TaxTMI 
TaxTMI 
2026 (4) TMI 383
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....e importer and to the appellant proposing to change the classification of "instrument clusters" that were importer by M/s Denso Haryana Pvt. Ltd. [the importer] from CTI 9029 90 00/9029 20 90 to CTI 8708 99 00 and demanding differential duty and also proposing to impose penalty upon the appellant under section 112 (a) (ii) of the Customs Act. 4. This show cause notice was adjudicated by an order dated 31.01.2023. While the classification proposed by the importer was rejected and the goods were re-classified under CTI 8708 99 00, but the imposition of penalty upon the appellant was dropped. It also transpires from the records that subsequently the importer imported the same 'instrument clusters' in 2022. The importer, however, asked the appellant to request the department for a first check in respect of the Bill of Entry dated 25.05.2022. This request was accepted and the examination order directed for examination of 100% of packages and for verification that the goods were as per the invoice and packing list and airway bill. It also directed for verification of the classification. 5. On record is the order passed by the investigating officer that accepts the classification pr....
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.... Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the customs authorities. However, it was found that M/s S.K. Jain & Company was well aware about the issue of mis-classification of Instrument Cluster as they were made a co-noticee in the SCN dated 19.10.2020. However, at the time of import of Instrument Cluster in First Check Bill of Entry No. 877115 dated 21.05.2022 under CTH 9029 and filing the same for First Check and intimation letter dated 01.06.2022, M/s S.K. Jain & Company failed to disclose that the matter of classification of the item is sub judice and an SCN is pending adjudication. Hence, it appears that he deliberately chose to alter the classification, which jeopardized the govt. exchequer. Therefore, the act of omission and commission of Noticee which tantamount to mis-declaration has rendered the impugned goods liable for confiscation under section 111 (m) of the Customs Act, 1962. Hence, M/s S.K. Jain & Company (Customs Broker) for M/s Denso Haryana Private Limited is liable for penalty under section 112 (a) (ii) of the Customs Act, 1962". 8. Shri Gurdeep Singh, learned counsel for the appellant a....
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....e import of the same "instrument clusters". 13. This reason could not form the basis for imposing penalty upon the appellant. In the first instance, there was no obligation on the part of the appellant to intimate the department about the pendency of the earlier show cause notice. This apart, the show cause notice was issued by the department and, therefore, the department should have been aware that a show cause notice has been issued to the importer and the appellant earlier. 14. Section 112 (a) (ii) of the Customs Act provides that any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, shall be liable to a penalty not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher. 15. The appellant, in the instant case, had asked the department for a first check which was undertaken. In such a situation, it cannot be said that the appellant abetted the doing or omission of an act which would render the goods liable to confiscation under section 111 of the Customs Act. 16. This is wha....
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....he same, he would not have requested for first check. In that scenario, we find no infirmity in the view taken by the Commissioner". 18. It also needs to be noted that the importer, by a communication dated 01.06.2022, which was received by the department on 02.06.2022 had also informed the department about the change of the classification of the imported goods from CTI 8708 99 00 to CTI 9029 20 90. The relevant portion of the letter is reproduced below :- "To, The Deputy Commissioner of Customs (SB) New Customs House, IGI Airport, New Delhi - 110 037. Sub. : Intimation regarding classification of Instrument Cluster. Sir, Denso Haryana Private Limited ("DNHA/Company"), is inter alia engaged in Import or Automotive parts and supplies the same to manufacturers of motor vehicles. DNHA regularly Imports 'Instrument Cluster' ("subject goods" as in Table 1 below). 2. DNHA has been classifying the subject goods under Customs Tariff Heading ("CTH") as in Table 1 below as : "Current CTH" In its bonafide understanding of the product. However, after internal deliberation, consultation with classification experts and pu....