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Issues: Classification of imported goods under Customs Tariff Headings 8504.40 and 8543.89, Confiscation of goods for lack of Specific Import Licence, Imposition of fine and penalty.
The judgment pertains to an appeal arising from the Commissioner of Customs (Appeals) order regarding the classification of goods imported by the appellants under Customs Tariff Headings 8504.40 and 8543.89. The goods were identified as inverters requiring a Specific Import Licence, which was not produced during clearance, leading to confiscation by the adjudicating authority. The appellants were given the option to redeem the goods by paying a fine of Rs. 15,000 and a penalty of Rs. 1000. The lower appellate authority upheld this decision, prompting the current appeal. The appellants argued that the imported goods, while functioning as inverters, also included an additional feature to control motor speed. However, the Tribunal held that since the goods primarily performed the function of converting Direct Current to Alternating Current, they were rightly classified under Customs Tariff Heading 8504.40. The Tribunal referenced a prior decision and distinguished it, emphasizing the alignment of the tariff from 1-1-1996. Consequently, the order of confiscation was upheld, but the fine was reduced to Rs. 10,000 considering the circumstances. The penalty imposed on the appellant was set aside due to their genuine belief, based on the earlier decision, that the goods could be imported without a Specific Import Licence. In conclusion, the judgment reaffirmed the classification of the imported goods as inverters under Customs Tariff Heading 8504.40 due to their primary function of converting Direct Current to Alternating Current. The decision highlighted the importance of complying with licensing requirements and acknowledged the appellant's genuine belief regarding the import regulations based on prior interpretations. The reduction of the fine and the setting aside of the penalty reflected a balanced approach considering the facts and circumstances of the case.
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