2013 (12) TMI 1195 - AT - Customs

Classification of goods - Classification under CTH 8517 12 10 or CTH 8517 70 90 - benefit of Central Excise Notification 6/2006 Sr. No. 28 and Cess Notification No. 69/2004 (Sr.No. 1) - Held that - What should be the correct classification, is the duty of the assessing officer while assessing the goods - The assessee has tried to classify the goods under 8517 12 10/8525 20 17 and 8525 20 19, it is the duty of the assessing officer to examine the goods and classify it correctly. On examination of the description of the goods given by the assessee, we find that they have clearly declared the goods as FWT LST-280-R in complete set (cellular phone). Therefore, we do not find from the records that the act of the assessee is a deliberate act to avoid payment of CVD. As the act of the assessee is not deliberate and they have paid duty along with interest, therefore we do not find any reasons to impose penalty on them - Following decision of Northern Plastic 1998 (7) TMI 91 - SUPREME COURT OF INDIA - Decided in favour of assessee.

Summary

Issues:
Classification of imported goods under Central Excise Tariff Headings, imposition of penalty on the assessee for misclassification, applicability of Central Excise and Cess Notifications, deliberate misdeclaration of goods, duty of assessing officer, revenue neutrality, imposition of penalty under Customs Act.

Classification of Imported Goods:
The case involved the classification of imported goods, specifically 'Fixed Wireless Terminals,' which were wrongly classified by the importer under CTH 8517 12 10 instead of CTH 8517 70 90. The investigation revealed that the goods were wireless apparatus requiring a license for clearance. The goods were found to be 'Fixed Wireless Terminals' and not 'Free Wireless telephones,' as they required an external device to function as a telephone. The Tribunal determined that the goods were correctly classifiable under CTH 8517 70 90 and not 8517 12 10 as claimed by the importer.

Imposition of Penalty:
The issue of penalty imposition arose in the case, with the Revenue filing appeals for dropping the penalty against the respondent. The Commissioner had dropped the penalty against the assessee in two orders, leading to appeals by the Revenue. In Appeal No. C/51/11, the penalty was confirmed on the assessee. The Tribunal considered the arguments presented by both sides regarding the imposition of penalty and examined whether the misclassification was deliberate to avoid payment of CVD. The Tribunal ultimately found that the act of the assessee was not deliberate, and since duty had been paid along with interest, there were no grounds to impose a penalty.

Applicability of Notifications and Legal Provisions:
The case involved the applicability of Central Excise Notification 6/2006 Sr. No. 28 and Cess Notification No. 69/2004 (Sr.No. 1) claimed by the importer for undue benefits. The Tribunal considered the legal provisions under the Indian Wireless Telegraphy Act, 1933, and the Customs Act, 1962, in relation to the classification and clearance of the imported goods. The Tribunal emphasized the duty of the assessing officer to correctly classify the goods and noted that the act of misdeclaration by the assessee was not deliberate, leading to the decision to drop the penalty.

Deliberate Misdeclaration and Revenue Neutrality:
The Tribunal analyzed the contentions regarding deliberate misdeclaration of goods by the assessee and the concept of revenue neutrality in the case. The advocate for the assessee argued that the classification under CTH 8517 12 10 had no impact on the imported goods, and the CVD paid was available as Cenvat Credit, resulting in a revenue-neutral situation. The Tribunal considered the arguments presented by both sides and concluded that there was no deliberate intention by the assessee to take undue advantage in the classification of goods.

Duty of Assessing Officer and Tribunal Decision:
The Tribunal highlighted the duty of the assessing officer to correctly classify the goods while assessing them. Referring to legal precedents, the Tribunal emphasized that the assessing officer should examine the goods and classify them accurately. After examining the description of the goods provided by the assessee, the Tribunal found no deliberate act to avoid payment of CVD. Consequently, the Tribunal set aside the penalty imposed on the assessee in one appeal and dismissed the Revenue's appeals while allowing the assessee's appeal to drop the penalty.

In conclusion, the Tribunal's judgment focused on the correct classification of imported goods, the imposition of penalties, the duty of the assessing officer, and the absence of deliberate misdeclaration by the assessee, leading to the decision to drop the penalty and dismiss the Revenue's appeals.