, for real time monitoring and for controlling devices, processors or systems. e) In the case of Larsen & Toubro Limited v. Commissioner of Central Excise, Mumbai (2011 (270) ELT 385 (Tri-Mum), the Tribunal had held that Programmable Process Controller is classifiable under CTH 9032. f) In the case of Crompton Greaves Limited v. Commissioner of Central Excise, Nashik (2017 (7) GSTL 124), the Tribunal had held that the Advance Variable Speed Drive Controller had to be classified under CTH 9032 under the category of Automatic Regulating or Controlling Equipment. g) In the case of Jain Irrigation Systems Ltd v. Commissioner of Customs, ACC, Imports, Mumbai (2018 (363) ELT 190 (Tri- Mum), the Imported decoders were held to be classifiable under CTH 9032. 12.6 Per Contr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....used in the motor vehicle manufactured by HMIL and commercially known as part of motor vehicle. They are assigned with specific part numbers. They are not capable of being marketed independently for use otherwise than in motor vehicles. As per a reading of Note 3 to Section XVII when any part or accessory can fall in Section XVII as well as in another Section, its classification has to be determined by its sole or principal use. This is in line with the judgment of the Hon'ble Supreme Court in M/s G.S Auto International Ltd Vs Collector of C. EX. Chandigarh 2003 (152) ELT 3 (S.C) and M/ s. Cast Metal Industries Pvt. Ltd., 2015 (325) E.L.T. 471 (S.C.). D) ECU is not more specifically included elsewhere in the Nomenclature including under CTH 8537. They are hence correctly classifiable under CTH 8708.9900. E) He stated that HMIL reliance on 0-I-A's 301 & 302 of 2013 of Chennai Custom House for classification of ECU under CTH 903289 is not valid for the reason that the relevant O-I-O numbers 645 and 646 of 2011 pertaining to the O-I-A dated 28-2-2013 relied upon by HMIL as a settled principle of classification for the subject ECU / COMPUTER BRACKET ASSEMBLY under CTH....
X X X X Extracts X X X X
X X X X Extracts X X X X
....axing authorities to show that the particular case or item in question, is taxable in the manner claimed by them. 12.10 It is seen that the CPU of the impugned ECU works in conjunction with the various sensors attached and located in different parts of the car, for carrying out the defined specific function of (1) Engine Control Mechanism, (2) Transmission Control Mechanism (3) Body Control Mechanism (BCM) (4) Signal Control mechanism (SCM) and (5) Fuel Control Mechanism (FCM) Safety Air Bag Control Mechanism etc. It is hence a device pre-programmed along with software and interacts with various sensors to enable stability, safety, speed, optimal performance, fuel efficiency, regulating and minimizing the harmful gas emissions, providing notifications and signals in the Audio Video Navigation Telematic (AVNT) of the vehicle. 12.11 We find that as per SCN dated 06/10/2022, Computer Bracket Assembly/ ECU was sought to be classified under the CTH 8537, however the impugned order has classified the goods under a completely new CTH i.e. 8708. We find that the Hon'ble Supreme Court in Commissioner of Central Excise, Nagpur Vs Ballarpur Industries Ltd. [2007 (215) E.L.T. 489 (S.C.),....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lectronic Controller and not Programmable Process Controllers. It is an electronic unit and is essential and integral component of motor vehicle. The opinion hence while accepting the ECU to be a category of controller holds it in the common parlance to be an integral component of motor vehicle. The impugned orders, also while stating that the impugned goods are "Programmable controllers" has ruled out classification of the goods under CTH 8537. The dispute in the impugned orders is also limited to headings 9032 and 8708. 12.14 The impugned ECU has a separate identifiable/ individual function of its own, as an automatic regulating and controlling electronic apparatus that helps the automobile achieve optimal performance in different parameters and is different from the main electrical machine i.e. the engine. The Type Approval Certificate issued by ARAI refers to the Marks and Numbers of the Electronic Control Unit thus acknowledging it as a functional apparatus having a definite independent function. The Hon'ble Supreme Court Commissioner Of Income-Tax, Bombay Vs. I.B.M. World Trade Corporation - [1981] 130 ITR 739 (BOM) has cited the dictionary meaning of 'apparatus' as under;....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing or controlling instruments and apparatus'. In Santhosh Maize & Industries Ltd. Vs State of Tamil Nadu [(2023) 385 ELT 814 / (2023) 7 TMI 191 (Supreme Court)], it was held that the law is well settled that if in any statutory rule or statutory notification two expressions are used one in general words and the other in special terms under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail. Hence prima facie ECU's appear to be covered by Chapter 90 rather than Chapter 87 of the Customs Tariff. 