TaxTMI 
TaxTMI 
2026 (2) TMI 1031
X X X X Extracts X X X X
X X X X Extracts X X X X
.... High Court of Madras and hence taken up. 2. The brief sequence of events in the present case leading up to the present appeal is provided hereunder for ready reference: - S. No. Date Event 1 B/E filed Between 2003-2006 Bill of Entry 2 30.01.2008 Show Cause Notice bearing F. No. VIII/48/29/2007-DRI 3 28.08.2008 Order-in-Original No. 8076/2008 4 27.04.2009 Final Order No. 334, 335/2009 5 31.10.2009 De Novo Order-in-Original No. 9924/2009 6 29.09.2017 Final Order No. 42473-42474/2017 7 28.04.2022 Order of the Hon'ble High Court of Madras in CMA No. 961 & 965 of 2022 and CMP No. 7143 of 2022 3. This Customs Appeal No. C/103/2014 has been filed by M/s. Swamy Engineering Works, i.e., the main appellant & Customs Appeal No. C/104/2014 has been filed by Mr. K. Sankar, Partner, being aggrieved by Order-in-Original No. 9924/2009, dated 31.10.2009 (impugned Order herein), passed by the Commissioner of Customs (Sea Port Import), Chennai, whereby differential duty demand along with interest was confirmed under Section 28(2) read with Section 28AB of the Customs Act, 1962, goods were ordered to be confiscated under Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T 150 speaker from among the seized goods were drawn for further verification under mahazar proceedings on 16.08.2007. K. Sankar, Partner of the main Appellant and the Appellant in (C/104/2014) was summoned and statement was recorded from him on the technical aspects of the loud speakers on 28.08.2007. SHOW CAUSE NOTICE: 9. The Revenue, basis upon the manufacturer's catalog, alleged as under: - a. A loudspeaker may comprise either a transducer of the cone type or a compression driver, also referred to as a high-frequency (HF) element. b. APT 50 Speaker: As per the Eminence product catalog, the APT 50 is classified under HF products with a phenolic diaphragm. The said speaker does not contain any cone element. c. APT 80 Speaker: The Eminence catalog classifies the APT 80 under HF products. Although its dispersion is conical in nature, it does not appear to contain any cone element. d. APT 150 and APT 200 Speakers: These models are described as horns without any cone element. 10. Accordingly, the Revenue alleged that the speakers such as APT 50, APT 80, and APT 150 imported by the Appellants, in respect of which exemption under Notific....
X X X X Extracts X X X X
X X X X Extracts X X X X
....turer, M/s Eminence Speaker Europe Limited, England and forwarded by the importer; the Master Handbook of Audio Production by Jerry C. Whitaker (2002); and certain materials downloaded from the internet. 14. Aggrieved by the said Order-in-Original, the Appellants preferred an appeal before Chennai Tribunal primarily on the ground that Order-in-Original No. 8076/2008 dated 28.08.2008 was contrary to law, without jurisdiction, and violative of the principles of natural justice, inasmuch as the Commissioner failed to consider the replies and documents submitted by the Appellants and proceeded to pass the order with a pre-determined mind, while placing complete reliance on materials obtained by him behind the back of the Appellants and without their knowledge. 15. The Appellants further contended that there was no misstatement or misdeclaration on their part and that there was no intention whatsoever to evade payment of duty, as alleged in the Show Cause Notice as erroneously confirmed in the impugned order. This Tribunal, upon careful examination and analysis of the issues involved, vide Final Order Nos. 334-335/2009 dated 27.03.2009, set aside the order passed by the Respondent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with the directions issued by this Tribunal, inter alia, by supplying the documents relied upon in Order-in-Original No. 8076/2008 dated 28.08.2008, namely: (a) a copy of the email from Shri Anthony Lucas dated 26.06.2008. (b) an extract of page 177 of the Master Handbook of Audio Production by Jerry C. Whitaker (2002), stated to have been downloaded from the internet; and (c) a copy of the image of the "Eminence ED2SD" replacement diaphragm for APT-50. 