2011 (8) TMI 900 - AT - Customs

Interest - Import - Held That - . As the differential duty has been paid subsequent to the clearance of the goods, therefore, we find that the setting aside the interest on the delayed payment of differential duty is not sustainable. Penalty - Classification under particular heading - Held That - Revenue has not produced any evidence to show that the respondent has suppressed the material facts with intend to evade duty; hence respondents are not liable for penalty.

Summary

Issues:
1. Appeal against order-in-appeal setting aside penalty and interest.
2. Classification of imported goods under different tariff headings.
3. Liability for interest on delayed payment of duty.
4. Liability for penalty based on suppression of material facts.

Analysis:
The appeal was filed by the Revenue against the order-in-appeal passed by the Commissioner (Appeals) setting aside the penalty and interest imposed on the respondent. The Commissioner (Appeals) had ruled that there was no suppression or misdeclaration by the respondent with the intention to evade duty payment. The respondent had imported goods declared as silicon stabilizer B-8404 under Chapter 24 of the Customs Tariff Act, and duty was paid accordingly. However, a show-cause notice was issued later, claiming that the goods should have been classified under Chapter 34, leading to a demand for differential duty, interest, and penalty.

The Commissioner (Appeals) set aside the interest and penalty, emphasizing the absence of suppression by the respondent. The Revenue argued that the respondent had previously imported similar goods classified under Chapter 34, indicating a deliberate misdeclaration in the present case. The Tribunal noted that the Commissioner (Appeals) had upheld the demand by classifying the goods under Chapter 34, resulting in the payment of differential duty. Therefore, the Tribunal held that setting aside the interest on delayed payment was not justified, making the respondent liable to pay interest for the delay.

Regarding the penalty, the Tribunal found that the Revenue failed to provide evidence of the respondent suppressing material facts to evade duty. As a result, the Tribunal concluded that the respondent was not liable for the penalty. Consequently, the impugned order was modified, allowing the appeal in favor of the respondent.