12.15 We find that Para 'O' under HSN Explanatory Notes to CTH 8708, reads as under. (0) Safety Airbags of all types with inflater system (e.g. Driver- side airbags. passenger-side airbags to be installed in door panels for side-impact production or airbags to be installed in the ceiling of the vehicle for extra production for the head) and parts thereof. The inflater systems include the ignitor and propellant in a container that directs the expansion ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....statute. Besides, in a taxing Act one has to look merely at what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used. 12.18 Controllers play an important role in modern automobiles. The task of a Controller is to continuously compare and adapt the current value(s) of a system to some possibly changing desired value(s). What has been mentioned in Note 7 to Chapter 90 is 'desired value' and not 'set value' or 'specified value' or 'predetermined desired value'. One of the meanings of 'desired' as per the Oxford English Dictionary is "That is longed for, wished, or wanted". As per the web site dictionary.com 'desired' means, "1. yearned or wished for; coveted. 2. deemed correct or proper; selected; required:". The word has a broad meaning and in the present context covers a functional or technical requirement and cannot be read restrictively. Unlike in the case of an industrial machine doing fixed processes the desired value in an automobile is an optimum operating value and is not constant. It depends on the requirement of a working automobile at a point of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re excluded from the definition of 'parts' under Section XVII. We have discussed earlier that the goods satisfy the definition of 'apparatus' as has found approval in judgments of the Hon'ble Supreme Court. Just because the goods have been assigned numbers for ease of identification do not make them car parts, in terms of the Customs Tariff. The Hon'ble Supreme Court in Commissioner Of Customs, New Delhi Vs C-Net Communication (I) Pvt. [2007 AIR SCW 6208, 2007 (12) SCC 72] extensively quoted from the Canadian Tribunal decision in York Barbell Company Limited Vs Canada [(DMNRCE), AP-90-161, [1991] CITT No 43] which listed the following criteria as being relevant in determining whether a product is a part: (1) the product is essential to the operation of another product; (2) the product is a necessary and integral component of the other product; (3) the product is installed in the other product; and (4) common trade usage and practice. In Deputy Commissioner Vs Union Carbide India Ltd. [(1976) 38 STC 198 (KER)], the Kerala High Court after referring to some of the leading decisions of the Allahabad High Court held as follows : "The principle which can be drawn from the above....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us judgments. 12.21 The decision makes it clear that the articles of CTH 9029 cannot be regarded as "parts and accessories" of motor vehicles classifiable under CTH 8708, even if they are principally designed for use with motor vehicles. In Commissioner of Central Excise Vs Carrier Aircon Ltd. [2006 (199) E.L.T. 577 (S.C.)], the Hon'ble Supreme Court has held that end use to which the product is put to cannot be determinative of the classification of the product. 12.22 The impugned order further holds that as per a reading of Note 3 to Section XVII when any part or accessory can fall in Section XVII as well as in another Section, its classification has to be determined by its sole or principal use. First of all Note 3 to section XVII states that, references in Chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory. Hence the note deals with goods which answers....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s covered by Section / Chapter Notes which are not pari materia. 12.24 Classification of goods are to be done as per the Statute enacted in this behalf. In its judgment in Hameed Joharan (D) And Ors Vs Abdul Salam (D) By Lrs. And Ors, [AIR 2001 SUPREME COURT 3404 / 2001 (7) SCC 573] the Hon'ble Court stated as under "...We consider it proper to say, as we have already said in other cases, that judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton, [1951 AC 737-761], Lord MacDermott observed : The matter cannot, of course, be settled merely by treating the ipsissima verba of Wills. J., as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguish....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of exclusion would be defeated. 12.26 The Ld. AR has drawn attention to the Order of a Coordinate Bench at New Delhi in M/s Continental Automotive Systems India Private Ltd Vs Commissioner of Customs, Delhi [2024 ( 3 ) TMI-CESTAT New Delhi], wherein it was held that ECU in that case was not a regulator of electrical quantity nor was it an instrument or apparatus for regulating non-electrical quantities which depend on electrical phenomenon. Merely because ECU is a chip which analyses the data (and through any chip electricity flows), the function of ABS or it's part ESCS (manufactured by the HMIL) or it's further sub- part ECU (imported by HMIL) do not, qualify as automatic regulator of electrical quantities and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on electrical phenomenon. Accordingly, the Principal Bench, dismissed the Appeals and upheld the Order of the Adjudicating Authority wherein the goods were classified under CTI 8708 9900. We find that ECU is a generic name. It is not unique to motor vehicles and is used in domestic machines like refrigerators, washing machine, dish washers etc. and also in indu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of clearance of the imported ECU, whereby part of the demand is outside the ambit of two years normal period pertaining to goods covered by Order-in-Original dated 11/12/2023 and is unsustainable. 