17. Pursuant thereto, the Appellants appeared for personal hearing and submitted their detailed written submissions dated 28.07.2009. The Appellants raised several objections and submissions rebutting the contentions of the Department, which have been recorded in the impugned order. The relevant extract thereof is reproduced below: - "17. However, the noticees have contented that Eminence replied to them vide letter dated 18:9.2008 stating that they replied to Mr. Krish as a customer and that the clarification had not been issued technically; that vide letter dated 18.9.2008 they further clarified that they were not the manufacturers of APT-50, APT-80, APT-150 and APT-200; that it was manufactu....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s Eminence England dated nil, wherein it is interalia stated that they had issued Exploded view certification of APT-50 Speaker Driver which are used in APT-80, APT-150 and APT-200 with the consent of the manufacturer in Poland. This fact was never brought on record at the time of original adjudication, as they were all along maintaining that M/s Eminence were the manufacturers. If M/s Eminence were not the manufacturers, the noticees had no locus standi to submit a clarification from M/s Eminence. From the entire gamut of things, I find that there is no consistency in the stand maintained by the noticees. In fact, they have come up with conflicting stands at different times in order to suit their needs. On the other hand, analysis of the exploded view of APT 50 catalogue stated to be received from the manufacturer clearly reveals that the diaphragm is dome shaped only. 18. Next, I observe that the noticees have not anywhere countered that the Eminence ED2SD, a copy of which was furnished to them, is not the replacement diaphragm for APT 50. A copy of the image of the said diaphragm reproduced below indicates that the diaphragm is dome shaped. ..... 19. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...."Loudspeaker "Cone type" in order to avail ineligible benefit of Customs Notification. Therefore, in view of the willful mis-statement and suppression of facts, as discussed above, I hold that the extended period of '5' years as per proviso to Section 28(1) of the Customs Act, 1962 is clearly invokable in this case." 20. The finding of the Adjudicating Authority rejecting the Appellants' contention that, once an assessment is completed, the same cannot be reopened except by way of review under Section 129D of the Customs Act, 1962, based on the judgment of the Hon'ble Supreme Court in M/s. Priya Blue Industries Ltd. reported in 2004 (172) E.L.T. 145 (S.C.), which is reproduced below: - "...In other words, an order of assessment could be modified only by following the statutory provisions relating to filing of appeal against such order or on review provided under Section 28 of the Customs Act, 1962. It is therefore clear from the judgment cited supra that Section 28 of the Customs Act, 1962 empowers the issue of notice in a case where any duty has not been levied or has been short levied by the Proper Officer. The judgment does not speak about Section 129....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of India, the operation of which had been stayed by the Hon'ble Supreme Court, as reported in 2016 (339) E.L.T. A49 (S.C.), against which appeals were pending before the Hon'ble Supreme Court. 25. Considering the facts and circumstances of the case, this Tribunal, vide Final Order Nos. 42473-42474/2017 dated 29.09.2017, set aside the impugned order and remanded the matter to the original adjudicating authority for adjudication on the issue of jurisdiction. The relevant extract of the order passed by this Hon'ble Tribunal is reproduced below: - "11. By following the ratio laid down by the Hon'ble High Court of Delhi in the case of BSNL (Supra) as well as by considering totality of facts and circumstances, we set aside the impugned order and remand the matter to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon'ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard. Till the final decision, the status quo will be maintained. 