2015 (10) TMI 1776 - SC - Customs

Mis-declaration of goods Front End Engineering Package (FEEP) - Appellant classified under Chapter Heading 49.01 SCN issued claiming extended period of limitation and product to be covered under the head 4911.99 wherein full exemption is not available - Held That - when the declaration was filed by the respondent, in view of the position in law that was prevailing at that time, it was a bona fide declaration and cannot be treated as misdeclaration. - Extended period of limitation provided under Section 28 of the Customs Act, 1962, could not have been availed by the Department Declaration filed by the assessee is bonafide under the head 49.01 and cannot be said as mis-declaration of goods - Decision made in the case of Commissioner of Customs (General), New Delhi v. Gujarat Perstorp Electronics Ltd. 2005 (8) TMI 657 - Supreme Court of India followed - Appeal dismissed in favour of assessee.

Summary

Issues involved:
Classification of imported goods under specific tariff item, misdeclaration of goods, extended period of limitation for show cause notice, applicability of exemption from payment of import duty.

Classification of imported goods under specific tariff item:
The respondent imported Front End Engineering Package (FEEP) and declared its value at USD 3 million under Chapter Heading 49.01, claiming exemption from import duty as per Notification No. 38/94-CUS. The show cause notice alleged misdeclaration, stating the product was covered by Heading 4911.99, not eligible for full exemption. The Tribunal previously classified similar articles under tariff item 49.01 in two judgments, making the respondent's declaration bona fide. The Supreme Court upheld the Tribunal's decision, emphasizing the historical classification and the respondent's bona fide belief, citing relevant case laws. The issue of classification was deemed debatable, supporting the respondent's plea of a bona fide belief.

Misdeclaration of goods:
The show cause notice alleged misdeclaration regarding the imported goods, leading to a demand confirmed after a hearing. However, the Tribunal found no misdeclaration and held the show cause notice time-barred, as the extended period of limitation under Section 28 of the Customs Act, 1962, was not applicable in this case. The Supreme Court agreed with the Tribunal's decision, dismissing the appeal solely on the ground of limitation. The respondent was not held responsible for willfully misstating or suppressing facts, as their declaration was considered bona fide based on the prevailing classification at the time of import.

Extended period of limitation for show cause notice:
The show cause notice claimed an extended period of limitation due to alleged misdeclaration of goods. However, the Tribunal ruled in favor of the respondent, holding the notice time-barred as the extended period under Section 28 of the Customs Act, 1962, was not applicable. The Supreme Court concurred with the Tribunal's decision, emphasizing that the show cause notice was beyond the limitation period and, therefore, the appeal was dismissed solely on this ground.

Applicability of exemption from payment of import duty:
The respondent claimed exemption from payment of import duty for the imported goods under Notification No. 38/94-CUS. The issue of exemption was intertwined with the classification of goods under specific tariff items, which the Tribunal had previously decided in favor of the respondent. The Supreme Court upheld the Tribunal's decision, emphasizing the bona fide belief of the respondent and dismissing the appeal solely on the ground of limitation, without delving into the merits of the exemption claim.