13.1 HMIL submits that in the course of investigation, they had paid the differential duty 'under protest'. In the Impugned Order, the duty liability was confirmed for the period of 2 years' time from the date of payment of duty under protest. For the purpose of determination of period of limitation, the "relevant date" as defined under explanation 1(a) of Section 28 has not been taken into account and on proper application of law, it is evident that either partial or full demand is outside the ambit of two years period. As such, demand and confirmation of duty liability are beyond the normal period of 2 years from the "relevant Date" (Clearance date of the imported goods), hence, part of the demand may be held as unsustainable and unacceptable. It is submitted that the Impugned Order has confirmed duty liability for 118 finally assessed Bills of Entry and out of the 118 finally assessed Bills of Entry, for 53 Bills of Entry, the demand is after the period of 2 years, hence, not prot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n-Original dated 04/10/2023 is unsustainable and no fine on the goods or penalty on the individual can be imposed. 14.1 HMIL avers that there is no specific allegation nor have specific details been adduced in the said Show Cause Notice's regarding suppression of facts. The entire issue is mere redetermination of classification of the imported items and there is no mis-declaration of description or value or any other information at the time of filing the Bills of Entry. Hence the question of invoking suppression of facts for demanding duty for the extended period, confiscation of goods or imposition of fine and penalty does not arise and merits to be set aside in the impugned orders. 14.2 We find that OIO 103953/2023 dated 12/12/2023 at para 85.2 and 85.3 states the reason for invoking sections 111 (m) for confiscation of the goods and 112(a) and 114(AA) of CA 1962 for penalising HMIL. The burden of the charge is that HMIL while filing the bills of entry had subscribed to a declaration as to the truthfulness of their contents. Further under the self-assessment procedure onus is on the importer to ensure that they declare the correct description, classification, applicable rat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Hon'ble Supreme Court in Asstt. Collector v. Bussa Overseas and Properties Pvt. Ltd. [2004 (163) E.L.T. A160 (S.C.)], dismissed the SLP against the judgment and order dated 04/08/1992 of the Bombay High Court in Bussa Overseas and Properties Pvt. Ltd. v. C.L. Mahar, Asstt. Collector [2004 (163) E.L.T. 304 (Bom.)] The High Court had held that once the imported goods are cleared for home consumption they cease to be 'imported goods' as defined in Section 2 of the Customs Act, 1962 and are consequently not liable to confiscation. The Hon'ble Supreme Court again in Commissioner Vs Finesse Creation Inc. [2010 (255) E.L.T. A120 (S.C.)], dismissed the SLP filed by Commissioner of Customs (Import) against the Judgment of the High Court of Bombay in Commissioner Vs Finesse Creation Inc [2009 (248) E.L.T. 122 (Bom.)]. The High Court had distinguished the Apex Court decision in case of Weston Components Ltd. (supra), while holding that concept of redemption fine arises in the event the goods are available and are to be redeemed, and if goods are not available, there is no question of redemption of goods. In any case HMIL has not been found committing a blame worthy act and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpugned order. B) It is settled law that the extended period cannot be invoked when the case involves a genuine interpretative issue, which is not merely an excuse given by HMIL, who has short paid duty due to a change in classification of a few of the imported goods as above. Some of the disputed classification of goods, covered by the impugned orders, have been found by us to be correctly classified. Demand and confirmation of duty liability, if any, beyond the normal period of 2 years from the relevant date, is not sustainable. C) The classification proposed for Electronic Control Unit (ECU) as per the SCN was under CTH 8537 whereas the impugned order has finalised the classification under CTH 8708 9090 which is beyond the allegations and proposal made in the SCN and hence merits to be set aside. The goods are hence eligible for benefit of Notification No. 46/2011, dated 01/06/2011 as claimed. D) PIO AVN Audio were imported from Vietnam and availed the BCD exemption benefit @ Nil in terms of Customs Notification No. 46/2011, whereas, in the SCN, it was alleged that the goods were imported from Republic of Korea and had wrongly availed the BCD exemption....