12. The impugned order is set aside and the appeals are allowed by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... driver, demonstrating that the imported products fall under the latter category and not the former. (Paper Book III, c. The manufacturer, PRO TONSIL Sp. z 0.0., from whom the Appellant's supplier had procured the products in question, has categorically certified that the said products are speakers of cone type only. He places reliance on the certificate issued by the manufacturer to show the nature and construction of the goods. The relevant extract of the said certificate is reproduced below for ready reference: - "We, the manufacturer Tonsil of APT-50 Speaker Driver certify the exploded view of APT-50 and the Diaphragm used in it is parabolic (Cone) in shape." d. A physical sample of the product in question has been shown during the hearing before this forum to demonstrate that the product is cone-shaped and not dome-shaped, as claimed by the Respondent. e. He further draws attention of this Tribunal to the discussion happened during Chief Commissioner's conference held on 28th and 29th June, 2001 at Mumbai on the issue of eligibility for exemption available to importers importing "tweeters" under Notification No. 17/2001-Cus., Sl. No.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Page No.21.) He refers to the following extract of the examination order/report issued by the Appraiser to the Examiner: - Extract of the relevant portion of the Examination Order "64521723/06/2004 -PL OPEN AND INS S/2 OR MORE PKGS VFY DES WRT MFG INVOICE & ALL ORIGINAL IMP DOCS. PL VFY THE APPLICABILITY OF NOTIFICATION BENEFIT FOR ALL ITEMS BY PRABAKAR ON 23/06/2004 at 3:30P.M. Extract of the relevant portion of the Examination Report by Examiner / Inspector "Opened and examined 2 pkgs in the presence of CHA -Special Observation: ---BD LCL: OPEND & INSPECTED S/2% PKGS. CONTS. SPEAKER CONE TYPE (MODEL NOS. ALPHA BA, BETA 12 LTA, APT 80). VFD DESC WR. T. IM. DOCUMENTS By BHAGVATI dated 26/06/2004 at 04:51 P.M." j. The concerned officer had duly inspected the description of the goods as well as the applicability of the exemption notification and, being fully satisfied with the declarations made by the Appellant, had released the goods in question. He submits that the question of mis-classification does not arise and the impugned order is therefore unsustainable. Further, he submits that the allegations of mis-declaration or wilful misstat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e sustainable? 32. We find that the main contention of the Appellant is that the loudspeakers in question are cone type and not dome type. The Appellants have submitted that they are therefore eligible for exemption under Notification No. 21/2002-Cus., dated 10-9-2004. 33. Upon analyzing the product classification, we find that the Department has accepted that the products in dispute, namely APT 50, APT 80, APT 150 and APT 200, are all High Frequency (HF) speaker drivers, and that the dispute is confined only to their type, i.e., whether they are of the "cone" type or "dome" type. Having carefully appreciated the facts and the evidence on record, including the catalogues, technical literature and expert certificates produced by the Appellants, as well as the conclusions arrived at during the Chief Commissioner's Conference-wherein it was concluded that the shape of the diaphragm is the determining factor for deciding the type of loudspeaker and in adherence to the principles of judicial discipline, we hold that the Appellants are entitled to the benefit of Notification No. 21/2002-Cus., dated 10-09-2004, since the diaphragm is in the shape of parabolic. The exploded view ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Appellant is not at all tenable as misclassification or availment of benefit of the Notification could not be equated with misdeclaration or suppression within the meaning of Section 28(4) of the Customs Act, 1962. It is a settled law that once the goods are correctly described and the appellant has availed the benefit of the concessional rate of duty of Notification which has been accepted by the Departmental Authorities, the importer's action cannot be termed as suppression or misdeclaration or with wilful misstatement. 19.4 From the above facts, we find that the issue has been very much in the know of the revenue as the Appellants, initially not being aware of these amendments paid higher duty and subsequent to the appeal proceedings, they were able to get a refund of the excess duty paid for 5 bills of entry filed between 18.12.2017 and 26.12.2017. In respect of 15 other consignments, for which, bills of entry were filed subsequently, benefit of lower duty was claimed and extended by the Department. Subsequently only the DRI, Cochin conducted detailed investigation resulting in the issuance of the impugned order dated 29.09.2023. Hence invocation of extended pe....