AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1271
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....Principal Commissioner in which he decided the proposals made in the show cause notice dated 31.08.2022 and confirmed the demand of differential duty of Rs. 21,43,21,579/- along with interest and imposed an equivalent amount as penalty on the appellant under section 114A of the Customs Act, 1962 [The Act]. 2. The facts which led to the issue of the impugned order are that the appellant is a subsidiary of M/s Vaptec Company, USA. It imports various parts for use in railways and supplies them to Indian Railways. It classified the goods that were imported under Customs Tariff Item [CTI] 8607 99 90/ 8607 21 00 as parts of railways. The Directorate General of Revenue Intelligence [DRI] initiated investigation into the imports by the appellant....
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....s issued proposing demand of duty and also proposing imposition of penalty under section 114A. 5. The appellant is not contesting the demand or seeking refund of the duty paid or interest. It is only contesting the penalty imposed under section 114A. 6. The classification of the railways parts were under dispute for a long time and in the case of Westinghouse Saxby Farmer Limited vs. Commissioner of Customs- 2021 (376) ELT 14 (SC) , the Supreme Court held applied the principal/ sole use test and held that relays meant for use in railways are classifiable under Chapter 86. The Review Petition filed by the Revenue against this judgment was also dismissed. Therefore, classification of the disputed goods under Chapter 86 was correct.....
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.... refund of the duty or interest so paid, the only point to be decided by us is if SCN should have been issued at all by the DRI or the case should have been closed under section 28(2) of the Act. 13. Section 28(2) as applicable during the relevant period reads as follows: "2) The person who has paid the duty along with interest or amount of interest under clause (b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty or interest so paid or any penalty leviable under the provisions of this Act or the rules made thereunder in respect of such duty or interest: [Provided that....
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....which the importer has to declare all facts truthfully and also subscribe to a declaration as to the truth of the contents of the Bills of Entry. The importer is also required to self-assess duty under section 17 of the Act. There is no separate document or procedure self-assess duty and it is done by filing the Bill of Entry. Assessment is defined under section 2(2) of the Act as follows: "2(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 - (a) the tariff class....
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....of the goods, the quantity, the transaction value paid or payable and also matters of opinion such as the classification of the goods. While it is necessary for an importer to truthfully declare facts in the Bill of Entry, matters of opinion such as the classification cannot be clearly stated as correct or incorrect. All that the appellant can and must do is to declare the CTI under which, according to its understanding, the imported goods fall. This classification can be changed by the officer during re-assessment of the Bill of Entry. If the Bill is Entry is challenged by either side, Commissioner (Appeals) can also modify, the classification. In further appeals, at every stage up to the Supreme Court the classification can be upheld or m....