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2014 (4) TMI 909 - HC - CustomsValidity of Tribunal Order Reduction in Pre-deposit for hearing appeal Improper Classification of goods - Whether the majority opinion of CESTAT requiring pre-deposit of 50% duty is justified Held That - There appears to be a conflict within the department itself as to the proper classification of goods i.e. whether they are to be cleared under tariff heading 8443 32 70 or 8443 32 60 - One Member of the CESTAT was of the opinion that the extended period of limitation was not properly invoked, is in the opinion of this Court sufficient for Tribunal to have made an order granting substantial relief - This Court is of the opinion that the impugned order to the extent it requires deposit of 50% of the amount should be modified - Instead assessee should be permitted to deposit 20% of the amount as a pre-condition subject to which its appeal may be heard Decided partly in favour of Asseessee.
Issues involved:
1. Classification of imported goods under different tariff headings. 2. Requirement of pre-deposit of duty for hearing the appeal before CESTAT. 3. Conflict within the department regarding proper classification of goods. 4. Invocation of extended period of limitation under the Customs Act. Analysis: 1. The primary issue in this case revolves around the classification of imported goods under different tariff headings. The appellant imported fax machines declared under CT 8443 31 00/8443 32 60 with a nil rate of duty. However, the department contended that the goods fell under heading 8843.3970 attracting a duty rate of 7.8%. This classification discrepancy led to a show cause notice being issued, invoking the extended period of limitation of 5 years under section 28 of the Customs Act. 2. Another crucial issue was the requirement of a pre-deposit of 50% of the tax demand amounting to Rs. 42 lakhs for hearing the appeal before CESTAT. The appellant sought a suspension of this pre-deposit during the appeal process. The majority opinion of CESTAT upheld the 50% pre-deposit condition, citing the need to balance the interests of the authorities. However, the appellant argued unfairness due to conflicting opinions within different Commissionerates regarding the proper classification of the goods. 3. The High Court analyzed the conflict within the department itself regarding the classification of goods under different tariff headings. It noted that one Member of CESTAT questioned the proper invocation of the extended period of limitation. Considering these discrepancies and conflicts, the Court found sufficient grounds to modify the pre-deposit requirement. The Court directed the appellant to deposit 20% of the amount as a pre-condition for hearing the appeal, granting a 4-week timeline for the deposit. 4. The invocation of the extended period of limitation under the Customs Act was a significant aspect of the case. The Court's decision to partially allow the appeal and modify the pre-deposit condition was influenced by the conflicting opinions within the department and the need for a balanced approach in addressing the classification and duty issues related to the imported goods. In conclusion, the judgment addressed the classification dispute, the pre-deposit requirement, internal conflicts within the department, and the proper invocation of the extended period of limitation under the Customs Act, providing a nuanced resolution to the complex legal issues involved in the case.
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