2013 (9) TMI 702 - AT - Customs

Classification of Goods recovery of short paid duty - assessee classified the goods under Heading 7228 70 11 and the goods were cleared under risk-management system - Revenue was of the view that the goods cleared were in fact parts of bulldozers and should have been classified under Customs Tariff Item 8431 49 90 - Held that - The classification originally adopted for clearing the goods appears to be correct revenue had not been able to show that the goods imported were goods other than hot rolled sections - There was nothing to suggest that the goods when imported had a nature of parts of tractors - he had been importing this product prior to this consignment and in all cases the goods were classified under CTI 7228 70 11 and there was no reason to change the classification. Stay application waiver of pre deposit court granted waiver of pre deposit stay application allowed stay granted.

Issues: Classification of imported goods under Customs Tariff Item 7228 70 11 or 8431 49 90

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the issue revolved around the correct classification of imported goods by a manufacturer of bulldozers. The appellants imported goods declared as "Track shoes section hot rolled of length 560mm" for manufacturing operations. The dispute arose when the Revenue contended that the goods should have been classified under Customs Tariff Item 8431 49 90 as parts of bulldozers, leading to a short-levy of duty. The appellants argued for classification under Heading 7228 70 11, stating that the imported goods fit the description of hot-rolled sections and were further processed in their factory to create track shoes. The Tribunal had to determine the appropriate classification to resolve the duty payment issue.

The appellants' contention was that the imported goods fell under CTI 7228 70 11, which covers "Angles', shapes and sections not further worked than hot-rolled, hot-drawn or extruded." They argued that the track shoes were made suitable for use in bulldozers only after cutting, drilling holes, and making notches in their factory. The appellants highlighted that they had consistently classified similar goods under CTI 7228 70 11 in previous imports, emphasizing the nature of the imported goods as hot rolled sections for further processing.

On the other hand, the Revenue argued that the goods should be classified under Chapter 84 as parts of bulldozers based on the part number indicated in the invoice. They contended that the supplier of the impugned goods differed from previous suppliers, indicating a different nature of the imported goods. However, the appellants clarified that part numbers were used for tracking purposes and should not dictate the classification of the goods.

After considering the submissions from both sides, the Tribunal found that the Revenue failed to demonstrate that the imported goods were anything other than hot rolled sections. They noted that there was no evidence suggesting that the goods were initially parts of tractors upon importation. Consequently, the Tribunal upheld the classification originally adopted by the appellants under CTI 7228 70 11, granting a waiver of predeposit of dues and staying the collection during the appeal process. The judgment clarified the classification issue and resolved the duty payment dispute in favor of the appellants.

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