2007 (5) TMI 117 - HC - Customs

Classification Respondent claim that the good(Coal tar pitch) imported by him classifiable under SH 2708.11 of CTA,1975 but not agree by the department Burden on respondent to show that the subject consignment was not manufactured by cut back method to come out mischief of SH 19

Summary

Issues:
Controversy over the import classification of pitch (tar) under different sub-headings, validity of show cause notice issued by Customs Authority, burden of proof on importer to show compliance with classification, sufficiency of evidence provided by Customs Authority, interpretation of relevant legal provisions.

Analysis:
The case involved a dispute regarding the import classification of pitch (tar) by the respondent from abroad. The respondent claimed they imported the consignments under sub-heading 11 based on past practices and information received from the manufacturer. However, Customs Authority objected, stating the consignment should fall under sub-heading 19. Correspondences were exchanged, but Customs remained unsatisfied, leading to the present litigation.

The Single Judge initially disposed of the writ petition, emphasizing the Customs Authority's burden to prove the consignment did not fall under sub-heading 11. The Judge quashed the show cause notice, ruling it was based on speculation. Customs Authority, dissatisfied, appealed the decision, arguing for the opportunity to prove their case before the adjudicating authority.

During the appeal, the respondent's counsel contended there was no evidence supporting Customs' claim that the consignments fell under sub-heading 19. They argued Customs failed to meet the burden of proof, justifying the writ petition's allowance. The respondent cited legal precedents to support their position.

The Court analyzed the classification under sub-headings and emphasized Customs' obligation to establish prima facie dissatisfaction with the importer's classification. The Court criticized Customs for shifting the burden of proof to the respondent regarding the manufacturing method. It upheld the Single Judge's decision, dismissing the appeal and ordering no costs.

The Court's order allowed Customs to initiate a new proceeding following the outlined observations. A concurring judge supported the decision, concluding the case.

In conclusion, the judgment clarified the burden of proof in import classification disputes, highlighting the Customs Authority's obligation to provide sufficient evidence before issuing show cause notices. The decision underscored the importance of proper investigation and adherence to legal principles in such matters.